Commodity Futures Market News

With the Fed hinting at more quantitative easing do not expect commodities to get inexpensive any time soon. Crude oil has made a higher high now for the last three sessions and on a close back above $100 traders could start scaling back into longs. I see support at $99 followed by $97 in March contracts. Natural gas did trade lower today but if you notice the 9 day MA is holding as support. Traders can scale into longs with stops just below that level. It comes in at $2.56 in March. Stocks will close slightly lower today, only the second negative close in the last fourteen trading sessions. The low was the 9 day MA which continues to serve as the pivot point. On a breach offset all longs.

Gold is trading $25 above its 100 day MA and on its way to $1750 on the February contract in my opinion...trade accordingly. Silver closed above the 100 day MA for the second day in a row and though prices could get near $35 I think we are due for a $2.50-4.00 correction very soon...trade accordingly. The dollar lost ground today though it pared losses closing 35 point off its lows. My opinion is lower ground still which means higher trade in other crosses. Just keep stops tight as markets are starting to become overbought on daily and hourly charts.

Cocoa quietly advanced another 1% today making its way towards its 100 day MA. The highs are likely in on OJ so buying out of the money puts may be a good play thinking we get some retracement off the record highs seen earlier this week. Euro-dollars continue to stair step higher...hold off on short entries but I got to tell you 0.60% at the end of 2013 seems like a good play so we will be giving sell signals...stay tuned. Wheat picked up nearly 2% while corn remained flat. Continue to scale into longs trailing stops. Again I feel we could see March corn above $7 and wheat closer to $7.50 in coming weeks. Exit remaining live cattle longs I am betting an interim tops was made in recent sessions. Traders should have been stopped out of longs in lean hogs at a profit as prices broke the 20 day MA today.

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

Fed meeting this week as well as any new developments out of Europe. My suggestion is to always look one-two weeks in advance for upcoming economic events when initiating trades. Just when it appears Crude was destined to move lower prices reversed finishing 1.65% higher today. $1oo appears to be a magnet for pricing and until we get $3-4 north or south of that level expect sideways action to continue. I do not feel comfortable trading either side currently. A 9% appreciation in natural gas after posting a new low could be the capitulation low. Stay tuned but if prices can overtake $2.75 this week and hold onto gains we may have a low. As I hinted at last week prices generally make tops and bottoms at extreme sentiment levels and everyone has been bearish natural gas of late.

Equities crept higher today as the appreciation ytd is now over 3%. As long as the 9 day MA holds I remain friendly. Gold traded above the 50 day MA for the first time since mid-December when prices were above $1700/ounce. As long as $1650 supports we should see further upside. The 100 day MA at $1700 should be obtained in this leg in my opinion. Silver picked up 2% lifting prices to six week highs as prices are approaching the 100 day MA. Bulls remain in the driver's seat and I cannot rule out a further $2 appreciation in the weeks to come. Continue to trail stops though as prices are nearly 25% off levels seen just three weeks ago. The dollar has lost ground five out of the last six days closing below 80.00 for only the second time in 2012. I see further downside to come. All crosses with the exception of the Yen can be bought on dips. The Euro and Swissie will likely provide the best opportunities as they got hit the hardest in recent weeks and months.

OJ continues its climb to fresh record highs putting on almost 4.5% today. I do not see upside resistance being we're in uncharted waters. If coffee breaks the lows that held the last two months expect a test of $2/lb...trade accordingly. The momentum is shifting to the bears in Treasuries as 10-yr notes and 30-yr bond have lost ground the last four sessions. Weighing the risk soybeans have advanced too far but aggressive Ag traders could lightly step into corn and wheat with stops below the recent lows. I would be building a position assuming the market proves you right. Remain in your lean hogs and live cattle longs with stops just below the 20 day MA's. Forced to pick one livestock trade I prefer bullish exposure in April lean hogs.

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

It is still very early in the year but let me point out a few standouts ytd. Natural gas is lower by 22%, silver is higher by 15%, cotton higher by 7%, OJ is at record high up 24%, wheat is lower by 8.5% just to name a few. Crude is trading just below $98.50 in March near the weekly lows. See previous posts a close below this level would turn me bearish...trade accordingly. The next significant support comes in below that level at $94/barrel. It is too early to say for sure but it looks like the distillates reached an interim top this week as well. Both heating oil and RBOB could back off 10-15 cents/gallon very easily in my opinion. The sentiment clearly remains bearish but as more investors continue to bash natural gas that is when it will likely bottom. Just like any market when the boat leans one way too much it generally tips. That being said we've refrained from buying but when natural gas bottoms expect some serious short covering...stay tuned.

Stocks have only closed lower two days so far in 2012 so yes I remain bullish but the pace of buying is starting to fade. I remain bullish as long as the 9 day MA supports. That level is 1295 in the S&P and 12460 in the Dow. Gold nearly picked up 1% closing above the 40 day MA for the third session in a row. The 50 day MA needs to be overtaken next week or we would move to the sidelines, that level is $1674. Silver was the standout today gaining over 5% lifting prices to five week highs. Cutting through the 50 day MA like a hot knife through butter. Next I see the March contract eying the 100 day MA at $33.15.

The dollar has finished lower only four of the last twelve weeks but this week was the biggest losing week since mid-October. It appears at least in the short run prices should head further south. The standout today befitting from dollar weakness was the Pound and in my opinion there should be more upside to follow. The commodity currencies reversed and made new highs so back off being a seller...further commodity appreciation could mean a higher Loonie, Kiwi and Aussie. Fresh entries long the cocoa should have been stopped at a loss as prices are back under the 50 day MA.

Add to longs in sugar on a close above the 100 day MA, that level is 25.15 in March. 30-yr bonds and 10-yr notes will close out the week at the bottom of the recent trading range. As previously stated forced into the market I am a seller but do not wish to be in the trade with clients as a trade lower in equities which should be soon will likely get Treasuries appreciating again. Still on the sidelines in grains thinking we can get clients positioned long on a test of the December lows. As long as the 20 day MA supports April lean hogs and live cattle remain in bullish trades. On a breach move to the sidelines.

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

Nothing included markets move in a straight line...stocks will not move higher in a straight line nor will natural gas move lower...all things must come to an end. I am still in a holding pattern waiting for direction in Crude oil. We're still experiencing a tug of war in the distillates as RBOB was lower today and heating oil was higher...the reverse of previous sessions. Natural gas was lower by 7% today making it 21% already in 2012..a rocky start! The reality is I still do not see signs of a bottom. Equities continued their climb with the S&P exceeding our target of 1300 and the Dow within 100 points of our target...see previous posts. The 9 day MA should continue to support and as long as prices hold above that level I remain friendly.

Gold is having trouble getting above the 38.2% Fibonacci retracement level at $1663 in February. I still see $1676; the 50 day MA but much more than that is not likely in my opinion on this leg...trade accordingly. Silver bulls are running on fumes as well...I am not advocating a bearish trade yet but start looking for an exit door on longs. The dollar index broke the 31 day EMA, a level that has supported since mid-November...could the tides be shifting? The Euro and Swiss franc are above the 20 day MA and the Pound is on the verge of penetrating that level...all starting to look more friendly. From where I stand the commodity currencies look the weakest along with the Yen and European currencies appear to be a buy. Trade small as the forex market has been manic of late.

Cocoa is back above the 50 day MA...aggressive traders can work back into longs with stops below the recent lows. Sugar #11 could be bought with stops below the 50 day MA as well. Treasuries appear to be rolling over but my clients have been fooled too many times so we will remain on the sidelines...forced into the market I would be a seller. Grains were higher by 1-2.25% today though I remain on the sidelines still to see if we get a test of the December lows. Next week if we have not I may be a buyer of wheat and or corn for clients...stay tuned. Live cattle and lean hogs remain a long proposition until prices breach the 20 day MA on the downside.

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

Every investor has a different strategy but slow and steady sometime wins the race. The idea is to be consistent and take small losses and let profits run...easier said than done. For three weeks now Crude has been stuck in a $5 trading range and this looks to continue. Today prices reversed mid-day to close slightly higher back above the 9 day MA above $101/ barrel in March. The sidelines is my suggestion until we get a clearer picture. A close below $98.50 or above $102.50 would likely set the tone in that direction but until then sit on your hands. We're getting mixed signals from the distillates which is supporting sideways action in Crude with RBOB inching higher gaining over 2% today while heating oil closed lower for the fifth straight session. No new lows today but still waiting for a bottom in natural gas and believe it or not I am hearing whispers of $1.00 handle...stay tuned.

Equities bounced off the 9 day MA today and closed higher by approximately 1% depending on the exchange. Ytd stocks are off to a healthy start appreciating just over 2%. Expect the grind higher to continue, using the 9 day MA as your pivot point on a closing basis. Gold and silver closed above their respective 40 day MA's. My next target remains the 50 day MA which in February gold comes in at $1678 and in March silver at $31.16. On the daily chart prices are overbought so if we start to turn south have an exit strategy to book profits on longs because as we all know metals can change course quickly. Copper is nearing a three month high and if prices surge above $3.80 the next stop would likely be $4/lb., a level not seen in nearly five months...stay tuned.

Day three of a dollar setback and the first settlement below the 20 day MA in two weeks. An interim top may be in so stay tuned ... a close below 80.45 in March I would turn bearish. The standouts today were the European currencies...expect that to continue on further dollar weakness. The Euro, Pound and Swissie can be bought with tight stops. Cocoa needs to re-take the 50 day MA in the next few sessions or I would take remaining longs off. That level is 2295 in the March contract. Treasuries were lower today but until we see consecutive closes under the 20 day MA in both 30-yr bonds and 10-yr notes considering it just a trading range and I have no long or short interest. Those levels are 143'22 in 30-yr bonds and 130'25 in 10-yr notes.

Fresh lows in corn and wheat as we may make an attempt at the December lows while soybeans were able to tread water today. On a lower trade that holds the December support I will look to be a buyer of Ag for clients...stay tuned. Not my favorite trade but if long live cattle place stop just below the 20 day MA and let the market guide you. Lena hogs have picked up ground the last four sessions. As I've voiced I think this is the beginning of the next leg higher. Lean hogs are not making headlines but we could see a nice appreciation in the weeks to come...this fits the bill for a good swing trade.

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

After a long weekend the markets are back to normal trading hours. Crude will finish just shy of 2% higher but will not retake the 9 day MA; in March at $101.25. I have advised the sidelines thinking we remain in the $10 range and do no wish to establish a position being we started the day near the middle of the range. Multi-year lows in natural gas with prices down near 7% today. This makes it five losing sessions in a row with no bottom in site.

Equities inch higher as the 9 day MA continues to support. Use that level as your pivot point; in the March Dow at 12370 and the S&P at 1282. Gold traded above the 40 day MA again today closing just under that mark. I'm expecting a further leg higher and this would be accelerated if the dollar was to back off. I see support at $1635 in February as our upside target remains $1680...trade accordingly.

Support is seen in silver just above $29 in March with an upside target of $32. The big mover today was copper breaking resistance and advancing to four month highs. This was likely from the continued growth out of China. Q4 GDP coming in just under 9% is certainly nothing to sneeze at.

The dollar is exhibiting signs of fatigue but I would like to see a settlement below the 20 day MA before getting too committed . That level is 80.90 in the March contract...trade accordingly.

Aggressive traders could buy the Euro or short the Yen with tight stops. Both trades are a slight forces so I would hold off for confirmation. Cotton closed above the 100 day MA for the first time in seven months...take off all bearish trades at a loss.

For nine sessions Euro-dollars have picked up steam. There will be a time to get short but until we see signs of an interim top let the market work higher. I am still looking for signs of a bottom before reestablishing longs for clients in any of the Ag markets. I believe we have a shot of seeing the December lows challenged so be patient.

Livestock traders could be back long April live cattle and lean hogs with stops just under the 20 day MA. I like the prospect of higher hog prices and the technicals appear a little less risky in my opinion.

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

The day is not over but I have not had any strange things happen to me that are typical of this date. I'll let you know next week if I made it the whole day. Crude failed to make a new high this week closing roughly $5 from its highs. Prices failed at the same level they did in mid-November which was followed by a choppy $10 trading range since ..will this continue? My stance is that short term we drift lower as long as $100 contains any upside. An additional influence will be if the US dollars strengths continues expect Crude to trade lower. Exit all natural gas longs and wait for a bottom. I've seen enough damage and there are markets that can make you money until we see evidence of a bottom. I likely stayed too long as is with clients and with more warm weather coming I do not see any immediate catalyst for a turn.

Equities probed the 9 day MA in early dealings but with a close back above that pivot point I remain friendly. Gold is meeting resistance at the 40 day MA but with prices only down 0.50% and based on the greenbacks appreciation I would say this is a small victory for bulls. I am thinking we still have more upside with $1680 as a target. Silver ran out of gas at the 40 day MA as well. My interpretation is the market is taking a breath before a higher leg. The dollar traded to the highest level since September 2010. I see significant resistance about 1% higher so I do not expect there to be much left in the tank. Commodity currencies look to be the best sale as prices have just started to roll over. Though the European currencies have gotten hit the hardest I view those crosses as the largest risk as big moves could happen in either direction in my opinion.

Cocoa could not maintain the 50 day MA and will give back gains until the dollar stops appreciating. Move to the sidelines on longs. 10% daily ranges in OJ would have me looking elsewhere as I do not have the stomach as the moves are in both directions. Coffee gave up nearly 4% today as prices may not reach the 100 day MA before they head south. Stay tuned as we may have some bearish trade recommendations next week. Continue to hold for a high entry on bearish Euro-dollar trades. Agriculture resumed their downward move as forecast with corn and soybeans down roughly 2% and wheat suffering only 0.50%. As prices approach last month's lows I want to see the price action and if support holds I may re-establish longs for clients...stay tuned. Buy signals in lean hogs and live cattle with confirmation with both meats closing back above their respective 20 day MA's. I like the chart formation in hogs better and suggest scaling into longs in April thinking in the next 90 days we see prices back near their highs...stay tuned.

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

There was little to no big moves just the status qou. Crude turned down today trading down over 2% as of this post. If we see a settlement below $100 I will turn bearish. Next support is seen at $98 followed by $93 on the February contract. Natural gas gave up another 2% today taking prices below $2.70. I never thought we would see this much downside but most of my clients are ready to leave the trade so my gut tells me we're close to a turning point. The lows from 2 1/1 years ago are still 30 cents lower and at this juncture I cannot rule out a test. After testing the 9 day MA equities crept higher. Look for the grind higher to continue...1300 in the S&P and 12700 in the Dow look like likely targets.

Gold hit the 40 day MA but backed off by the close. I am targeting the 50 day MA which in the February contract is $1684. Silver also hit the 40 day MA closing higher by 0.90%. On this leg I anticipate another 3-4% appreciation. The US dollar is manic erasing previous day's gains closing back in on the 20 day MA. Use that level as your pivot point, in March at 80.80. On continued green back weakness expect the Swissie and Euro to outperform. Aggressive traders can sell cotton with stops above the 100 day AM. A level that has rejected further upside several times in recent months. In fact March has not settled above that level since mid-June of 2011.

Day two of the OJ correction with prices down limit today . The bubble has burst and more downside is expected...trade accordingly. Treasuries could go either way..walk away for now. Let the Euro-dollar work higher and then establish bearish trades from higher levels in 2013 contracts. A bearish USDA report and markets reacted with the front month of corn down 6%, soybeans lose near 2% and wheat 6%. Further downside is expected in this complex and if prices approach the November/December lows and hold I will be looking for a buying opportunity...stay tuned. Lean hogs tested and held support so on further base building I may re-explore longs for clients.

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

Over the years I've tried to stay informed on 50-60 different commodities and paying attention to commodities off the beaten path has provided my clients opportunities when the majors did not provide trading opportunities. For example following markets like lean hogs, cocoa or soybean meal when gold or oil are not giving clear signals. Crude oil closed under the 9 day MA for the first time in three weeks...a preliminary sign that prices may back off...stay tuned for confirmation. On a settlement below $100 I would re-visit the idea of bearish exposure. Natural gas lost 6% today with serious chart damage. My suggestion is refrain from picking a bottom as we thought $3.20 was the low and we are carrying a healthy loss for clients...thankfully it is a small position. If we do not see signs of a bottom we will be cutting losses very soon...stay tuned.

Same tune in stocks as recent posts we expect equity prices to creep higher and see the 9 day MA as the pivot point. As long as that level supports I remain friendly. Gold has gained 7 out of the last 8 sessions and should continue higher in the days and weeks to come. I expect a trade up to near the 50 day MA in February at $1685. $28.50-28.75 should support pullbacks in silver and the 50 day MA is my target here as well coming in at $31.45. The dollar reverse course again as it appears now new highs will be seen before the weekend. On a new high expect more weakness in other crosses. We have seen too much whippy action for me to have any interest in this sector currently.

OJ lost nearly 10% today as the news of a fungus out of Brazil, the second largest producer may have caused an overreaction yesterday. Expect a further failure but with this Wild west action I would run away from any exposure. Coffee gained 4% trading above its 50 day MA in 5 weeks and prices should continue higher. I see resistance above $2.50 in March...trade accordingly. Both 10-yr notes and 30-yr bonds are back above their 20 day MA' as the momentum has shifted back to the bulls. I have no client exposure. Soybeans, soy meal and soybean oil were the big losers ahead of tomorrow's USDA. I like the idea of buying grains at lower levels but have suggested no exposure into the report. I prefer to react as opposed to outsmart the USDA. Look for potential trade ideas in corn, wheat and soybeans later this week. If lean hogs break their mid-December lows except momentum to drag prices 2-3% lower...trade accordingly.

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

It will not likely make headlines because it is not energy or metal but look at the last few days in some of the soft commodities. OJ and cocoa higher by 17%. This is what commodities is all about...timing. by The 9 day MA has supported Crude the last three days but unless we make a new high this week I would expect that level to give way. I have advised the sidelines and have told clients to buy the breakout or sell a a settlement below $100 in February...trade accordingly. New contract low in natural gas...where is the bottom? I do not see much more downside but I may be talking my clients position as they are long from 25 cents above current levels. With prices nearing 27 month lows how low do we go to entice buying is the question?

Five month highs in securities as we approach the Summer 2011 highs the grind higher should continue. As long as the 9 day MA acts as support expect higher ground. Gold picked up $25/ounce today making the appreciation in the last two week s over $100 with the highest closing price since mid-December. Another $35-45 I feel is in the cards. Silver gained nearly 4% today on the verge of a breakout advancing $3/ounce in the last two weeks. Further upside should be around the bend as I expect $2-3 additional upside...trade accordingly. Day two of a dollar decline but it will take a settlement back under the 20 day MA for a true correction to be underway. It could go either way but to play a correction my best idea is buying the Euro with stops below the recent lows. The best performers today were the commodity currencies so follow the action in commodities and then play the Aussie, Kiwi and Loonie accordingly. I have no currency exposure with clients that I direct.

Cocoa jumped 7.5% today to trade up to the 50 day MA for the first time in two months. See previous posts for buy recommendation and target at the 50 day MA. From here we could see more in my opinion, use today's low as stop on new entries. Back to back limit moves in OJ with prices higher by 17% in two days. This could get ugly with prices above $2 for the first time since 2007. Thank goodness for stops as I advised shorts to take losses on yesterday's breakout...further evidence that the market is always right. Grains should meander sideways until Thursday's USDA. I expect fireworks but will likely be on the sidelines and react as opposed to outguess the USDA. The livestock sector found support today with feeder cattle, live cattle and lean hogs all higher on today's session. Take remaining shorts off in live cattle on a trade above 122.00 in February.

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