Today in Commodities: 11 Down, 1 to Go

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Includes: AGF, BALB, GLD, MOO, OIL, SLV, UDN, UUP
by: Matthew Bradbard

Inside day in Crude with prices down 1.90%. Back and fill action is tolerable with the recent run up as long as $82.50 holds in January we remain bullish. Clients have been advised to be cautious and scale back on longs but will re-establish longs if prices hold their ground. With prices back below key MA’s we expect additional downside and a trade below $4 in the coming sessions. This is not a sell recommendation but rather we’re looking to be a buyer for clients from lower levels.

Indices could go either way…my bias is getting more negative but we’ve yet to commit client capital. The dollar has made headway six out of the last seven sessions and clearly the trend is up but I do not trust it and therefore have no trade recommendations currently. We do feel the decline in the Swissie, Euro and Aussie may have been too dramatic so on signs of an interim bottom we will start scaling into longs…stay tuned.

Lean hogs are correcting as we expected, the next test will be the 20 day MA at 75.00 in the February contract. Live cattle however did not correct as forecasted printing a new high today. We’re bullish but will only buy a retracement for now…stay tuned.

Gold closed above the 20 day MA gaining 1.42% today. As long as $1374 supports February we may be headed for new record highs. Our favored precious metal is silver which traded 3.4% higher today. Aggressive traders can spread (3) longs in silver against (2) shorts in gold.

Corn was lower by 1.5-1.75%, the recent lows need to hold on a closing basis or we would suggest abandoning longs. We should know in the next few sessions. Some clients started working long cotton today after the 22% correction in recent weeks. Our suggestion was a bullish options play in March expecting as trade back near $1.30 in the coming weeks.

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