Trade off the Indices

To me virtually everything is trading of the indices so look to the equity market for guidance and positioning. Crude was higher but I’m not convinced the damage is done just yet. If the 9 day crosses the 20 day which would mean prices would be $1 higher in futures I will likely get clients positioned long again. Much of tomorrows action will depend on the inventory report…stay tuned. We suggest backing off on the distillates until Crude oil picks a direction. Natural gas failed to get thru $5 today closing down 2.30%. At this point we’re feeling a correction back to $4.40-4.60 should be bought.
We will have specifics in August and September contracts if we do get that retracement. The fact that indices made a new low and failed to follow thru we should get a bounce from here…a dead cat bounce. We would start to explore shorts in the S&P above 1180 but if lucky we may get an opportunity to be a seller back above 1100 for clients. IF the equity market for whatever reason stabilizes and trades higher that should bode well for some of the beaten down commodities…stay alert.
Sugar was higher by 3.84% today closing in on 15 cents. Clients remain long October expecting another 7-13%.Futures traders are advise. The dollar looks heavy but we would need to see confirmation to add any additional exposure for clients. As it stands now some of our clients are long the Aussie and the fact that .8100 held today they have chance of seeing a trade back to .8500-.8700 in the coming weeks. The Swissie looks like a buy as well; aggressive traders should get long with stops under .8575. A 38.2% Fibonacci retracement would lift prices to .8940.
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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