How “Healthy” is this Bill?

The Health care bill passed its first test. Give it a few days to digest but this bill will not just go away and could have some major implications. The bears (me included) got run over in Crude oil today. Around 9AM est. this morning it appeared oil was on the verge of breaking down but as of this post the futures are 70 cents higher and $2.80 off the lows. We are advising swing traders to sell near $83 and buy near $78 but we really thought this was the beginning of the break we’ve been looking for…back to the drawing board. Natural gas made news lows but paired losses as at least someone besides just my clients are willing buyers at these levels. We suggest scaling into May futures and June call spreads expecting a trade closer to $5 in the weeks to come.
Indices should finish higher on the day but the Russell, Dow and S&P failed to make new highs even with the strong reversal. Though we feel like a kid who is playing with fire we are advising clients to have a light short in the S&P with stops above the recent highs. While we feel there will be a time to buy sugar we have no interest establishing new positions with clients as 3-5% daily swings are becoming commonplace; it feels like Vegas and is not for me. Still looking for more upside to be a seller of Treasuries; closer to 120′00 in 30-yr bonds and above 118′00 in 10-yr notes.
Corn lost 1% today closing just below the 20 day MA; use a setback to establish long exposure if you have not already. Soybeans were higher by 0.70% today and could see higher ground in the immediate future but we would prefer to be long from lower levels with clients. To take it a step further on a trade over $10 we may look to get short…stay tuned. Outside of corn our only Ag play with clients is long soybean meal; expecting July to trade above $300 in the coming weeks. Based on the market reaction to the Cattle on Feed report today we think last Friday live cattle put in an interim top. Those eager to get short we are suggesting selling rallies in June and August thinking we could get a trade 3-4 cents lower on top of the penny today.
Gold and silver were losers today but we did close well of their intra-day lows. Gold probed below $1100 as expected but we think there should be more to come; target $1075 and then $1045 in April. Use $16.50 as immediate support in May silver though we expect a trade closer to $16 this week or next. When May copper breaks $3.30 look out below but until then expect a 10-15 cent trading range/3.30-3.45.The Loonie closed down for the third consecutive session but we will need to see more weakness in metals and energies to see continued selling as we’ve forecast. On our radar but no action taken yet…selling the Yen from higher levels. We should have some trading ideas in the coming days.
Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.

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