Cinco de Mayo

In the last three sessions Crude has come down $7 in June futures. Prices have retraced over 50% from their February low and April high but we do not think sellers are done. At this moment we are expecting $76-78. Clients are neither long nor short at the moment. The near 10% correction in the last two days in heating oil and RBOB may be the beginning of a trend change so bears get ready and bulls we suggest using rallies to exit any remaining longs. We continue to suggest light longs in June futures in natural gas as long as the recent lows hold. Clients were filled on their September 50 cent calls spreads they’ve been trying to buy in recent sessions. We expect within that time frame if not sooner to see prices trade back above $5.
Day two of the correction in indices with prices below the 50 day MA as of this post. On further downside our objectives are as follows: 1135 in the S&P, 1890 in the NASDAQ and 10600 in the Dow. Sugar has been lower 11 out of the last 12 sessions but prices are oversold enough that we’ve started to track pricing in October 10′ calls and March 11′ calls. Contact us for exact pricing. Though we were lower on the session July closed over 1/2 cent off its low. Assuming we get a bottom around these levels our long objective would be around 19 cents. Clients attempted to get short some October cotton today and just missed their limit; we will try again tomorrow.
We may have a triple top in the making in June 30-yr bonds…this should be on your radar. We could have bearish option suggestions for September contracts in the coming sessions. Corn continues to be a buy on dips market. Our suggestion remains to be long July via options and December via futures. Hold off buying soybeans and soy meal until we see lower ground. June lean hogs closed down 2.36% today and on a penetration of the 20 day MA just below 84.00 expect 81.00. Gold was able to close positive on the day after trading to a one week low in early dealings. We are not advising shorts but have refrained from getting clients long as of yet thinking there is more downside to come. We would start to be interested closer to $1135 in June but still cannot rule out $1100…yes you heard $1100. July silver traded below the 100 day MA for the first time since late March having lost 7% in the last two sessions. We see support at $17, $16.85 and then $16.40.
This market can be unforgiving so tread lightly. We’ve yet to re-establish longs but most likely will this week or next…stay tuned. Copper traded well below the 200 day MA but did manage a 13 1/2 bounce to close just above that level. We suggest tightening up stops on shorts as we may get a bounce from here. Never again will I trade copper options; the bid/ask today was $1000 wide. This market is BROKEN. The dollar picked up nearly another 1% today trading to new highs, as long as this continues look for more downside in other crosses. Clients remain short the Loonie and will look for an exit door near .9550-.9600.
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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