Will you be my Valentine?

An early rally failed in Crude today taking prices lower. We advised clients to roll out of May and go out until July. We recommended liquidating bullish positions in options and futures and give yourself two more months of time. Our recommended play is purchasing July $5 bull call spreads. Aggressive clients started to buy May natural gas today; they bought 50 cent call spreads but once an interim bottom is in they will start scaling long into futures…stay tuned.

A fresh new high in indices?? A correction is long overdue but all my bearish plays for clients have gotten hammered…thank g-d they’re small allocations and only in options. The green back should see a little more upside but the easy money has been made on longs and likewise shorts in other crosses. We advised clients to take off their bearish plays in the Euro today. We advised clients to lock in profits on their longs in live cattle at the advice of a seasoned cattle trader. We will be eager to buy back June contracts on any set back as we feel new contract highs are likely…stay tuned.

We took the remaining profits on silver longs today with clients thinking we could see a 3-5% break in the coming sessions. We will re-establish longs ideally from lower levels but on a trade above $31 we would be willing to get long from higher levels than our exit…as is trading. This would likely signify a leg higher so we would be OK buying high and likely selling higher. As for gold the 100 day MA continues to cap rallies…trade accordingly; that level is $1366 in April. Cotton appears to be rolling over…it has been our recommendation for several weeks to fade rallies here…continue to do so. Coffee was higher by 2.5% today…this is against our clients as we’ve been establishing bearish positions in July options. For now stay the course.

In agriculture today we advised clients to exit their longs in corn and to get short May soybean oil. We did so with futures and options and are targeting a break back near 55.50/56.00. We hinted at getting long Treasuries last week and today we started initiating NOB spreads; buying 30-yr bonds against a sale in 10-yr notes. We’re anticipating a 2.5-3.5% appreciation in the price of 30-yr bonds in the coming weeks…trade accordingly.

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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