Even with one less trading day there will be plenty of trading opportunities if you can deal with the volatility. We’ve completed a 61.8% Fibonacci retracement almost to the penny on today’s lows as Crude looks to close $3 north of its intra-day lows. Buy the dip has been our advice and we continue to operate under that influence…see previous posts. The comeback in the distillates likely contributed to the action in Crude, helping lift prices into the green in late dealings. Natural gas advanced 1.5% but was unable overtake its short term MA. On a settlement back over $4.00 look to add to your longs. Stocks pared most of their losses closing well off their lows, down 0.50-1% as of this post. The immediate action will be determined by the rumblings from the Federal Reserve…at the moment we advise the sidelines.
Gold printed a new contract/record high overnight but was unable to hold onto its gains closing less than 0.3% higher. We are in favor of a correction before seeing much higher ground. We are willing to re-establish longs for clients on a trade closer to $1650/1700 ounce. Inside day in silver with prices down by just over 2%. As we’ve voiced in previous posts, meeting with plenty of skepticism a trade down to $37-38 /ounce is our expectation in the coming weeks for silver.
The dollar clearly broke out today, advancing to near a two month high. The major loser today was the Swiss franc, getting crushed shedding nearly 9% on intervention. We would buy this dip with options thinking we overshot the downside looking to capitalize on a bounce over the next few days. We priced out October outright calls and December ratio spreads for aggressive clients today. Do not overstay your welcome …on a trade to 1.2100 offset the trade. We called a cocoa correction and the market delivered, but unfortunately we were unable to act as we already have enough weighting in this sector in our eyes for clients. On a rally we may get short…stay tuned. Clients took profits on their sugar bearish trades today with prices down nearly 10% in the last two weeks. OJ advanced again today picking up 2.6% and trading higher now four out of the last five sessions. Some clients remain long looking for more…our target is $1.70/1.75 in November. Coffee has lost ground for two sessions now... bearish trades are on our radar but we’ve yet to act. On a flat or up day tomorrow we likely will establish trades for clients…stay tuned. Ag traded lower today with wheat getting hit the hardest, down 2%, soybeans 1.6% and corn 0.6%. Aggressive traders could be short soybeans and/or corn but understand this is a gamble being that weather has been a wildcard of late, we have a a USDA report next week and yields are yet to be determined. Buy dips in live cattle as we likely made an interim low last week. December is back above the 20 day MA for the first time in two weeks…a confirmation of our buy signals from last week.
Risk disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results