Today in Commodities: At Week's End

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Includes: CORN, COW, CUT, DBA, FXA, FXC, FXF, FXY, JJA, JO, MOO, NIB, TBT, UNG, WOOD
by: Matthew Bradbard

Oil as of this post is down nearly 2% making its way to the 61.8% Fibonacci retracement. On a close below $78.30 in November we would suggest leaving all your longs. We expect the 20-day MA in natural gas that had previously served as resistance to now serve as support; in November at $4.14. Continue to scale into November and next week start trading December futures. Likewise in the options we’re suggesting November and December call spreads.

Until the indices break above the August highs aggressive traders could fade rallies in the Dow and S&P. Our featured play remains the November 1:2 ES put spreads. We’re anticipating a 5% correction from here.

Clients were advised to book profits on their cocoa longs today and take the proceeds short coffee. Our target in the December contract is the 50-day MA at $1.76. Cattle could be the next “bull” market as long as the Cattle on feed report today does not surprise. Some clients are long expecting a $1.05 trade in the December contract.

Aggressive traders could sell lean hogs with stops below their recent highs. Gold and silver will end the week substantially higher than where they started the week with gold gaining $31 as of this post and silver higher by 90 cents. We think a correction is due and remain stubbornly on the sidelines with clients watching fresh record highs in gold. As for silver we left too early but still feel a nasty correction is coming…consider yourself warned.

Grains could be experiencing a blow off interim top…stay tuned. We remain bullish but would like to see a correction before getting clients long again. We’ve tried to probe short in soybeans and soy meal and have got bitten a few times and learned our lesson. The trend in agriculture clearly remains up.

Aggressive traders could short the Swiss franc, Loonie or buy the Yen…all with tight stops.

Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.