Recently in metals Category

This phrase is coined for the college basketball tournament but I think it is an accurate description of what to expect as a trader this month. At its highs today oil was less than $3/barrel from making new highs on the year. Being bearish for the last 1-2 weeks has made our clients NO $ but we still feel a trade to $75/76 is imminent. We are not disputing a trade in summer is likely up to $90 but first a correction. We still favor $5 put spreads. Natural gas should finish down 3.5-4.0% lower on the week. That is not too bad! Clients have a small long position in April futures and June call spreads and at the moment are all under water. We expect the next 2 weeks to be better to us in energies; that means crude down and natural gas up. Are you kidding me that we only lost 36,000 jobs and unemployment did not change?

The equity market is being propped up by the powers that be and if the free market determined prices we would be at least 10% lower. Clients are down on their June ES puts but will stay the course being they have over 3 months time. Sugar closed up 2.4%; we suggest being long May and July via options looking for a move back to 26 cents. For the first time in 4 weeks cotton will finish lower; clients are positioned to take advantage of a set back to 75/76 cents in May. Treasuries were hit hard today and we do think more downside is likely in the coming months but we still feel one will get the opportunity to put on shorts from higher levels. If the recovery is underway which I question and there is more talk of the Fed raising rates traders should re-visit the idea of short Euro-dollars. The charts look like in the next few sessions Agriculture will trade lower. Aggressive traders could use that to get short while I would prefer getting long from lower levels.

USDA report out next Wednesday. Our current positions for clients in Ag include long corn, long soybean meal and short soybean oil. We have no positions in lean hogs with clients but it appears a double top could be forming around 74 in the April contract; that level acted as stiff resistance in mid-January as well. Live cattle finished about 1 penny higher on the week; clients remain short expecting a trade back near 89 cents in April. We caution any exposure in gold as we could see a $50 move either way. If lower we would suggest buying the dip. May silver closed at the 100 day moving average today about 15 cents off its highs. We like being long but would prefer to open fresh longs on a set back to $16.50. If we do see a retracement that holds we would think the next leg up would lift prices to near $18.50 mid-summer. Clients were advised to take profits on their Yen shorts today as prices have peeled off 3 cents in the last 2 sessions. We advised those still interested in currencies to get short the Loonie. We are looking for a move in the Loonie back under 95 cents. We are operating under the influence that stiff resistance comes in at .9750/.9800.

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

Thus far this week the volatility has continued in the precious metals markets. We have traded a $24.70 range in Gold as investors continue to watch and speculate as Greece's fiscal crisis continues to fuel the precious metals markets. European Central Bank President Jean-Claude Trichet has advised Greece to take more aggressive fiscal measures saving $4.8 Billion Euros prior to pledging support to Greece from the European Union. This scenario has sent mixed signals to traders. Many traders are speculating that a bail-out will strengthen the Euro ratio versus the U.S Dollar and therefore raising the appeal for Gold. While others believe that Greece is only the beginning to future European bail-outs. Portugal, Spain, and Ireland are struggling with their own fiscal responsibilities. This scenario would pressure the Euro and make
the U.S Dollar more appealing.

**UNEMPLOYMENT** 3/5 Friday 7:30 am (CST)

Good news on the Jobless Claims front as the U.S Department of Labor reported that initial Jobless applications fell by 29,000.

This week has been a very technical trade as the both Gold and Silver have ranged in
between key support and resistance levels The appeal for gold appears to be growing
as speculators are buying physical Gold as a "safe haven "investment and a hedge to
the uncertainty of the globes economy. Many investors are taking their cues from
the Asian sector as they have been buying physical Gold during price dips.

I believe many traders were on the side-lines this week as gold approached over-bought
levels as the U.S Dollar fell against the Euro. It is my belief that traders are concerned about the top heavy Gold going into the Friday UNEMPLOYMENT number.

The volatility in the precious metals will continue as the European Union charts its course. I am of the opinion this will drag on....

Trade Smart...

Mike Daly / Gold Specialist
PFG BEST
mdaly@pfgbest.com
877-294-4669
312-775-3014
312-563-8029

*there is Extreme risk trading futures, options and forex*

Crude was down just over 1% today closing almost $2 off its highs. We continue to suggest selling near $80/barrel expecting a trade near $75 in the coming weeks. We suggest on futures to have stops above $81, in options clients own May $75/70 put spreads. Natural gas was lower by almost 3% and though we are playing with fire we still like lightly buying April futures; buy 1/4 to 1/3 of the ultimate position you want to own and then add to it when the market confirms you are right. As for option traders we suggest purchasing the June $5/5.50 call spreads.

We remain unconvinced a trade higher in Indices can hold and have advised clients to sell into this strength. We suggest scaling into shorts in the S&P at 1111 and 1125. Clients own June 1050 and 1000 ES puts and are slightly under water. We advised clients to buy back the remainder of their 30 cent sugar calls today. They booked a profit on their short 30's and know hold May 25 cent calls and need a rally. The 200 day moving average held today in May at 21.92. Prices are oversold and have remained above the 200 day since April of 2009 when prices were under 15 cents/lb. Cotton was higher today but did mange to close 1.30 cents off its highs. Clients are positioned to take advantage of a break back below 75 cents this month. Bearish engulfing candles formed in the daily corn and wheat charts so a trade lower in the short term is likely.

Those that have yet to get in corn we suggest using this set back to get on board. 5 days running live cattle have closed lower; we may get a brief rally but sell it as a trade to 89.00 cents is what we are predicting in the April contract. I am confused in the metals; prices could go either way. We have clients lightly long both gold and silver but would be quick to exit on a close below $1106 in April gold and below $16.08 in May silver. For new entries we suggest trading light! The currency market is absolutely madness as 1-2% daily swings are common place in a variety of crosses. We continue to think the dollar is topping and as long as the Euro-currency can hold the recent lows we think a moderate bounce is likely; 1.38/1.39. The Pound remains the dog and should be sold on rallies but only for traders with a high tolerance for risk.

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

For the last trading day to be on the 26th of the month just doesn't seem right. Needless to say based on the market action today there seemed to be some month end window dressing, It will be interesting how we start the month of March next Monday. Oil remained range bound ending the week near the top of the recent range. We are still advising being a seller near $80 and expect a trade near $75 in the coming weeks. Clients own May $75/70 put spreads; as a side-note they do not need to go intrinsic to make money unless they chose to hold until expiration. As promised we advised clients to start buying April natural gas futures today; filled around $4.80. We are looking for a move of 50-75 cents higher in the next 30/45 days.

We maintain that indices are a sell rallies market and expect to see a trade less than 1000 in the S&P by Memorial Day. Clients are sellers on futures at 1111 and 1125 and are positioned in June puts. May sugar closed on the trend line that has held since last June. We are cautiously optimistic and have clients positioned in May calls looking for a trade back to 26 cents. Cotton was higher again today; gaining almost 3 1/2 cents or 4.3% on the week. We expect prices to make their way back below 75 cents on the May contract in the month of March. 30-yr bonds quietly gained almost 3 handles this week and no ones is paying attention. That leads me to believe there is more upside; clients are not advised to partake in the upside but will be eager to sell from higher ground.

A portion of your commodity portfolio should be in grains more specifically corn if it is not already. May corn closed at a 6 week high today and looking at the weekly chart this could just be the beginning. Take a look and draw your own conclusion. Live cattle were down on the week but higher on the day. We have clients positioned short futures and long puts to take advantage of a lower trade. May silver traded up to major resistance near $16.50 today; next week will tell the story if we can get thru those levels. On a close above $16.50 we should see a trade back above $17/ounce, perhaps as high as $17.50 before any major resistance. April gold is above both the 50 and 100 day moving average but we still need a settlement over $1128 to confirm the downside is done. The dollar traded below the 20 day moving average but until we get a close below expect sideways action; that level is 80.25 on the March contract. The waters are murky in terms of other currencies; clients only have light longs in the Euro via April options expecting 1.39 next week.

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

Economic Woes Continue...

This week thus far we have traded a $43.00 range in the Comex Gold Market. This range has been primarily due to the U.S Dollars performance versus the the struggling European Union and the Euro. It has become apparent the situation in Europe is much worse than previously reported. It is my opinion that investors are looking to get away from the day to day speculation ratio between the Dollar and the Euro and are seeing safer havens. (precious metals).

So far this week has revealed more bad news regarding the U.S Economy.

Consumer Confidence has dropped to its lowest level since April 2009... This certainly indicates a lack of confidence by the American consumer as the are convinced the economy will be slow to rebound.

*New Home Sales Dropped 11%....

*Projections show 3 Million Homes will be reach foreclosure in 2010.

*The U.S Labor Department reported that Initial Jobless Claims rose by 22,000...
(496,000)...MUCH WORSE than expected. Economists were expecting a decline... (460,000)

*A Gallup - Poll reported 19.9% (30 Million) of American workers are UNDER employed

*FOMC Chairman Ben Bernanke has stated that KEY U.S Interest Rates will remain low...

The Precious metals have been supported through strong physical demand throughout the Asian sector as they are buying the price dips ...deeming it as "Bargain Hunting"...

The Chinese recently stated they were NOT interested in buying the remaining IMF Gold at these levels.....Are these the same Chinese who have boasted to the world that they will take their current 1500 metric tons status up to the10, 000 metric ton level in 10 years?

The Chinese posses a lot of U.S Dollars! They are using television promotions to educate their citizens to purchase Gold and Silver as a hedge against pending Inflation to help protect their new found wealth....The Peoples Bank of China has raised rates twice this month...stating they were not going to continue being the lending source for the Globe. A good poker player never tips their hand!!!

These precious metals are resilient !!!

Mike Daly / Gold Specialist
PFG BEST
mdaly@pfgbest.com
877-294-4669
312-775-3014
312-563-8029

*There is Extreme risk trading futures, options, and forex*

These markets seem to change minute to minute...hour to hour...day to day. The 40 day moving average that we quoted yesterday was re-visited today and held in oil. Being that we did not make a new high we are still operating under the impression that prices need to move lower before we get any substantial upside. We would expect on a breach of $78 in April to see a trade down to $75/75.50. Clients are currently not long or short oil and are looking to buy on a dip. We did not move on natural gas futures today though we expect to be a buyer before the weekend. Instead this week those wanting exposure we are advising June $5/5.50 call spreads.

For the last 4 sessions stocks have been range bound between the 50 day and 100 day moving averages. We expect for prices to turn south and have positioned clients to take advantage of such a move. A close below 1090 in the S&P should signal a trade back to 1050. Sugar gained 3% today closing back above the 100 day moving average. As long as yesterdays low holds in the May contract at 23.49 we like being long. Unfortunately we did not get filled this morning buying back the 30 cent leg. Clients are still taking advantage of the upside but we would like to buy back that leg in the coming sessions.

July cotton was lower by almost 1% today; clients are positioned short expecting a trade back near 75 cents. We do not think Treasuries have moved high enough to sell but a trade closer to 118′00 in June a sale of 30-yr bonds should be on your radar. Agriculture recouped yesterday's losses; the standouts were corn gaining 2%, soy meal 1.9% and wheat 1.6%. We continue to feel being long corn via options and futures heading into the next USDA report on March12th makes sense. Live cattle were lower for the second day in a row closing 1.7% off their 2010 highs from last week. Clients are positioned in options and futures to take advantage of a trade down to 89.00 in April.

A move above the 200 day moving average was rejected today in March silver. Prices could go either way; use $16 as resistance and $15.50 as support to help you navigate these treacherous waters. A close below $1100 today in April gold means we should see at least an attempt at lower ground; support is seen at $1080 followed by $1065. We still cannot rule out a trade back to $1045; a level seen just 2 weeks ago. We are not establishing new longs at this point but are holding August $1150/1250 call spreads and are slightly under water for clients. As to not miss a move higher in the Euro-currency in case we get one which we do think is long over due, we lightly bought April 140 calls today for clients for $762.50/per. On a move to 140 in the next 1/2 weeks these should be worth $1350-1500/per. We are not comfortable with futures being if things unravel in Europe a trade to 1.33 could happen. Worse case these options can go worthless; and again clients have a very small position.

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

So far this week the precious metals have shown extreme resiliency as economic news
globally has tested the patience of the most disciplined traders. The recent global economic data has analysts divide and therefore the markets are seeking an indicator and a direction.

Much of the news this week has been the European Unions dilemma in regards to Greece. It has become apparent that Greece's debt crisis was much worse than originally thought. The Greek budget deficit has affected everything from European Stock Markets, Central banks and certainly devaluing the Euro versus the Dollar. Despite a weaker Euro I believe that global Investors are tired of the fiat currencies
Non stop woes and are flocking to Gold and Silver as a flight to a "safer haven". There is certainly proof there has been a jump in physical demand lately.

The U.S Economy took another punch to the stomach as the U.S Labor Department announced that initial Jobless Claims rose by 31,000....(473,000) This should be priority one!!!!!

Also the IMF announced it would be selling its remaining 191.3 tons of Gold. This pressured the Gold and Silver markets early. I believe investors thought the selling of this massive amount would over whelm the existing demand. But as we have seen over and over the Asian sector has bought every price dip and considers it to be bargain hunting....

We also know the Chinese look to boost their gold Reserves to 10,000 metric tons over the next decade. The remaining IMF Gold would be a good start to that achievement...I believe if a Central Bank purchases any or all of the IMF Gold it will signal a Bull RUN
similar to rally after the central Bank of India purchased 200metric tons. 4 months ago.(rallied almost $180.00)..... The resiliency of the precious metals is real...

Feel free to call...Lets talk Gold !!!

Mike Daly / Gold Specialist
PFG BEST
mdaly@pfgbest.com
877-294-4669
312-563-8029
312-775-3014

*there is extreme risk trading futures, options, and forex*

We wanted confirmation before taking a stance in crude and with prices convincingly higher today we are thinking the recent shake out may be all the bears get. Today's move carried prices back above the 200 day moving average and at the highs we traded to the 40 day moving average. As long as April can hold above $76 on a closing basis we suggest light long exposure via futures in April or call spreads in June. We've yet to make a move for clients but the June $80/85 is a spread we may be interested in; today the price is $2000...stay tuned. RBOB was higher by 3% today; clients are long June expecting a trade to $2.15/2.20. We are interested in buying May natural gas for clients on a further correction. A trade closer to $5 most likely gets them in the trade.

Indices are back above the 100 day moving average as of the settlement today. As suggested in our commentary this morning we would use the current rally to trade out of longs, establish hedges or for the speculator to get short. Clients started buying June ES 1000 puts today for $1450/per. Softs were higher across the board; on a settlement above 27.30 in May sugar we suggest being long, clients are positioned long May coffee expecting a trade back over $1.40. Similar to the softs Ag's were well bid today; corn, wheat and soybeans were higher by 1.50-3.80%. Aggressive traders should buys dips in May soybeans though we prefer long exposure in May or July soy meal and bullish exposure in May, July and December corn. From these levels we anticipate a move of 15% plus in corn futures...trade accordingly. Cattle were not immune to the bullish sentiment commodity wide today with live cattle gaining 1.50%. The spread was virtually unchanged but clients long April puts lost some value today. We would not deviate from the original strategy and still expect prices to fade in the near future.

Perhaps the most active sector was metals; gold higher by 2.80%, silver by 4.50%, copper 4.50% higher and even palladium and platinum joined the party gaining 3.70% and 2.0% respectively. Silver regained the 200 day moving average, we see this leg carrying prices at least $1 higher maybe $2. We would re-evaluate our positions on a trade back above $18/ounce. April gold had the first close back above the 50 day moving as we suggested in recent blogs and commentaries. Ideally we would get confirmation tomorrow and then we will advise prices for futures entries. As for option plays clients were advised to buy August $1150/1250 call spreads today; paid $2850/per. The US dollar got hit today taking prices back to the 31 day MA; use 79.50 in the March contract as your pivot point. We expect more upside in the next few session in the Cable and will look at selling futures around 1.5950/1.6000 for clients. The Euro-Yen spread picked up $2239/per today. Another day like this and clients will be showing a profit on this trade.

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