With two months gone in 2011 how is your portfolio doing? Based on the fact that Crude prices cannot maintain $100 unless the plot thickens in the Middle East we would expect a good portion of the $10 fear premium to be stripped out of oil in the coming weeks. We're not suggesting shorts but our bias has shifted in the short run. Those looking for a play are suggested to buy out of the money calls and puts to capitalize on a $10 move in one direction. On a trade back near $93 we would likely explore bullish plays for clients again...stay tuned. Natural gas traded to the 20 day MA for the first time in three weeks; expect that to serve as a pivot point. Our target for longs in May is $4.30. The 20 day MA is acting as a pivot point in the indices as well... we would stand aside for new entries until the picture is clearer.

A new 2011 low was established in the dollar...the next test will be support from early November about 1% lower than today's close...stay alert. Live cattle were lower by 1% today but support held at the 20 day MA. Those not already long could use a break this week to scale into longs in June. We suspect lean hogs have 1.5-2.5% more downside before shorts should reverse and we will be looking to get long with clients. Gold was virtually unchanged in today's session but silver was higher by just over 2.5%. At these levels we do not want to be long futures with clients but we entered some bullish option plays for a select number of aggressive clients in May silver with a target of $35/ounce.

It looks like sugar is on the verge of breaking above the 50 day MA...clients were advised to get long May today as we think a trade back near 31 cents/lb. is coming. Clients were advised to lighten up on their bullish corn positions booking a profit after the latest two day surge in prices. We will be buying back in on the next set back.

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

As mentioned in a previous newsletter stocks and bonds can travel higher together as asset prices of all types are being inflated by the Treasuries cash injections. In today's session, that was exactly what occurred...although the buying in each market is being attributed to different factors and were at differing paces.

The buying pressure across bonds and notes was moderate at best, but in the face of a sharp equity rally it suggests the bias in the near-term will be higher regardless of action in other markets and maybe even the technical resistance overhead.

In today's news, the government's second estimate of fourth quarter growth was reported to be 2.8%. Most were expecting a figure closer to the previous reading of 3.2%. Not a bombshell, but a reason to keep fixed-income products in a portfolio. On the other hand, the final reading of the Michigan Sentiment consumer confidence index landed at a better than expected 77.5.

Seasonal tendencies in Treasuries suggest there could be a temporary rally, but the month of March tends to be a weak one. Therefore, we are looking for a place to be a bearish but feel like there will be better opportunities...especially on the short end of the curve.

First notice day is Monday, so you should be out of all of the March futures by now and into June. We see resistance in the June 30-year bond futures from 120 to 120'15ish but it "feels" like stops could be run. If so, we can't rule out a quick run to the mid to high 123's. In the 10-year note, we see resistance near 120 but we think closer to 121 is probable.

* Due to time constraints and our fiduciary duty to put clients first, the charts provided in this newsletter may not reflect the current session data. However, market analysis and commentary does. Charts provided by Track 'n Trade, Gecko software.

**Seasonality is already factored into current prices, any references to such does not indicate future market action.

Treasury Bond and Note Option and Futures Trading Recommendations

**There is unlimited risk in naked option selling.

Flat

Carley Garner

Senior Analyst / Commodity Broker

DeCarley Trading

cgarner@DeCarleyTrading.com

1-866-790-TRADE

Local : 702-947-0701

http://twitter.com/carleygarner

http://www.linkedin.com/in/carleygarner

http://www.DeCarleyTrading.com

http://www.ATradersFirstBookonCommodities.com

*Due to the volatile nature of the futures markets some information and charts in this report may not be timely.

There is substantial risk of loss in trading futures and options.

Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.

Related articles

• Delay on debt ceiling comes at a cost (money.cnn.com)
• Should You Be Freaked Out That The Dollar Hasn't Rallied During The Flight To Safety? (businessinsider.com)

I'm not sure it is lifestyle choices or the wild swings in the market but I chose to lighten up on numerous positions today because I have not been sleeping well the last few night. The sentiment is clearly bullish but fasten your seat belts and be prepared for volatility if trading in the Oil arena. Clients remain in their bullish positions but on another 3% plus appreciation as we've seen in recent sessions we will be taking partial profits for clients. Strong support appears to be forming in natural gas...we suggest working into longs and adding to a winner if and when prices begin to appreciate. Our suggestion remains scaling into May futures and/or May bull call spreads.

I expect to see more downside follow through in the indices so aggressive traders can fade rallies. We've lost 3% and could see an additional 2-4% in my opinion. If the dollar breaks below the recent lows look to buy the Swissie or Yen. We advised clients cover their live cattle shorts at cost. Why because a seasoned cattle trader called me and said he was buying. We've yet to get clients long but expect that to be the trade in coming sessions. Gold and silver were higher...what's new...I don't trust these prices and think a correction is coming. Cotton came off limit but still finished down 2% on the day. We feel there is more downside to come...trade accordingly. Coffee also gave up nearly 2% today; we suggest bearish exposure here as well.

We suggested Ag traders to buy May soybean oil and December corn futures and options today. The 100 day MA held in soybeans and soybean oil and the recent 10% correction may be all we get before higher ground. We anticipate a new contract high in new crop corn so scale into longs.

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

May corn futures at the Chicago Board of Trade in overnight trading hours Tuesday scored a fresh contract and 2.5-year high of $7.44 1/4 a bushel. Prices then abruptly reversed course and in midday trading were locked down the 30-cent daily permissible trading limit. Tuesday's price action has produced a big and technically bearish "key reversal" down on the daily bar chart. A key reversal down occurs when a futures market scores a fresh contract high and then on the same day reverses course to close lower, nearer the session low and has a trading range that has a higher high and lower low than the previous session's trading range. A key reversal down on the daily chart is an early technical clue that a market top is in place.

Good follow-through selling pressure in May corn futures on Wednesday would produce more near-term technical damage and would likely at least temporarily negate an eight-month-old uptrend in place on the daily bar chart. The corn market bears have quickly gained fresh downside near-term technical momentum. Their next downside price objective is to produce a close in May futures prices below strong chart support at $6.50 a bushel. For the corn market bulls to regain some fresh upside near-term technical momentum they would have to produce a close in May futures prices back above solid chart resistance at last week's high of $7.25 1/2. Stay tuned!--Jim Wyckoff

IPCA-15: Brazil's IPCA-15 Consumer Price Index of February will be released on the 22nd. We expect consumer inflation to rise 0.95% (MoM), compared to 0.76% in the previous month. Though we expect Food inflation to continue to decelerate in February, Education prices are expected to jump reflecting seasonality as school tuitions usually suffer adjustments at this time of the year. Yet, adjustments in urban bus tariffs in January are expected to still have residual impact on the Transport group of the IPCA-15 index of February.

Unemployment rate: January's rate will be released on the 24th. We expect Brazil's unemployment rate to increase from 5.3% to 5.9% last month. Adjusting for seasonal effects unemployment is also expected to increase, though only moderately (from 6.0% to 6.1%). After a strong year in which the average unemployment rate was driven down from 8.1% in 2009 to 6.7% in 2010, the job market in Brazil is expected to loose momentum this year reflecting tighter fiscal and monetary policies.

IGP-M: Brazil's IGP-M inflation index of February will be released on the 25th. We expect the IGP-M index to rise 0.96%, above its last reading (0.79%). The reason for the index to accelerate is wholesale agricultural inflation which is expected to maintain its upward trend started in January. Wholesale industrial prices are also expected to have accelerated though with less intensity. If our MoM forecast proves to be correct, the IGP-M will show its first YoY drop since January/10, from 11.50% to 11.26%, suggesting a possible peak in last January.

Related articles

• PREVIEW-Brazil inflation seen at 0.79 pct in January (reuters.com)
• Brazil Inflation Challenges Central Bank (online.wsj.com)

Depending on your positioning traders experienced gains and pains this week with wild swings in both directions. The 100 day MA held on the week in Crude oil and if we can overcome the 50 day next week we should see fresh contract highs. Our favored trades are scaling into futures a few months out or purchasing July $5 bull call spreads. Natural gas was down marginally on the week but as long as the lows from the Fall hold we suggest lightly scaling into longs. Clients were buyers of May 50 cent bull call spreads this week. The indices continue to climb the wall of worry making fresh 2 1/2 year highs. Bulls remain in control...I remain perplexed but have given up fighting this trend.

The US dollar should continue lower so aggressive traders can probe the long side of all crosses with the exception of the Loonie as we could see a retracement after the 1.4% appreciation in recent weeks. Clients remain on the sidelines in livestock looking to buy a break in lean hogs and live cattle. Gold is overbought and the move in silver has become parabolic. Both metals in the medium term should see higher ground but we're sticking to our guns a correction first. Some clients established bearish option plays in April gold this week anticipating a trade back near $1335/1345. When I checked last evening cotton was up limit and by the day's end today prices had reversed to be down limit...a key reversal...stay tuned.

For several weeks now we've been advising bearish option plays in cotton and coffee, could we finally be getting a break? Agriculture should trade lower across the board; corn, soybeans and wheat. We continue to think buying new crop corn on this break is the best strategy. Chart damage was done in soybeans and wheat so we expect more downside in those two crops than corn...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

Gold Finishes the week at $1388.60 and Silver makes new 30 Year High's of $32.87

Another volatile week in the precious metals as the middle-east crisis expands and China raises rates again. This week's economic and geo-political news has certainly sent both traders and investors toward the precious metals as a 'safer haven" investment.The Chinese rate hike has sent a signal to investors that the historically high inflation in China has not been curbed and continues to accelerate, during inflationary times traditionally the precious metals do better than most other commodities.

The current situation in the middle-east is expanding to other countries Bahrain in particular as the success of the Egyptian protestors has given others hope in improving their lives. The Question in Egypt is who will replace Hosni Mubarak? As of this writing the Egyptian military has control of Egypt and the demonstrators in Tahrir square in protest the military dragging Its feet on reform.

Some new wrinkles: Today Yusuf al-Qaradawi, a leading Egyptian theologian delivered a political speech stating "Don't let anyone steal this revolution from you -those hypocrites who will put on a new face that suits them". "This revolution isn't over. It has just started to build Egypt. Guard your revolution".

Also it has been reported that Iran has requested through the Egyptian Defense Ministry permission to send two of naval vessels through the Suez Canal for the first time in six years in order to train with Syria's military.....it is reported that Egypt is considering Iran's request.

WEEKLY NEWS:

The military has promised to hold free and open elections within six months. However, the demonstrators are maintaining a prescience fearing that if they leave the revolution may be over...many demonstrators thought there would be a swift election process and believe the six month waiting process may be excessive.... There are still many unanswered questions in that region. And as a gold bug it certainly will have my attention. The SuMed pipeline is vital to the region and the flow of Crude oil.... ANY disruption in the flow will send oil prices soaring.....Higher Oil prices will send Gold and Silver prices higher as well......

It has been reported that Egypt's military has appointed former Egyptian judge Tareq el-Bishri to lead an eight-member panel including sitting judges, a legal team, and Sobhi Saleh a former lawmaker and member of the banned Islamic group...the Muslim brotherhood. The panels has been selected to amend the constitution and enable more candidates to run for the countries Presidency ....This will hopefully end the work strikes that threaten Egypt's economy. Demonstrators are seeking a swift resolution here. The uncertainty in the region has caused the price of the precious metals higher this week.....it may be far from over....

MY SWING MUMBERS FOR Monday (GLOBEX) APRIL GOLD

Resistance # 2...................$1398.00

Resistance # 1...................$1394.00

Pivot ...................................$1388.00

Support # 1........................$1384.00

Support # 2........................$1378.00

MARCH SILVER (GLOBEX)

Resistance # 2...................$$33.52

Resistance # 1...................$32.91

Pivot ..................................$32.26

Support # 1.......................$31.65

Support # 2.......................$31.00

There is a substantial risk of loss in trading futures and options. Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. PFGBEST, its officers and directors may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.

Related articles

• Gold futures gain as much as $7; silver's up 3.6% (marketwatch.com)
• Silver hits 31-year high as gold continues upward trek (theglobeandmail.com)

Taking profits too early and trying to pick tops sometimes makes me feel like egg is on my face. We would not suggest piling into longs but today's action in Crude is why we've been recommending scaling into longs on the way down. We think there could be more downside but the charts are starting to look friendlier and the situation in the Middle East is not going away. Natural gas gave up 1.5% today but the lows are still intact so we suggest buying at these levels. On a new low we will likely cut losses for clients...stay tuned.

The US dollar is back below the 20 day MA so we should see upside in the other crosses...trade accordingly. Fresh contract and record highs in live cattle...so much for the pullback! The adage is you cannot go broke by taking a profit but clients certainly left some money on the table leaving cattle longs too early. We still are searching for bullish exposure but only on a break. Gold was higher by 0.60% today while silver was higher by 3.60%. Our ratio spread would've worked out perfectly but we left it in recent sessions. Metals need to set back especially silver before we will re-establish longs for clients. Our only exposure is an April bearish options strategy in gold established yesterday.

Cotton was higher by limit again today, all I have to say is suspend your disbelief and get ready to pay more at Brooks Brothers, Armani and the like. Coffee was higher by 2.7-3.5% today depending on the contract month. Not a good day for our bearish options plays. Corn was higher by just over 3% today... my advice is buy dips in new crop. As for our clients soybean spreads they got hit for 6 cents ($300) today. We still like the trade...see previous posts.

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

March soybean futures at the Chicago Board of Trade on Tuesday hit a fresh three-week low of $13.77 1/4 a bushel. Market action the past four trading sessions has seen prices drop by around 70 cents from the Feb. 9 high of $14.55 3/4. The soybean market bulls have been weakened technically just recently, but no serious chart damage has occurred. Prices are still in a 7.5-month-old uptrend on the daily bar chart. However, a drop below the last "reaction low" of $13.64 1/4, scored in late January, would at least temporarily negate the price uptrend on the daily chart.

Veteran grain market traders are now thinking present downside price action in the grain futures markets is the "February Break" seasonal price weakness phenomenon setting in. This is likely the case and the question now is how deep will be this present price correction. There is solid technical support for March soybean futures at the last reaction low on the daily chart, at $13.64 1/4. Just below that lies more strong chart support at the January low of $13.55 1/4. A drop below the January low would produce more significant near-term technical damage and then open the door to a challenge of major psychological support at $13.00 a bushel. The soybean market bulls would gain some fresh upside near-term technical momentum by pushing and closing March futures prices back above major psychological resistance at $14.00 a bushel. Stay tuned!--Jim Wyckoff

An early rally failed in Crude today taking prices lower. We advised clients to roll out of May and go out until July. We recommended liquidating bullish positions in options and futures and give yourself two more months of time. Our recommended play is purchasing July $5 bull call spreads. Aggressive clients started to buy May natural gas today; they bought 50 cent call spreads but once an interim bottom is in they will start scaling long into futures...stay tuned.

A fresh new high in indices?? A correction is long overdue but all my bearish plays for clients have gotten hammered...thank g-d they're small allocations and only in options. The green back should see a little more upside but the easy money has been made on longs and likewise shorts in other crosses. We advised clients to take off their bearish plays in the Euro today. We advised clients to lock in profits on their longs in live cattle at the advice of a seasoned cattle trader. We will be eager to buy back June contracts on any set back as we feel new contract highs are likely...stay tuned.

We took the remaining profits on silver longs today with clients thinking we could see a 3-5% break in the coming sessions. We will re-establish longs ideally from lower levels but on a trade above $31 we would be willing to get long from higher levels than our exit...as is trading. This would likely signify a leg higher so we would be OK buying high and likely selling higher. As for gold the 100 day MA continues to cap rallies...trade accordingly; that level is $1366 in April. Cotton appears to be rolling over...it has been our recommendation for several weeks to fade rallies here...continue to do so. Coffee was higher by 2.5% today...this is against our clients as we've been establishing bearish positions in July options. For now stay the course.

In agriculture today we advised clients to exit their longs in corn and to get short May soybean oil. We did so with futures and options and are targeting a break back near 55.50/56.00. We hinted at getting long Treasuries last week and today we started initiating NOB spreads; buying 30-yr bonds against a sale in 10-yr notes. We're anticipating a 2.5-3.5% appreciation in the price of 30-yr bonds in the coming weeks...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.

The world is at peace once again, well for the next few minutes it is, so how has this impacted our markets? Both gold and crude oil have retreated and the US markets inched forward a little bit. Now what?

While the world was focused on the news from Egypt last week, the Danish bank Amagerbanken, collapsed. Amagerbanken, considered to be a "small Danish Bank," is notable because it is the first Danish bank to fail since the Danish government bank guarantees expired. Although this collapse seems far away from our shores, we will watch and wonder how the ramifications of this failure will be seen by other banks and insurance companies. The good news is that the investors who had $135,000 or €100,000 or less in the bank will have insurance to rely on; the rest, well when the dust finally settles will likely find that their investment has suffered, at the very least, a 50% haircut.

With commodity inflation alive and well, thank you very much, we need to wonder when true cost inflation will become more aggressive. Yes, we understand that the major factor to inflation is the cost of labor, which continues to be under control, unless you live in China. There are shortages in foods and materials throughout the globe and these shortages are not getting any better. It seems that "Mother Nature" is on the commodity bull's side of the price wars and she is winning all around. With floods in India, wheat shortages in Russia, wheat demand from Brazil etc. there seems to be no reason for the food stuff prices to fall. As a shopper, yes, we noticed the reduced size of products found in the large boxes on the shelves. Our boxes are air puffed containers for reduced sized products.

• Monday: New York Fed President Dudley speaks.


• Tuesday: January import prices and January retail sales are released at 8:30 December business inventories.


• Wednesday: January housing starts and January producer price index (PPI) both are to be released at 8:30, January capacity utilization/utilization and the Fed issues minutes from its late January meeting.


• Thursday: January consumer price (CPI) index is released at 8:30, January leading indicators are released at 10:00, February Philadelphia Fed Survey of business conditions is released at 10:00 and Fed Chairman Bernanke testifies before the Senate Banking committee.


• Friday: Fed Chairman Bernanke speaks.

The US Dollar Index rose in the Friday session. The chart looks as though there is an upside-down flag on the chart. On the positive side, the US Dollar index closed above the downtrend line for two days. All the indicators that we follow herein are pointing to higher levels although they all appear to be overbought. The 5-day moving average is at 78.165 and the 20-day moving average is at 78.226. It looks as though the 5-day moving average will cross the 20-day moving average within a day or so, unless, the market changes directions. Should the market close below 77.942 we will be concerned that we will have confirmation of a bearish chart pattern which could open the door to 74.16. The top of the Bollinger band is at 79.347 and the lower edge is seen at 77.105. The weekly chart is a bit more positive than is the daily chart. That said, should we remove the low of 77.00, our projected return to 74.16 will be quite likely. On the other hand if we do not remove that low and continue higher and remove 81.635 on the upside, we will open the door to much higher levels taking us back to 83 and then 89.

The S&P 500 continued on its upside trek in the Friday session. There were only two opportunities for the "buy the dips" crowd to get into this market and it was on January 28th and January 31st. The stochastic indicator, the RSI and our own indicator dipped slightly below the neutral areas and in classic fashion, reversed directions and headed back up to the overbought condition it has enjoyed since December. We do have signs of exhaustion on the chart, but as you have seen in the past these conditions can last far longer than you funds if, you are short the market. The stochastic indicator, our own indicator and the RSI are all pointing to higher levels. The 5-day moving average is at 1320.55. The top of the Bollinger band is at 1329.92 and the lower edge is seen at 1265.47. So long as the market remains above 1308.50 we will continue on this upward trajectory. Should we retreat, our firs support level will be seen at 1296.25, 1267.50 and then 1262.25. The weekly chart is very organized and looks bullish but not frothy, overbought as measured by all but the Thomas DeMark Expert indicator. The market is exhausted yet in a continued motion to the upside.

The NASDAQ 100 continued to the upside in the Friday session printing and closing at a new high for the year. Yes, this market is exhausted but continues higher. All the indicators that we follow herein are overbought yet all, except the Thomas DeMark Expert indicator, continue to point higher. The 5-day moving average is at 2362.00. The top of the Bollinger band is at 22382.55 and the lower edge is seen at 2257.04. The pattern we see on the chart is one of an ascending triangle. Triangles are not our favorite pattern because they are not always reliable. The weekly charts are overbought and look as though this market lurches forward and then back and fills for a while before continuing higher. Our projected high for this move is 2424.50. Should the market retreat, we would expect to see support at 2323, 2237 and 2191.

The Russell 2000 has a nine count on the daily chart. Naturally, this index is overbought as measured by all of the indicators that we follow herein. All indicators continue to point higher telling us that although there is a nine count and the market is extremely overbought, there is nothing indicating that we are going to retreat tomorrow. That said, we would not be surprised to see this index retreat in the coming days. This index has been a lot more volatile than the other indices we write about in this letter. Perhaps it is its volatility that draws people to trade the Russell 2000. We know that it was the volatility and the extreme move seen in this index that originally caught our attention. We noted that we could profit from the exaggerated moves in this index. Naturally the associated options reflect this fact. Thus it was a natural for spreads and packages.

There will not be an update on either gold or crude oil in this report as our charting system apparently has caught a cold and isn't working.

Related articles

• Denmark Seizes Amagerbanken (online.wsj.com)
• Amagerbanken : Defaults on Senior Debt (politics.ie)
• AMAGERBANKEN - $2.8 Billion Bank Failure In Denmark: Senior Bondholders Whacked 41% (jamblemag.com)

This week the precious metals have been supported by the turmoil in Egypt. Today it has been reported that President Mubarak has indeed stepped down as President has relinquished his powers to the Egyptian military...As vice President Omar Suleiman prepares to take control of the government. This is obviously very significant to the region as its geography and affiliation with the SuMed pipeline is vital to maintaining a steady flow of Crude oil throughout the middle-east.

The early reluctance of former President Mubarak resignation has caused demonstrating and rioting in the streets of Cairo as a protest to countries high poverty level. The markets have certainly reflected the Egyptian crisis. Much of the investor concern to protecting the SuMed pipeline against possible attack due to the civil unrest....

The SuMed stretches over 200 miles and transports crude along the Suez Canal. Obviously if the pipeline is disrupted it could send the price of Crude oil sky rocketing and higher Crude prices will be "Bullish" for precious metals. Hopefully the transfer of power to vice president Omar Suleiman will help calm the region..however, there are reports that several other countries in the region are also unhappy with their government leaders...

Thursday the Department of Labor reported that the number of Americans filing first-time claims for unemployment insurance fell to its lowest level since July 2008.

INITIAL JOBLESS Claims fell 36,000 to 383,000...This was much better than the analyst projections of 410,000.....

On Wednesday: Bernanke gave a testimony before the House Budget Committee and below are some of the highlights.....

*Inflation made here in the U.S is very very low"

*Markets don't expect inflation"

*While there is growing inflation in emerging markets

"the U.S financial markets are not exhibiting any sign of panic"

Tuesday 2/7

Once again China raised rates over night however, savvier investors chose to buy the precious metals in anticipation to a report that will indicate an acceleration in inflation to the fastest pace in 2 ½ years.... Inflation is "bullish" precious metals historically......As gold bugs we are aware that during times of crisis the precious metals tend to retain value better than most commodities...

This week the April (Globex) contract covered a $24.90 range trading as HIGH as....$1369.00 and as LOW as $1344.10...........Despite a change in Egyptian government I do not expect their transformation to be seamless......keep an eye on this region.....

MY SWING NUMBER FOR MONDAY 2/14

APRIL GOLD

RESISTANCE # 2..........................$1376.00

RESISTANCE # 1..........................$1368.00

PIVOT..........................................$1361.00

SUPPORT # 1.............................$1353.00

SUPPORT # 2.............................$1346.00

VOLUME 2/11............................118,000

RESISTANCE # 2.........................$30.57

RESISTANCE # 1.........................$30.26

PIVOT.........................................$29.97

SUPPORT # 1.............................$29.66

SUPPORT # 2.............................$29.37

Mike Daly / Gold Specialist
PFG BEST
mdaly@pfgbest.com
312-562-8029

877-294-4669

April CME live cattle futures on Thursday gapped lower on the daily bar chart and hit a fresh four-week low. The cattle market bulls have faded badly recently as a four-month-old uptrend on the daily chart has been negated and a three-week-old downtrend is now in place. The next downside price breakout objective for the cattle market bears is pushing and closing April futures prices below solid chart support at the January low of $109.87. A close below that key near-term technical level would produce more serious chart damage and then suggest a price move to strong technical support at the December low of $107.05. The live cattle futures market bulls would begin to gain fresh upside near-term technical momentum by producing a close back above chart resistance at $113.00. Near-term technical support for April live cattle futures is located at $110.00, at $109.80 and then at $109.50. Near-term resistance is seen at $111.10, at $111.50 and then at $112.00. Stay tuned!--Jim Wyckoff

The gold market bulls on Tuesday gained fresh upside near-term technical momentum by pushing April Comex futures prices to a fresh three-week high of $1,367.00 an ounce, as of this writing. The gold market has rallied well up from the late-January low of $1,309.10, basis April futures. A fledgling two-week-old price uptrend is now in place on the daily bar chart. Tuesday's gold market action is also starting to suggest the late-January low of $1,309.10 was just a "reaction low" amid price uptrends that remain firmly in place on the longer-term charts. Gold bulls' next near-term upside technical breakout objective is to produce a close above solid technical resistance at the $1,380.00 area. The bears' next near-term downside price breakout objective is pushing prices below trend-line technical support at the $1,340.00 area. Overhead chart resistance for April Comex gold futures is seen at $1,370.00 and then at $1,375.00. Support is seen at $1,360.00 and then at $1,350.00. Stay tuned!--Jim Wyckoff

As we get into the second trading month of the year where are investors seeking returns? The 5% correction we've seen in Crude has been fairly orderly and we suggest using this set back as a buying opportunity. Aggressive clients were advised to buy a combination of futures and options today in May, June or July contracts. Natural gas was hit by an additional 4% today...we still favor a probe of $4 before establishing bullish plays for clients. As we wrote in our 2011 outlook we will be a buyer below $4 for clients and a seller above $5 for clients.

A fresh 2 1/2 year high in the indices...the BULLS remain in the driver's seat. We are content on the sidelines and do not wish to add any exposure for clients. The dollar rally stalled today but we are looking for higher trade still. Aggressive traders can continue to fade rallies in the Cable and Euro. Our targets are 1.5800 and 1.3350 respectively. We are thankful we advised clients to exit their live cattle last week as prices are down just over 1% today. We will be looking to be a buyer from lower levels this week or next. On a breach of today's trend line we expect to see a 2-4% further depreciation. Silver was marginally higher gaining six out of the last seven sessions. The significance of today's action was a settlement above the 40 and 50 day MA. We should see a trade back over $30/ounce this week in the March contract. April gold will need to retake the 100 day MA; in April at $1361 to see higher ground...stay tuned.

Cotton was limit higher today picking up just over 4%. Our profits are no longer for clients in May put spreads. We will hold but recognize this will be an extremely bumpy ride. The trade was no as bad in coffee as we've been advising clients to gain bearish options exposure there as well anticipating a 10% correction. USDA report out Wednesday, get in the position you want today or tomorrow. We will be mildly long corn with some clients and have advised March put options in case we get a bearish surprise. In the debt complex we suggest bearish exposure in the short end of the curve.

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

This week's Gold trade traded a very choppy and volatile $51.90 range. We traded as low as $1309.10 on January 31st and as high as $1361.00 today February 4th. It appears that traders and investors alike are choosing to choose the precious metals as a "safe haven " investment due to the chaos in Egypt. The political tensions has resulted in rioting and violence as protesters have demanded a change in the Egyptian government. It has been reported that Egypt's military has been sent to protect the SuMed pipeline against possible attack due to the civil unrest.

The SuMed stretches over 200 miles and transports crude along the Suez Canal. Obviously if the pipeline is disrupted it could send the price of Crude oil sky rocketing and higher Crude prices will be "Bullish" for precious metals. The Egyptian scenario is far from a resolution and will continue to Shape the markets...

The Labor Department reported that unemployment rate fell to 9% in January....THIS WAS PLEASANTLY UNEXPECTED.......

WEEKLY EVENTS...

European central bank Boss Jean-Claude Trichet stated that "very close monitoring" of inflation warranted in the Euro region. This statement may have chased savvier European investors into the precious metals as a "safe haven " investment....

The weekly Initial Jobless Claims was 415,000 and this was expected to be 420,000...........

CONCLUSION

Early in the week it certainly looked as though the Gold market would sell-off below the psychological $1300.00 an ounce level due to many central banks decisions to raise key interest rates to combat their countries historically high inflation...These countries included China, India, North Korea, and Thailand however, due to the crisis in Egypt global investors have once again turned to Gold and Silver as their alternative investment of choice.

The resiliency of the precious metals continues to shine, as traders of the precious metals you will need to monitor the situation in Egypt and see if indeed Egyptian President Hosni Mubarak does step down - the bigger question ....WHO WILL REPLACE HIM?

MY SWING NUMBERS FOR 2/7

APRIL GOLD

RESISTANCE # 2......................$1367.00
RESISTANCE # 1......................$1359.00
PIVOT.................................... $1352.00
SUPPORT # 1..........................$1343.00
SUPPORT # 2..........................$1337.00
VOLUME..................................127,000

MARCH SILVER

RESISTANCE # 2........................$29.58
RESISTANCE # 1........................$29.32
PIVOT........................................$29.02
SUPPORT # 1............................$28.76
SUPPORT # 2............................$28.46

Mike Daly / Gold Specialist
PFG BEST
mdaly@pfgbest.com
877-294-4669
312-563-8029

There is a substantial risk of loss in trading futures and options. Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. PFGBEST, its officers and directors may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.

Related articles

• Will Egypt's Crisis Shut the Suez Canal? (businessweek.com)
• What's Next for Gold? (money.usnews.com)
• Eyes on Egypt - Feb 1 (energybulletin.net)

The Treasury market seems to be attempting to form an intermediate term low, but it has been in the process of doing this for months now and has made little upside progress. With speculators, both large and small, net short it feels like the market is at risk of a probing low before any sort of sustainable rally can occur.

If it weren't for persistent Fed buying, the long flush we have been patiently looking for might have already occurred. Today the Fed purchases a whopping $8.87 billion worth of Treasury securities with expiration dates ranging from 2016/2018.

Once again, the day's data suggested the recovery is on track. ISM services printed 59.4, to beat expectations of 57. Analysts were looking for a draw in factory orders but an uptick was reported instead.

Tomorrow morning the government will release the latest data on the jobs front. Analysts are expecting nonfarm payrolls to have seen an increase of about 150,000 jobs and the unemployment rate of 9.5% (a tick higher than last month). According to Ben Bernanke today, "we are seeing some encouraging job market signs." Despite the Fed's optimism, there seems to be some market jitters.

The monthly employment data often triggers pent up market volatility and can sometimes be a catalyst for a reversal. We can't help but think the market might make one more probing low (just to torture the remaining bulls) before turning around and the employment report might be the event that makes this a reality. If so, look for a plunge below 118 in the 30-year bond before or after the news for a place to be bullish. If it turns out to be a non-event...all bets are off and back to range trading we will go.

Due to time constraints and our fiduciary duty to put clients first, the charts provided in this newsletter may not reflect the current session data. However, market analysis and commentary does. Charts provided by Track 'n Trade, Gecko software.

**Seasonality is already factored into current prices, any references to such does not indicate future market action.

Treasury Bond and Note Option and Futures Trading Recommendations
**There is unlimited risk in naked option selling.

Flat

Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading

cgarner@DeCarleyTrading.com

1-866-790-TRADE
Local : 702-947-0701

http://twitter.com/carleygarner
http://www.linkedin.com/in/carleygarner
http://www.DeCarleyTrading.com
http://www.ATradersFirstBookonCommodities.com

*Due to the volatile nature of the futures markets some information and charts in this report may not be timely.

There is substantial risk of loss in trading futures and options.

Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.

Related articles

• Treasury prices dip as investors fret over inflation (reuters.com)

Like death and taxes, the price of oil is always with us. And like taxes, it may be President Barack Obama's worst nightmare at election time next year.

Among forecasters, there is a sharp division between those who see an inexorable rise in the price of oil and those who believe it will stabilize about where it is now.

The hawks see gasoline streaking ahead to $4-a-gallon this year and $5-a-gallon in 2012.

Others say demand will collapse and it won't go that high. The Energy Information Administration is very conservative in its forecasts and it gives very high prices only a 10-percent chance of coming about.

Adding to the confusion is a nasty little spat between the International Energy Agency in Paris and the Organization of Petroleum Exporting Countries over price, inventory and what OPEC calls "technical factors," such as pipelines down for repair or the loss of the Deep Water Horizon rig in the Gulf of Mexico last year. IEA is saying that OPEC is keeping its production quotas low to jack up the price-currently just over $90 a barrel and the highest grade Brent crude from the North Sea as high as $99 a barrel-and it is endangering the global recovery with its actions.

But OPEC Secretary General Abdalla Salem el-Badri has taken issue with the IEA for roiling the markets with weak data and speculation. "Supplying the world's media with unrealistic assumptions and forecasts will serve only to confuse matters and create unnecessary fear in the markets," he said.

OPEC, which drastically cut back its targets for production in 2008 with the collapse of the global economy, has, in fact, increased its production by 2.3 million barrels a day while formally not changing its declared targets. OPEC controls about 42 percent of the world's oil production.

Crude oil futures for March delivery on the New York Mercantile Exchange on Tuesday backed down on some profit-taking pressure from the recent strong gains. The past two sessions had seen prices tack on over $6.00 a barrel, in the wake of the Egypt civil unrest. March crude oil prices Tuesday rallied to a fresh two-week high of $92.45 a barrel, before backing down on the corrective pullback. There is strong overhead chart resistance located at the January high of $93.46. A close above the January high would provide the crude oil bulls with fresh upside near-term technical momentum to then suggest quick move to $95.00 and then a challenge of major psychological resistance at $100.00 a barrel. Recent price action in crude oil has now defined a clear near-term trading range, bound by the January high of $93.46 and by last week's low of $85.11. A close below strong technical support at $90.00 in March crude oil futures would begin to deflate the bulls a bit, and would also suggest prices trading sideways in the aforementioned range for at least the near term. Stay tuned!--Jim Wyckoff