If the dollar is moving south and the indices are moving north that is conducive for commodities to trend higher. Crude is above the trend line mentioned in yesterday’s blog higher by over 3% in today’s session. Not to mention a bullish engulfing candle on the daily chart so yes folks it looks like higher ground is in the future. Aggressive traders in futures should use $75.50 followed by $74.40 as support in August. A possible trade idea would be the October $80/85 call spread for $1700. Natural gas has lost ground for the last five days but $4.33 continues to support. Prices are starting to look over sold and we like purchasing 50 cent call spreads expecting a rebound in the coming weeks.
Indices domestically and abroad showed strength today rising 1.50-3% climbing to fresh highs. As of this post the S&P is above the 50 day MA and we’ve yet to get clients short. They are prepped and we expect to make a move this week or next; at the moment we are eyeing 75 point ES September put spreads and scaling short into futures for clients. We feel there is limited upside but an additional 3-4% is not out of the question.
We advised clients to take off more of their October sugar longs today thinking a correction may be in the immediate future. Sell a rally in cotton; we are selling above 77 for clients if given the opportunity. November lumber was higher by 3.20% today closing at $219; our target is $240-250. 30-yr bonds broke the 20 day MA trading down 0.70% as of this post. We’re anticipating a trade down to the 40 day MA at 124′16 unless the equity rally is derailed. Continue to buy dips in December live cattle.
August gold traded up to but failed to close above the 50 day MA. On a settlement above $1218 we would be interested in gaining long exposure for clients. September silver was higher by 1.72% now approaching the 50 day MA. Most clients have bullish exposure either via September futures or December call spreads.
Corn was a loser again today; we see support in December at $3.77 followed by $3.70.
We suggest using the current pullback to be a buyer of December contracts. The dollar down equated to other currencies moving higher at least today. Clients are positioned to take advantage of a move to .9200 in the Swissie and 1.2300 in the Euro in the coming days to 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.