Goldman Sachs is already a household name but the action and regulation from the Fraud accusations today will effect main street and wall street so investors need to be on point. Crude was down by nearly 3% today but the same trend line that held two weeks ago is still in place. As we said yesterday on a breach of $84 on a closing basis in June we suspect more weakness but until that the trend remains up. Natural gas was slightly higher but what I take away is with outside market weakness we remained positive. That speaks volumes about market sentiment. We are suggesting June futures and July call spreads with stops below the recent lows for clients.
Indices were hit but today is far from a victory for bears but just maybe this is the catalyst needed to get these markets back to reality. Assuming an interim top was made this week our targets would be as follows: S&P 1140, Dow 10600, NASDAQ 1900. Sugar prices were lower by 5% today; clients legged out of their May/October spreads. They were advised to book a profit on October shorts and put in stops 10-15 ticks below today’s low in May. On a move higher they will trail stops; if they are stopped out the net result of the trade will be a loss of approx. $550/per. We advised clients to put in gtc profit orders on their July OJ; a trade 3-5 cents higher in the futures should get them their price. Treasuries are back above their short term MA’s; as we previously stated a short entry over 118′00 is on our radar.
New highs were made in Euro-dollars; shorts should have been stopped at a small loss. We will look to re-establish shorts with clients again most likely from higher levels. With outside markets being so weak I was impressed with the action in grains today. Wheat corn and soybeans finished near their weekly highs. Longs in corn made some headway this week but being we are gone next week and we could see a pullback on good weather we advised clients with long December futures to sell May 1:1 as a hedge.
When we get back into the office we will examine selling lean hogs and live cattle for clients but for now I would stay away. The correction we’ve been calling for in metals is underway with silver 70 cents lower nearly 4%, gold down $23, and copper just over 2%. We expect there to be more downside and have an objective of $16.25/16.65 in May silver and $1095/1105 in June gold. If the dollar trades up we would suggest selling the Pound; we advised clients to buy June 1.50 puts today. The Loonie closed below the 20 day MA today for the first time 3 weeks. If metals and energies move lower we could see a trade back near .9500 in June.
Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.
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