Commodity Trader

Treasuries Mixed Ahead of Data and Holiday

2009-07-02T17:16:59Z

Bond and note futures traded mixed as traders spent the day squaring positions ahead of the long holiday weekend and tomorrow's non-farm payrolls data. The report is typically released on Friday but the government has adjusted the release date in observation of the 4th of July and the fact that the U.S. markets will be closed (for the most part). I can remember a few occasions in which market moving economic announcements were made on days in which the NYSE was closed, but various futures markets were open for abbreviated sessions. It typically isn't an ideal trading environment, luckily Friday won't be such a case.

]]> Today's trade was a roller coaster of emotions for those with Treasury positions on. Although a relatively narrow range, intraday trade was highly volatile. Some of this was at the hands of the spurts of economic data hitting the airwaves.

Early this morning, ADP announced their prediction of a draw of 473,000 jobs in the U.S. economy. Later we heard that construction spending was slightly lower than anticipated but the ISM manufacturing index was a little higher; pending home sales also saw a minor improvement. In a nutshell, the news was mixed and released bits at a time to create a hotbed of indecisive trade.

Also adding to the day's uncertainty, Reuters reported a story claiming that China wants to rekindle talks of a replacement reserve currency at the G8 meeting. The news send the dollar lower and the bonds followed. Chinese concerns over the health of the dollar may eventually lead to liquidation of their massive U.S. debt holdings. If this happens, the Fed's Treasury buying program will be nearly powerless.

As it turns out, our market analysis played out relatively well over the most recent trading sessions. On Friday of last week we mentioned "... we could be in the process of forging a temporary high in bonds and notes." And later added, "We see strong resistance in bonds near 119'17, but wonder if we will even see that high."

Unfortunately, the picture isn't so clear from here. Overall, I still feel like Treasuries can go much higher in the coming month or months. However, the recent rally has been swift and significant resistance remains in the mid 119'15's in the long bond. I will refrain from making any bold calls until later next week, when some liquidity comes back to the marketplace. However, my best guess is that we could be in store for a test of the 119'16 resistance area.

We also noted resistance in the 10-year note last week near 116'25, which held nicely. It now seems like we could be headed for the 117 area. Likewise, we think that the 5-year note could see the mid 115's soon.

That said, we don't recommend trading until next week (unless of course you just can't help yourself). Chances are that most of the traders still involved in the markets, will be long gone soon after the employment report in the morning.

Yesterday we mentioned that we liked the idea of selling the 124/125 calls on continued strength. Our clients were able to sell the August Bond 124 calls today for 20 ticks. If you would like to play it a bit safer, you may want to hold out for the chance to sell the 125's for similar pricing.

We see strong resistance in bonds near 119'17, but wonder if we will even see that high. Note traders should look for resistance near 116'25. The 5-year note could be getting toppy near 115. If you happen to have the 5-year note trade recommended last month, we recommend getting out at or near current levels with a small loss. We may even consider recommending a short position depending on how things look early next week.

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

Treasury Bond and Note Option Trading Recommendations

**There is unlimited risk in naked option selling.

June 26th - We recommended that our clients sell the August Bond 124 calls for 20

Treasury Bond and Note Futures Trading Recommendations

**There is unlimited risk in trading futures.

Flat

Eurodollar Futures Trading Recommendations

**There is unlimited risk in trading futures.

June 29 - Our clients were recommended to sell September Eurodollar futures while buying a 9937.5 call as insurance. The calls were getting filled near 7 ticks, and the futures near 9933. This makes the total risk on the trade at expiration $287.50 before commissions and fees.

Carley Garner

Senior Analyst / Commodity Broker

DeCarley Trading

cgarner@DeCarleyTrading.com

1-866-790-TRADE

Local : 702-947-0701

www.CarleyGarnerTrading.com

www.DeCarleyTrading.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.

Commodities take a Breath

2009-06-22T19:49:41Z

Any sustainable bull market needs to take a breath and rest up for the next leg. The long commodity trade that has been working for the last several months has been momentarily put on hold. So what to do as a trader? We have taken profits on longs, decreased our long exposure, tightened up stops or in some instances done the unimaginable, gone short. Yes that's right, what investors need to understand is when speculating in commodities it's only a wager on if prices are too high or too low. The contract size is the same, the leverage is the same, the risk parameters and profit potential don't change that much. The only change is the direction. I'm sorry if you only manage your portfolio as long, in commodities you will have some rough patches. As long as the global economic recovery is in question we may get some dollar strength and commodity weakness but we feel that will be temporary.

]]> Currencies

September Euro lost 30 ticks last week on two-sided trading. Support comes in at 1.3730 with resistance at 1.4025 followed by 1.4125. On the daily chart it looks like we could see a trade higher but the weekly chart is not so convincing, so for now we would stand aside.

The Aussie was lower by 25 ticks last week but prices did close over 2 cents off their lows. Support is seen between .7780 and .7800 with resistance at .8150. We may see a bit more upside but we ultimately expect a trade down to .7500 before any significant upside.

The Swissie managed to gain 16 ticks last week as selling has been rejected now for the last 2 weeks. With verbal intervention last week having little effect, prices could go either way at this juncture. Resistance is seen at .9300 followed by .9400 with support at .9130.

The Loonie gave up 113 ticks last week and on further pressure in energies and metals we would not rule out a trade down to .8500 in the coming weeks. Resistance is seen between .8925 and .8975 with support at .8675.

The Cable advanced 98 ticks on the week but prices have remained largely range bound and we see no reason to have exposure. Support is seen at 1.6150 with resistance eyed at 1.6650. The only play would be to trade the breakout above or below the aforementioned levels.

The yen was the best performer last week gaining 223 ticks and allowing clients out at a profit on their 3 cent July call spreads. Our objective was met mid-week as we advised clients to liquidate their positions at a 33% net profit. Resistance is at 1.0475 while support comes in at 1.0275 followed by 1.0150. We currently have no exposure.
The Kiwi was positive 4 out of the 5 sessions gaining 63 ticks last week. Resistance comes in at .6450 followed by .6550 with support at .6250.

The September US dollar was lower by 15 ticks. It has been a mixed bag in the last 4 weeks; there have been 2 positive and 2 negative. The weekly chart indicates prices should be moving higher but the daily chart is pointing lower so who knows? Resistance comes in at 81.30 while support is seen at 80.25 followed by 79.60.

Grains

July corn was lower by 23 ¼ cents last week. December corn closed on the trend line dating back to March, we suggest waiting to see how corn trades over the next few days but we're very close to getting long. Trade idea: long September futures while simultaneously selling 2 $4.40 calls for approximately 17 cents each. The idea is that on a move higher you will make more on the futures than lose on the options. On a move lower you have 34 cents of protection and it is unlikely to see corn break that much. Support on July comes in at 3.89 while resistance is at 4.10.

July soybeans gave up 65 cents last week and are $1.12 off their highs from just 2 weeks ago. We've warned you in recent weeks of a violent correction and our prediction is now becoming a reality. We're still looking to be a buyer of November beans closer to 9.80 prior to the 6/30 USDA report. The weather and traders positioning ahead of the report will determine if a trade to 9.80 is viable. Resistance is seen at 12.15 and support at 11.50 in July.

July CBOT wheat was lower by 31 ¾ cents last week having closed lower 11 out of the last 14 sessions. Support is seen at 5.44 with resistance between 5.70/5.74. July KCBOT was lower by 24 cents last week. Support comes in at 6.00 with resistance between 6.27/6.30. Both CBOT and KCBOT wheat have traded down to oversold levels so we should see bargain hunting on longs and short covering very soon.

Metals

August gold traded lower by $4.10 last week failing to break below the 50 day moving average at 927.70. Last week we saw sideways action with a $17.50 trading range. Resistance comes in at 940 followed by 960 with support at the 50 day moving average followed by 900. As long as prices stay above 900 this week we like the idea of purchasing $100 call spreads in October gold. Last week we were buyers of October 975/1075 call spreads for just under $2000 for clients.

July silver closed down 65 cents last week, most of that coming on Monday. Much like gold, silver was sideways much of the week with prices not wandering out of a 50 cent range from Tuesday thru Friday. Resistance is seen at 14.40 followed by 14.90 with support at the 50 day moving average at 13.93. On a trade below that level we would expect the 61.8% Fibonacci retracement level at 13.40 to hold. We are advising clients to buy $3 December call spreads, last week we were buyers of the $15/18 for clients just over $3000.

To view our full commentary which includes the sectors of energies, livestock, currencies, financials, grains, softs, and metals, subscribe to our 4 week free trial by visiting this link: http://mbwealth.com/subscribe.html.

Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Before trading MB Wealth recommends that you should carefully consider your financial position to determine if commodity trading is appropriate for you. All funds committed should be purely risk capital. Past performance is no guarantee of future trading results. There are no guarantees of market outcome stated, everything stated above are our opinions.

Gold Ranges

2009-06-18T21:16:37Z

Over the course of the last 12 months this Gold market has provided everything a Gold trader could want for trading Gold. The market has yielded mammoth trading ranges, huge volatility, and good volume. As a trader I certainly realize these are uncertain times in the worlds economies and it appears the threat of pending inflation has many investors scrambling to purchase physical Gold and other precious metals to use as"Leverage" and as an alternative to buying Stock.

Most Investors consider the Gold to be a "Safe Haven" in times of economic strife. Gold is the "anti Dollar" and with Crude Oil prices beginning to rally once again the Gold Community is settling in for what I believe to be continuous roller coaster ride.

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With General Motors recent bankruptcy and fall from the Fortune 500 and the continued
rise in unemployment, the continued threat from North Korea launching of nuclear missiles, and the possibilities of more Bail-out to name a few makes this economic atmosphere unlike any I have ever seen in my lifetime.

Like most traders I follow trends and use as much research as possible to make my trading recommendations. With the recent drop in Gold prices (almost $50.00 in a week) I realize you need to be very disciplined these days and I believe there has been profit taking do to the inability to break through the $1000.00 level recently.

This recent sell off may promote buying for the upcoming Wedding Season in India. The India culture purchases huge amounts of GOLD and SILVER... It is thought that of all the Gold that has been refined 12% of it is in Indian households. This is a phenomenal statistic!

Mike Daly / Gold Specialist / PFG 877-294-4669 / 312-775-3014 / mdaly@pfgbest.com

* THERE IS SUBSTANTIAL RISK TRADING FUTURES,OPTIONS, AND FOREX *

Economic Recovery vs. Inflation

2009-06-09T13:22:25Z

Call it what you want but traders make money on identifying an opportunity and capitalizing on it, not the why. To me inflation is a foregone conclusion, the timing is the tricky party. When you have Nassim Nichols Taleb setting up a new fund to exploit volatility and what he views as hyperinflation to come, it is time to gain exposure in commodities. When China is diversifying out of US dollars and Treasuries into commodities, it is time to gain exposure in commodities. The trend has reversed in most commodities from agriculture to metals, softs to energies and we would advise investors to allocate a portion of their portfolios to commodities.

]]> Livestock

August live cattle were lower by 65 ticks last week. Resistance comes in between 80.25/80.50 while support is seen at 82.00. August feeder cattle were lower by 5.825 losing almost 6% last week. Resistance comes in between 98.50/99.00 while support is seen at last week's low at 95.625. With beef prices down it may be a good time to start approaching cattle from the long side. Fundamentals show that beef consumption starts to decline in hot weather, but so does supply as feed lots are short of inventory. Traders should look to enter longs on or about June 18 and hold through February 5. This trade has worked 34 times in the last 38 years. Past performance is not indicative of futures results.

July lean hogs were lower by 5.425 last week losing 8.5% on the week. Support is seen at 59.325; last week's low, resistance is at 62.00 followed by 64.00. The US is working on getting China, Russia, South Korea, and several smaller importers to end their ban on buying US pork but until this happens demand is lacking. Health officials agree that eating pork is safe, but lower prices have encouraged these countries to protect their domestic markets.

Grains

The USDA said that 93% of the corn crop was planted and 70% of it was rated good to excellent. July corned gained 9 ¾ cents last week making it the seventh consecutive positive week. Resistance is seen at 4.50 with support at 4.30 followed by 4.15.

Weather, planting progress and growing concerns are kept at bay for the time being as Wednesday we get a USDA crop production report; markets expect a drop in ending stocks from last month's 1.6 b.b. We're still anticipating getting long December 09'on a break between now and the June 30th USDA planted acreage report.

The USDA said that 66% of the soybean crop was planted, down from the five-year average of 79%. July soybeans strength continued as prices were higher by 39 ½ cents last week. Resistance first comes in at 12.30 followed by 12.55 with support seen at 11.80 followed by 11.45. We continue to hold July puts for clients at a slight loss expecting a break in the next 2/3 weeks. Last month's report put 09' ending stocks at 130 m.b. A cut to 100 m.b. or lower would be bullish, outside of that we think the market has factored in smaller ending stocks.

The USDA said that 89% of the spring wheat was planted and 73% of it was rated good to excellent.

The USDA said that 45% of the winter wheat was rated good to excellent. July CBOT wheat was lower by 13 ¾ cents last week with KCBOT giving up 12 ¼. Wheat assumes a follower's roll to corn and soybeans as wheat does not have the current demand. On CBOT wheat resistance is seen at 6.40 followed by 6.55 with support at the 200 day moving average at 6.11 followed by 5.90. KCBOT resistance is at 6.95 with support at last week's low at 6.68 ¼ followed by 6.50.

Softs

Dow Jones reported that no damaging cold is expected for Brazil's coffee crop in the immediate future. July coffee was lower by 3.15 cents last week as longs seem to be booking profit after the 25% + move in recent weeks. Resistance is at 137.00 with support between 131.50/132.50. Expect to see 125/127.50 before we're interested in getting long again.

July cocoa was higher by $107 last week but the coming strength in the dollar should temper any more up movement. Resistance comes in between 2550/2575 with support at 2650. On a move higher on the dollar look for a break to 2500 so institute bearish plays via short futures or options.

July sugar closed down 16 ticks as 16 cents proved to be formidable resistance. Support comes in at 14.80 followed by the 50 day moving average at 14.48. Short term we would not rule out a break especially with weakness in energies but longer term we expect higher prices. That being said we advised clients to align themselves with options to take advantage. Sell October 18 cent calls, sell March 14 cent puts and buy March 19 cent calls. All in this trade costs $280.

The USDA said that 77% of the cotton crop was planted, down from the five-year average of 81%. July cotton closed 188 ticks lower last week closing just above the 9 day moving average. Resistance comes in at 56.85 while support is seen at 54.00 followed by 52.50. We'll start exploring longs in December on an additional 3-5 cent break.

July fcoj was lower by 4.20 cents last week closing down the last 6 sessions. We see resistance at 93.00 and support at the 50 day moving average at 87.40. On a trade near 80 cents we will start looking at long opportunities.

To view our full commentary which includes the sectors of energies, livestock, currencies, financials, grains, softs, and metals, subscribe to our 4 week free trial by visiting this link: http://mbwealth.com/subscribe.html.

An Evolving Market: Why education is vital in trading

2009-06-01T20:21:27Z

We have continued to do our weekly newsletters and daily blogs as scheduled but have not done as many topic specific articles of late. We are reaching out to get some suggestions from would be commodity investors or active traders on some topics of interest or subjects you would like clarified. This week we will be publishing an article on why understanding the "Greeks" is important to commodity options trading. Please comment for further suggestions.

Financials

Stocks: The Dow rose 223 points or 2.7% to 8500, the S&P picked up 3.6% or 32 points to 919 while the NASDAQ gained 82 points or 5% to 1774. With May now at our backs we've put in three positive months in a row, marking the best 3 month performance by percentage since 98'. This is an improvement from the doomsayer's just months ago. We've been consistent in our assessment and still expect a 10-15% correction is around the corner. For much of May the S&P was range bound between 875 and 930 and the Dow between 8100 and 8550, will this continue? Although we expect a downward break, the move out of these ranges should signal the next direction.

Bonds: September 30-yr bonds were lower by 11.5 ticks last week; trading lower 9 out of the last 10 weeks. Prices were able to rally just over 3 basis points off the weekly lows so we should get an additional bounce. Support is seen between 116'10/116'20 with resistance at 118'20. In the coming weeks we expect a move up to 120'00/121'00. September 10-yr notes were lower by 18.5 ticks last week. Support is seen at 116'00 while resistance comes in between 117'20/118'00. As for the Euro-dollar, stay short March 10' as long as 99.095 remains as the contract high. As for options we advised clients to buy December 09' 99.00, 98.75, and 98.50 puts. Contact us for pricing. NFP # out Friday; loss of 525,000 jobs and unemployment rate just over 9% is factored in.

]]> Currencies

There are multiple central bank meetings this week; RBA on Tuesday, BoE, ECB and BoC on Thursday.
The commodity currencies racked up big gains last week. The Aussie finished 164 ticks higher and in the last 13 weeks has made it to higher ground 10 of those weeks. For the month of May the Aussie finished 27% higher. We could see a 5-8 cent correction with no chart damage. Resistance is at .8100 while support is at .7850 followed by .7700. The Loonie gained 223 ticks, higher the last 9 days. It continues to follow energies and metals which have burst higher of late. Resistance is between .9225/.9275. .9000 should serve as support but don't rule out a trade to .8700.

The Kiwi picked up 216 ticks and has been positive 5 out of the last 6 weeks. Support is seen at .6250 while resistance is at .6500. These 3 currencies may have moved too far too fast and a correction should follow.

The Euro was higher by 108 ticks last week as all attempts at lower trades were met with buying. Support comes in between 1.39/1.3925 while resistance comes in at 1.4175 followed by 1.4350.

The Swissie continues to follow the Euro's lead, up 141 ticks last week trading to levels not seen since January. Resistance comes in at .9450 and support at .9250.
The British pound was higher by 215 ticks last week trading to a 7 month high and after 2 failed attempts to get short we would stand aside. Resistance is seen at 1.6425 and support at 1.5725.

The yen was lower by 50 ticks last week but things could have been much worse if had not been for the 189 tick advance on Friday. Support is seen at the 50 day moving average at 1.0250 while resistance comes in between 1.06/1.0625. We advised clients to buy July 105/108 call spreads last week for $1000 with a target of $2000+.

The US dollar was lower by 74 ticks last week to trade to its lowest price since 9/8 making a new 8 month low. We see no significant support until 77.50 but prices are over extended to the downside so don't rule out a dead cat bounce. Resistance comes in at 80.00 followed by 81.00.

Metals

August gold closed up $21.30, the highest close since late February. Now that prices are thru 975 we may see prices trade back to the mythical 1000 mark. The contract high for August in 09' is $1008.90 and in 08' is $1020.70.Will we see a new high this week? We remain long option spreads for clients, on new positions last week we bought clients the October 1000/1200 spread for just under $4,000. Gold has been higher for the last 4 weeks and while the weekly and monthly charts still look like there is more upside, the daily chart is not as friendly as prices are becoming increasingly overbought. Support is seen between 960/965 followed by the 9 day moving average at 950.

July silver closed up 89 cents, the highest close in nine months. On the month of May prices gained 27%, its largest monthly dollar gain since January 83'. Prices have now made their way back over the 50% Fibonacci retracement level assuming a high just below $22 and a low just below $9. Support is seen at 15.25 with resistance first at 16.25 followed by the 61.8% Fibonacci level at 16.75. We advised clients to exit their remaining December $15/20 call spreads between $6,600/7,000. We had been in that trade for 5 months at an average cost of $2,000; not too bad. With the proceeds we advised clients to buy September $16/19 call spreads for approximately $3,300. The logic was to raise cash, book a profit and have more monies to play a correction. On a further advance we still have exposure and will look for a profit of $1,000/1,500. On a correction we have the option to buy back the $19 or to buy more silver with the remaining cash.

To view our full commentary which includes the sectors of energies, livestock, currencies, financials, grains, softs, and metals, subscribe to our 4 week free trial by visiting this link: mbwealth.com/subscribe.html.

Disclosure: The risk of loss in trading commodity futures and options can be substantial. Before trading MB Wealth recommends that you should carefully consider your financial position to determine if commodity trading is appropriate for you. All funds committed should be purely risk capital. Past performance is no guarantee of future trading results. There are no guarantees of market outcome stated, everything stated above are our opinions. Calculations of profit and loss have not factored in commissions and fees.

When in Commodities, Do what China does

2009-05-27T14:33:09Z

If China is increasing protein in their diets and buying more soybeans, then maybe you should be long soybeans. If China is stockpiling copper to have an ample supply for building an infrastructure, then maybe you should be long copper. If rumors circulate that China is diversifying their reserves from US dollars by buying precious metals, then maybe precious metals should be in your portfolio. China has become a major energy user so there is a logical potential for energies to bid higher for years to come. The moral of the story here is to view what China does as to what the smart money is doing and maybe investors should follow their lead.

]]> Energies

July crude oil advanced $3.85 to trade at 6 month highs. Resistance is seen between 62.25 and 62.50 with support at 60.00 followed by 57.50. July heating oil gained 10.71 cents last week but has been unable to trade above 1.57 after multiple attempts. The last time prices were above those levels was mid-January. On a move thru 1.57 look for an additional 7-10 cents. Support is eyed between 1.50/1.51. Prices could retrace 10-15 cents with no long-term chart damage. The Memorial Day holiday marks the beginning of the summer driving season. July RBOB gained 13.27 cents last week to trade to its highest level in 09'. Resistance is at 1.8150/1.8300, support is seen at 1.75 followed by 1.70. On setbacks we'll be entertaining 20 cent call spreads in August. OPEC will meet on May 28th and so far, the consensus seems to be that they will not change production levels.

July natural gas fell 58 cents last week, down 14%. In the first 2 weeks of May prices advanced over $1 and now in the last 2 weeks prices have reversed and we are back to where prices were 4 weeks ago. Support is seen at the contract low at 3.40. Once a low is determined, start scaling into mini futures but until then we have an option play. Sell the $3 or $3.25 August puts while simultaneously buying the September $8 calls. As of Friday's close, for virtually no debit one could sell 1 August $3.25 put and purchase 8 September $8 calls.

Financials

Stocks: Last week the Dow, S&P and NASDAQ all registered slight gains but we have not changed our view that a 10-15% correction is in the very near future. This week being a shortened trading week and light on volume may be an opportune time for the shorts to begin the move lower. The recent dollar drop signals that investors are willing to put risk back in their portfolio and being that prices have advanced 35% more or less, the Johnny came late investor, may have entered at an interim top. On a setback in the Dow we are looking for a move to 7750 then 7250 and for the S&P 830 then 765. A move above 8500 and 915 respectively would most likely mean that traders have bought themselves more time before we get the unavoidable correction.

Bonds: S&P lowered its outlook for the UK economy, saying that government debt may increase to 100% of GDP in the next few years and lose its AAA credit rating. US Treasury Secretary Geithner tried to ease investors' concerns, saying that he is committed to bringing down the budget deficit over time so that the US's high credit rating is preserved but based on market movement, not everyone is a believer. The trend remains down in treasuries as June 30-yr bonds were lower by 3'16.5 points to trade at their lowest level in 09'. Support is seen at 118'10 followed by 117'20, mild resistance comes in at 120'16 followed by more significant at 122'00. June 10-yr notes were lower by 2'08.5 points, also to new 09' lows. Resistance is seen at 120'10 while support comes in at 118'00. After 12 consecutive positive days March 10' Euro-dollars finally ran out of gas. Resistance is seen at the contract high at 99.095 while support is seen at the 20 day moving average at 98.81. We suggest your current short position to be 25-40% of the ultimate position you want to own. For every $10k you should be short 3 to 4 contracts; $750K-$1M in leverage.

Grains

The USDA reported 62% of the corn was planted, down from the five-year average of 85%. July corn was higher by 17 cents though is exhibiting signs of a top as prices have consolidated for the last 2 weeks. Resistance is seen at 4.35 while support comes in between 4.17 and 4.20. We are nearing the end of the corn planting window so wet vs. dry weather will be the key. If farmers are able to get in the fields which is the scenario we believe, this should take prices below $4 where we will be advising long entries.

The USDA reported 25% of the soybean crop was planted, down from the five-year average of 44%. July soybeans were higher by 41 cents last week having traded higher now for the last 4 weeks.The June $11 calls that we sold for clients were turned into short futures positions as of Friday's close, as opposed to taking a loss, we advised clients to keep their short July and buy November against it 1:1. This is a spread we're already in for other clients and think we'll be able to recoup the loss on the option in this play. Not only did prices in July start to trade down, closing over 25 cents off their highs but the spread came in 25 cents as well. Support is seen at 11.50 followed by 11.20. On a close below the 20 day moving average at 11.07 we could see a trade down to 10.60. On a move higher, resistance is at 11.90 though a potential test of $12 is not impractical.

The USDA reported 50% of the spring wheat was planted, down from the five-year average of 90%.

July wheat jumped up 40 1/2 cents, the highest close in over three months, on concerns that planting is taking too long. On July CBOT wheat resistance is seen between 6.20 and 6.25 while support comes in between 5.93 and 5.97 followed by 5.75. July KCBOT wheat gained 29 ¾ cents last week to trade to its highest level since 1/12. Resistance is seen at 6.70 with support at 6.45.

Gold Bulls Working on Price Uptrend

2009-05-20T22:19:29Z

June gold futures prices are hovering near the top of the recent trading range as the market is in a four-week-old uptrend on the daily bar chart. A close in June gold futures prices above solid technical resistance at last week's high of $934.80 would provide the bulls with fresh technical strength to suggest another leg up in prices in the near term. The next upside technical objective for the gold market bulls is to push and close June futures prices above chart resistance at the March high of $970.00 an ounce. A push in prices above that level would open the door to a challenge of the February high of $1,009.80. The contract high in June gold was scored in March of 2008, at $1,035.00.

]]> click on the chart to enlarge

If the precious yellow metal sees its futures price move above major psychological resistance at $1,000.00 an ounce, then bigger daily price moves can be expected. On the downside, technical support for June gold is located at $920.00, at this week's low of $915.20, at $910.00 and then at $905.00. Major psychological support is located at $900.00 an ounce. Multiple closes below $900.00 an ounce would provide the bears with some fresh downside near-term technical momentum to begin to suggest the market has put in a near-term top.

Stay tuned! Jim Wyckoff jim@jimwyckoff.com

Rates Stabilize

2009-05-19T23:45:39Z

Interest rate products stabilized on Tuesday allowing the market to digest yesterday's swift sell-off. We warned you last week that this would be a slow news week...and it has been. The only guidance that Treasury traders seem to be relying on is the direction of equity trade. Unfortunately, thin stock volume has resulted in yesterday's questionably relentless rally and today's refusal to correct. While we have been bullish the S&P since the index made its low in the 870's we were a little surprised at the magnitude of the rally. That said, we still believe that the S&P will make its way higher, approximately to the 940 area; if this is an accurate assumption, Treasuries should find themselves retesting the May lows and slightly beyond.

Keeping bonds and notes under pressure are assumptions that the U.S. economy is showing signs of recovery. The newest evidence supporting this theory is a statement made by Gary Stern, President of the Minneapolis Fed;

"As we get into the middle of 2010 and beyond, I would expect to see a resumption of healthy growth." He also downplayed the role of deflation, "To date, there is scant evidence of deflation in so-called core measures of inflation." He added, "If economic growth resumes in the United States as I expect, the threat of deflation should diminish commensurately."

]]> Additionally, while the Fed has taken a breather when it comes to note issuance, corporations have not. Barclays is looking to sell at least $500 million in non-guaranteed 10-year notes and Verizon issued nearly $4 billion in various 2-year instruments.

We are going to stick with our original call for now...We think that the T-bond could see 119'08 and maybe even the mid'118's before finding buyers. Note traders should look for support near 119'11 and again at 119. The first area of support for the 5-year note futures looks to be near 116'21 with 116'01 being significant support.

Treasury Bond and Note Option Trading Recommendations

**There is unlimited risk in naked option selling.

May 7th - Sell the June 117 puts for 25 or better

· May 11 - This trade was exited near 10 to 12 ticks to take a quick profit

Treasury Bond and Note Futures Trading Recommendations

**There is unlimited risk in trading futures.

Flat

Eurodollar Futures Trading Recommendations

**There is unlimited risk in trading futures.

Flat

Carley Garner

Senior Analyst / Commodity Broker

DeCarley Trading

cgarner@DeCarleyTrading.com

1-866-790-TRADE

Local : 702-947-0701

www.CarleyGarnerTrading.com

www.DeCarleyTrading.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.

Bulls, Bears, Pigs and Sheep

2009-05-18T19:44:42Z

You don't need to go to the zoo to see animals, rather look at the common investor and how they maneuver within their portfolio. I'm not talking about giraffes and elephants but rather bulls, bears, pigs and sheep. Bulls make money in a bull market, bears make money in a bear market, pigs are greedy and will lose money in the long run, while sheep are led to the slaughter as they fail to do their own research and just follow the masses. It is crucial to one's investment success to be able to maneuver and recognize changes in trends, to be disciplined, to eliminate fear and greed and to think outside the box. The current market dynamic is challenging and will remain this way for quarters and perhaps years. We suggest investors seek the help of professionals and if they truly are animal lovers watch the discovery channel, go to the zoo or get a pet, but do not invest like an animal.

]]> Energies

DOE reported crude oil supplies were down for the first time since February, but before energy bulls get excited, the rationale is less supply rather than more demand. July crude oil closed down 2.74 closing lower on the week after 3 positive weeks. We expect prices to move lower from over bought levels. Resistance is seen between $58.50 and $59 with support first at $56.30 followed by the 20 day moving average at $54.95. July heating oil lost 11.74 cents last week closing just above the 20 day moving average. Resistance comes in at 1.52 with support at 1.36, on a breach of that level prices should retrace to levels from 3 weeks ago near 1.31. July RBOB gave up 3.30 cents but did remain within a 10 cent trading range. Resistance is seen at 1.71 with support at 1.63 followed by 1.56. If crude is down $4-6 look for a trade to $1.40/1.45.

DOE reported underground supplies of natural gas were up 95 billion cubic feet last week to 2.013 trillion cubic feet. Supplies are now up 33% from a year ago. July natural gas ended down 22 cents after reaching a 6 week high. After the impressive $1.30 advance we would expect some back and fill action. We will be exploring mini futures and selling puts and buying calls for clients. Resistance is seen at $4.50 with support at $4.05 followed by $3.85. On July an ideal entry would be between 3.70 and 3.85.

Livestock

The USDA estimated the week's beef production at 516.0 million pounds, down 5.7% from a year ago. The USDA expects beef production to be down slightly in 09' and down 2% in 10'. Their average price estimate for choice steers is 86.5 cents per pound in 09' and 90.5 cents per pound in 10'. June live cattle were lower by .325 last week. Support at .8100 with resistance at .8400. We would be a buyer/seller on a move out of that range. August feeder cattle were up 100 last week. Resistance at 102.25, support at 100.50.

Pork production was estimated at 424.4 million pounds, up 2.5% from a year ago. The USDA estimated that pork production will be down 3% in 09' and down 0.5% in 10'. Their average price estimate for barrows and gilts is 45.5 cents/lb. (61.5 cents lean) in 09' and 50 cents/lb. (67.5 cents lean) in 10'. June hogs closed down 1.775 last week. Support comes in between 65.25 and 65.75 while resistance is at 68.90. We're still looking for 71+ and own 72 calls for clients; put limits to exit at 170 points, paid 90 points.

Financials

Stocks: The Dow suffered its second loss in 10 weeks to lose just over 300 points or 3.6% to 8269. The S&P had its worst week since early March giving up nearly 50 points or 5% to 883. The NASDAQ snapped a 9 week winning streak to lose 59 points or 3.4% to 1680. The media reports "green shoots", I report "brown sh-ts" in terms of what is to come. We have cautioned investors about becoming too enamored with the most recent 35%+ rally and feel it has now run its course with more down to come. As consumers continue to spend less, as seen with last weeks' retail sales and credit card defaults, increased fear will return to the marketplace. When a governor throws out the idea to sell off icons too raise money, you know things are rough. 900 should serve as resistance on the S&P and 8400 in the Dow, support at the 20 day moving average at 880 and 8200 respectively. On a breach of those levels 830 and 7800 would be our objectives.

Bonds: June 30-yr bonds traded higher by 2'15.5 points gaining for the first time in 8 weeks. Both the daily and weekly charts indicate we should get a bounce short-term. Support is seen at 122'10 followed by 121'20 with resistance at 124'14 followed by 126'00. The rally in Treasury's may still have upside being the amplified Fed buying. June 10-yr notes were higher by 1'03 last week to close just above the 20 day moving average. Support is seen at 120'27 while resistance comes in at 122'15. March 10' Euro-dollars have been up for the last 9 sessions making new contract highs. Yes, that is against our current holdings but sell into this strength because one day soon it will end. We would recommend light exposure; for every $10,000 allocated to this trade you should be short 2 contracts.

Currencies

The Euro traded lower by 183 ticks last week after reaching a 7 week high against the dollar. After failing to get thru 1.37 which will now serve as resistance the Euro should move lower this week. Support is seen at 1.3350 followed by 1.3250. On a significant dollar rally we could see 1.30.

The Loonie was lower by 222 ticks closing lower for the first time in the last 10 weeks. We advised clients to exit their long futures and to buy July 83 cent puts against their long options exposure in September. Resistance is seen at .8625 with support at .8400 though we could see a move to .8200 if energies fall apart. The 50 day moving average is .8175 and if prices were to get close we would cover our puts and look to reverse.
The Aussie gave up 220 ticks as commodity currencies were punished. If the dollar and yen were to continue north and commodities continued south for the time being we could get back to .7000. Resistance is seen at .7625 with support at .7400 followed by .7300.

The Swissie lost 157 ticks last week, which virtually came all on Friday, down 160 ticks. Resistance comes in at .9000 with support between .8875 and .8825. If the Euro was to get hit hard the Swissie could trade to .8700.

The Pound closed only 66 ticks lower last week and may need to play catch up on the downside this week with other currencies. Resistance is seen between 1.5275 and 1.5375 with support at 1.4950. For a position trade we are advising getting short with a target of 1.46 with stops above 1.5350.

With the exception of the dollar, the yen was the only currency to gain ground last week picking up 385 ticks. Support comes in at 1.0350/1.0375 with resistance at 1.0625 followed by 1.0800. If equities continue south the Japanese yen should continue north. The BOJ is expected to do nothing on rates this week. We would advise recent long entries to put in profit orders.

The Kiwi lost 196 ticks last week. Resistance is at .6000 with support eyed at .5725. On a further commodity correction expect .5600.

The US dollar was higher by 74 ticks to put in a positive showing after 3 consecutive losing weeks. The impressive part was the dollar made a new 4 ½ month low and held it's ground. 82.00 should continue to act as support while resistance is seen at 83.75 then 84.90. Being prices are so oversold, if we garner momentum in the next few weeks 85.50/87.00 is attainable.

Grains

As of last week the USDA said 48% of the corn was planted, down from the five-year average of 71%.The USDA estimated 09-10 US ending stocks at 1.145 billion bushels, down from 1.600 billion bushels in 08-09. July corn was down 2 3/4 cents after trading to its highest level in four months. Resistance is seen at 4.32 while we see support at 4.15 followed by 4.03. When July trades down to 3.85 we'll be advising clients to buy December 09'.

As of last week the USDA said 14% of the soybean crop was planted, down from the five-year average of 25%. The USDA estimated 09-10 US ending stocks at 230 million bushels, up from 130 million bushels in 08-09. The USDA reduced its estimate of the 08-09 US ending stocks from 165 to 130 million bushels. That put the ending stocks to use ratio at just 4%, matching the lowest in 6 years. July soybeans ended up 25 3/4 cents reaching a 7 month high before backing off. We feel an interim top has been made and in the short-run prices will come off. Resistance is seen at 11.50 with support at 11.15 followed by 10.90. There is an outside chance we see 10.30 but much of that will depend on the weather. We expect to collect the entire premium for clients who sold the June $11 calls. Although the trade is currently against us we like the idea of selling July and buying November on a spread looking for the spread to narrow, as of Friday's close the spread was -1.54 ¾.

As of last week the USDA said 35% of the spring wheat was planted, down from the five-year average of 78%.The USDA estimated 09-10 US ending stocks at 637 million bushels, down from 669 million bushels in 08-09. The USDA is expecting world wheat production of 657.6 million tons in 09-10', the second most ever, helped by anticipated increases in Argentina and Australia; weather contingent. July CBOT wheat closed down 13 cents as prices were unable to take out $6. Resistance comes in at 5.85 with support at 5.65 followed by 5.40. July KCBOT lost ¾ of 1 cent failing to get thru 6.45 on the upside. Resistance comes in at 6.38 while support is seen at 6.18 then 5.95.

Softs

July coffee closed up 90 ticks, trading to the highest level in over 6 months. The recent upswing is on easing of economic worries and expectations for a smaller Brazilian harvest. Selling capped the move at 130 which should serve as resistance as coffee showed signs of exhaustion last week, support at 126 followed by 122.

The USDA kept its estimate of the Florida orange crop unchanged at 158 million boxes, but increased the projected juice yield from 1.64 to 1.65 gallons per box. Florida's orange groves badly need rain as prices have advanced to nearly 7 month highs gaining a further 2.50 cents last week. Last week's high should act as resistance at 95.50 with support coming in at 90.00. Stand aside but look at weather in So. Florida to determine direction.

July world sugar was down 40 ticks following oil prices lower but only after probing 16 cents and trading at levels not seen since July 06'. The recent run has been impressive and was most likely caused by a larger than expected world deficit. The USDA estimated that there will only be 289,000 tons of sugar in the US at the end of the 09-10 season. ISO reported world production of sugar will fall short of consumption in 08-09 by 7.8 million tons. For 09-10, the ISO expects a world production deficit of roughly 4.75 million tons. Resistance is seen at 15.60 while support is at 14.65; the 20 day moving average. Expect 13.50/14.10 where we would start to explore longs again.

As of last week the USDA said 32% of the cotton was planted, down from the five-year average of 39%. The USDA estimated 09-10 US ending stocks of cotton at 5.6 million bales, down from 6.8 million bales in 08-09. July cotton was lower by 3.50 cents making last week the second negative week in the last ten. It appears an interim top was made as prices should head lower. Support is at 54.00 followed by 52.25 with resistance at 59.00. We advised clients to exit their July/ December spreads unscathed.

July cocoa was lower by $161 closing lower 4 out of the 5 days last week. Support comes in between 2225 and 2275 with resistance at 2400; the 20 day moving average. If the dollar does in fact move higher look for cocoa to continue south, we will explore longs closer to 2000.

Metals

June gold gained $14.30 last week trading to its highest levels since 4/1. Resistance comes in at 955 while we see support at 915 followed by 890. Considering outside markets with the US dollar gaining, and equities and energies falling the gold market held up well. For options we still like the idea of $100/150 call spreads in October and in terms of futures we have been advising clients to scale into mini-gold contracts in June.

July silver was unchanged on the week as prices have yet to make up their mind on what the next direction will be. Do not over think this trade, the trend is up but prices are oversold, the play is to be cautiously long until the market tells you different. Tighten up stops but don't exit because there may be more immediate upside on futures. In terms of options if you are near your objective take a profit. Closely monitor the gold: silver ratio that we mentioned last week. Resistance is seen at 14.35 followed by 14.60 while support comes in at 13.50 followed by 12.85/12.90.

Corn Bulls Still Have Upside Momentum

2009-05-14T19:55:26Z

July corn futures at the Chicago Board of Trade on Wednesday hit a fresh four-month high of $4.34 a bushel. Prices are in a steep three-week-old uptrend on the daily bar chart and the next upside price objective for the bulls is to produce a close above the January high of $4.49 1/4 a bushel. Above that lies strong chart resistance at $4.72 1/4, basis July futures. A close above that chart level would open the door to a challenge of major psychological resistance at $5.00 a bushel. Importantly, should July corn futures post a close above $4.72 1/4, technical resistance levels become fewer and farther between--meaning bigger daily price moves are likely, both on the upside and on the downside.

]]> click on the chart to enlarge
The corn market bulls would become deflated by a close below major psychological support at $4.00 a bushel, basis July futures. Importantly, corn and the rest of the grain futures markets will continue to keep one eye on the crude oil market. Crude oil has been a leader in the commodity markets for quite some time. If crude oil prices can continue to trend higher, then corn and the grains will very likely be pulled along for the ride. However, if crude oil starts to back down, the corn market and the grains are likely to do the same.

Stay tuned! Jim Wyckoff jim@jimwyckoff.com

Golden Volatility / Opportunity

2009-05-13T19:50:18Z

The recent trade in the Gold market has proved the resiliency of Gold traders. In the past eight months we have traded a $300.00+ range and $20.00 + daily ranges are now common place. There have been many reasons for this trend the Government bail-outs, huge unemployment numbers (9% unemployed) housing foreclosures, and Historic Financial Institutions failing just to name a few.

With the Stock Market falling from the 14000 level to the present 8200 level and Crude Oil dropping From the $147.00 per barrel level to $59.00 per barrel presently it certainly proves the stability of Gold. Gold has certainly been a "flight to safe haven" market for investors. We are presently seeing a sideways to BULLISH trend in my opinion. Despite smaller ranges of late we are still seeing 50.00+ ranges monthly and it appears technically we may have a move to the upside.

]]> I have witnessed a huge amount of physical Gold and Silver (Bullion and Coins) being purchased and shipped recently. There are many reasons for this such as Impending inflation worries (Gold should rally in inflationary times), having physical metals creates a leverage and credit with lending institutions, adds diversity to your portfolio, and the IRS allows Gold to be held in pension funds.

I have been recommending trading Gold from a long term perspective simply to avoid these huge volatile swings. Most of the huge swings have occurred during the night session as of late. This makes it very difficult to carry position over night regardless of using stop -loss orders. The Trading ranges and swings have been huge. I have been trading Bull Call spreads.

If you are looking to talk gold trading strategies or looking to purchase physical metals I can help.

Mike Daly

Senior Broker / Gold Specialist

PFG BEST
877-294-4669
312-775-3014

mdaly@pfgbest.com

Interest Rates Creep Lower

2009-05-12T21:34:53Z

The Fed was at it again, but this time they were buying securities on the short end of the yield curve. The Fed purchased $6 billion in fixed income securities maturing in 2012 and 2013 (the realization that these are now considered short-term debt instruments makes me feel old). At the same time, they auctioned $34 billion in 4-week bills.

It was another data challenged session, leaving market direction up to equity market action and of course the Fed. Traders are noting that there don't seem to be as many institutional or large spec traders as there have been in years past and this makes the Fed an even bigger "player" than it may otherwise be. On the other hand, the stock indices pared early morning losses, which worked directly against the Treasury rally. It is clear that the near-term direction of bonds and notes will be highly dependent on the path taken on Wall Street. We are still leaning slightly lower in stocks and higher in bonds but remind traders that it is important to be nimble as circumstances are changing quickly.

]]> The U.S. trade deficit widened in March but beat analyst estimates by coming in at a negative $27.6 billion to prevent the U.S. dollar index from a technical rebound and keeping bond buying modest.

Today's pause makes us wonder whether the bond will find follow through buying to bring it to our 124 target, just under 122 in the note. If you are long this market, we recommend playing it close to the chest as we cannot rule out another run at the lows. If this turns out to be the case, we will once again be looking for ways to gain a bullish stance.

Last week we noted that bonds and notes were both a buy near 120; we hope that you took our advice! No we are suggesting that you lighten the load. We are leaning higher, but the risks have increased and there maybe better opportunities to be bullish in the coming sessions.

Treasury Bond and Note Option Trading Recommendations

**There is unlimited risk in naked option selling.

May 7th - Sell the June 117 puts for 25 or better

· May 11 - This trade was exited near 10 to 12 ticks to take a quick profit

Treasury Bond and Note Futures Trading Recommendations

**There is unlimited risk in trading futures.

Flat

Eurodollar Futures Trading Recommendations

**There is unlimited risk in trading futures.

April 30 - Our clients were recommended to sell the June Eurodollar near 98.045

· If you are uncomfortable with the possibility of a retest of the January highs, you can buy a June 99.00 call for about 13 tick to limit your risk on the trade to about $212 before transaction costs

· Keep in mind that this market isn't far from its all time high, if you are comfortable being short and are properly capitalized you may want to consider adding on if we see a sharp rally.

Carley Garner

Senior Analyst / Commodity Broker
DeCarley Trading

cgarner@DeCarleyTrading.com

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

www.CarleyGarnerTrading.com
www.DeCarleyTrading.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.

Perception vs. Reality

2009-05-11T13:09:35Z

The latest advance in stocks and commodities with the fall in treasuries and the US Dollar, could in fact be a precursor of what is to come but the pace of the advances and declines is flawed. These spectacular moves in such a short time are irrational and almost always not true. Stocks are moving higher as investors believe we will start to see a recovery in coming quarters and on hope that the worst is behind us. I'm not convinced on either front just yet. Commodities are rallying for the same reasoning and the fact that inflation may be around the corner. It is undeniable that this is a valid concern but perhaps premature. The move in treasuries is justifiable and for the US government to think they can get global investors to bail them out of this mess by issuing long term obligations and paying 3% is ludicrous. The US dollar is dead and will be considerably lower years from now. Day to day the volatility is unpredictable, however even Warren Buffet recently said 5-10 years from now the US dollar could be considerably lower. Markets tend to move irrationally and to extremes when fear and greed is present and this is never been more apparent across all asset classes. The investor that diversifies their portfolio and can differentiate between perception and reality will come ahead in the long run.

]]> Energies

June crude oil closed up $6.01 last week, the highest close in 4 months. What was resistance will now become support between 55.75 and 56.25 with resistance at 60.00. Oil has traded higher 11 of the last 14 days on good volume so it is safe to say this rally is real and most likely sustainable, albeit with periodic setbacks. June heating oil was higher by 14.33 cents. Resistance comes in at 1.5375, support is seen between 1.47 and 1.48. It is not unreasonable to expect a 50% retracement of the recent move taking prices to 1.3525. June RBOB blasted higher by 19.72 cents last week trading to its highest level since 11/4. Resistance comes in between 1.75 and 1.80 with support at 1.63 followed by 1.55. We have advised clients to exit their July and August 20 cent bull call spreads at a profit. We should get a setback being the last 2 weeks we saw a 25% advance.

June natural gas closed up 77 cents at its highest level in 5 weeks. Much of the move is attributed to an expected decline in US production and industrial usage coming back on line. Since bottoming on 4/30 prices have moved $1 higher or 33%. We advised clients to book partial profits on their longs and to tighten up stops. Perhaps one of my best trades ever (Sell August $3.25 puts & buy 6 September $8 calls) was bought for $150 and closed at $3,650. $3.25 should serve as the low; we see support at 3.90 with resistance at 4.50 in June.

Grains

As of last week the USDA said that 33% of the corn was planted, down from the five-year average of 50%. July corn was higher by 13 ¼ cents last week to its highest level since 1/26. Support comes in at 4.15 followed by 4.00 with resistance at 4.25 followed by 4.38. Based on the market, action traders are content being long rather than short into the USDA report as pre-report guesses have a lower ending stocks number due to strong demand and lower South American production. Longs have been in the driver seat but we expect a 30-40 cent correction starting this week and will have clients on the sidelines until this happens or we get a different read.

As of last week the USDA said that 6% of the soybean crop was planted, down from the five-year average of 11%. July soybeans were higher by 23 cents last week. Prices traded within a 40 cent range, we feel this sideways consolidation exhibited exhaustion. First support is seen at 10.90 but we anticipate a break to 10.60 and possibly 10.20. Resistance is seen at 11.20. We sold June $11 calls and have clients positioned in put spreads into the USDA report. We ought to see a correction lower being soybean acreage should come in greater than the previous report and even with a moderate drop in ending stocks the market has already priced in a significant increase in demand for US beans. On drier weather here and in South America perhaps the demand has been overestimated.

As of last week the USDA said that 23% of the spring wheat was planted, down from the five-year average of 59%. July CBOT wheat was higher by 27 cents to its highest level since 2/10. Resistance is seen at 6.05 with support at 5.84 followed by 5.65. July KCBOT wheat gained 24 cents and has traded higher 8 out of the last 9 sessions to the highest price since 1/30.We assume most of the recent upside was due to short covering, the market believes damage will surface and this has made shorts nervous. On Tuesday's report the endings stocks numbers should see little change and have no impact on prices.

Softs

July sugar was higher by 28 ticks last week taking prices to a 10 month high. 12 of the last 14 days sugar has traded higher, although preliminary we think an interim top was formed last Thursday. Thursday's high now becomes resistance at 15.60 with support down at 15.00. A 38.2% Fibonacci retracement takes prices back to 14.50, a 50% retracement to 14.17. We will be looking to be a buyer of March 10' calls on a setback.
July cocoa gained $195 as the inverse relationship to the dollar was displayed. This was the first close back above the 20 day moving average in 4 weeks. Support comes in between 2425 and 2440 with resistance at 2550 followed by 2600.

July orange juice jumped up 5.85 cents with parts of Florida suffering from drought conditions. After 4 failed attempts to get thru 92 cents last week we should see prices back off. Support is seen first at 88.50 followed by 85.50. Stand aside.

July coffee jumped up 6.40 cents, the highest close in twelve weeks, on talk that world demand may be holding steady in spite of weak economic conditions. We were able to exit the July 120 calls for clients at a profit. For now we would stand aside as our short term objectives have been met. Resistance comes in between 1.2750 with support at 1.25 followed by 1.22.

July cotton was higher by 2.85 cents last week gaining for the last 8 days. Cotton has been on a tear but at this juncture we think prices have gotten ahead of themselves being they have gained 65% in just 2 months. Recently we sold July 55 calls and bought twice as many December 65 calls for clients. The trade idea was on a correction in July look to capture the premium and then hold the December calls. We are currently making money on this trade but for the wrong reasons so we will attempt to cover the position this week at a 25% profit. The lesson here is if a market is not performing how you expected it would when you put on the trade then exit.

Not So Bad = Good

2009-05-08T23:01:55Z

The major stock indices found comfort in alleviating the uncertainty surrounding the stress tests and the employment report. Each event offered overall negative news but also eliminated many suspicions of disastrous scenarios.

With investors looking at a potential depression in the rear-view mirror, the market is approaching a major crossroads. It seems as though the market rallied prior to the streak of better than expected economic numbers and will likely turn over before expectations begin overshooting reality. On the other hand, we are in a scenario that has never been seen before. There is a significant amount of cash on the sidelines and if investors begin fearing that they are missing the boat, dollars could flood the markets for no apparent reason.

]]> At the moment, we still believe that the market will need to digest the rally if there are any hopes of sustaining gains in the long-run. We can't rule out a run to our noted 940 target, or maybe even 950 if the shorts are really squeezed, but the S&P should begin to struggle. Perhaps next week's option expiration will be the catalyst necessary to get the ball rolling for the bears.

In the last newsletter dated May 6th, we noted that we liked the idea of buying the May 875 put. We actually ended up getting filled on the 880 put near $5.50 and were lucky enough to exit near $10.75 on the dip yesterday. Yes, that's right I said lucky. I like to make it a rule that anytime an option is purchased and can be liquidated at double the entry price in the same session it should be exited.

Dow 9,000? Based on our weekly chart analysis it is possible, but we still feel as though a correction must occur in the near-term. We continue to believe that the Russell will fail to hold above 520 if it sees it. The NASDAQ is in need of a pullback, but it looks to be wanting to move back to 1440 before it happens.

If you are long futures, you should be tightening stops. If you are trading options, buying puts and/or selling calls is the way to go but you must be patient in regards to the entry! Bears must be willing to ride out the potential move to 940.

Please note: A mini S&P chart is used because it is better for charting purposes, but trade recommendations are based the full sized S&P unless otherwise noted.

S&P 500 Futures and Options Trading Recommendations

**There is unlimited risk in naked option selling and futures trading

Position Trade -

Flat

Please note: A mini-sized Dow chart is used because it is better for charting purposes, but trade recommendations are based the full sized Dow unless otherwise noted.

Russell Futures and Options Trading Recommendations

**There is unlimited risk in naked option selling and futures trading

Position Trade -

Flat

Please note: A mini-NASDAQ chart is used because it is better for charting purposes, trade recommendations will denote whether a mini or full sized contract should be used.

NASDAQ Futures and Options Trading Recommendations

**There is unlimited risk in naked option selling and futures trading

Position Trade -

Flat

Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading

cgarner@DeCarleyTrading.com

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

www.CarleyGarnerTrading.com
www.DeCarleyTrading.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.

Soybean Bulls Have Technical Strength, Momentum

2009-05-07T16:26:04Z

July soybean futures at the Chicago Board of Trade on Thursday hit a fresh seven-month high of $11.31 a bushel. Prices are also in a nine-week-old uptrend on the daily bar chart. The bulls have gained solid upside technical momentum recently, and are looking for more on the upside in the near term. The next upside price objective for the powerful soybean market bulls is to produce a close above solid chart resistance at $11.50 a bushel in July futures. Above that lies psychological resistance at $12.00 a bushel. With soybean prices climbing above $11.00 a bushel recently, it also signals to traders that daily price moves are likely to become larger--both on the upside and on the downside--as the price up-trend continues.

]]> click on the chart to enlarge

A close above $12.00 a bushel in July soybeans would also likely attract more speculative money to the soybean futures complex. It was less than a year ago that July soybeans hit a fresh all-time record high of $16.50 a bushel, on July 3. Solid technical support for July soybeans is located at the January high of $10.76 a bushel. A close below technical support at $10.50 a bushel in July soybeans would begin to deflate the bulls.

Stay tuned! Jim Wyckoff jim@jimwyckoff.com