Anti-Climatic Trading Session

No movement was truly notable to report with muted action commodity wide. Inside day in Crude with mixed signals as prices were unable to make a new high but we did hold the 9 day MA so tomorrow the market should make a decision based on the inventory report. We suspect a trade over $88 signals a return to $92 while a trade under $84.75 signals a visit back to the lower $80′s. We favor the move higher and have advised clients to have bullish exposure in October or November contracts. Natural gas lost just over 2% today returning to near the lows from one week ago. Under $4 remains a buy as we do not suspect prices will be at these depressed levels for much longer.

Stocks stalled today failing to make headway for the first time in four sessions. We’re expecting an additional 3-5% push higher from current levels…trade accordingly. Gold picked up 1.75% today recouping most of the previous week’s losses…you cannot hold a good thing down apparently. I don’t trust gold at these levels as we will patiently wait for a break or miss a further acceleration. Silver gained for the third consecutive session trading back above $40/ounce. We got a buy signal but failed to act with clients as we view the risks too great. That being said a close above $40 should signal a trade back near at least $42 this week or next.

The Swissie remains a sell and the Loonie a buy in the currency complex. Cocoa was added to our buy list to join cotton and OJ in the softs sector. Cotton penetrated the trend line that has capped rallies for the last three months. On follow through we see little resistance for an additional 5-7%. Corn picked up 1% today lifting prices to contract highs but we’re suggesting using this strength to establish bearish positions to capitalize on a trade lower in the immediate future. Live stock remains a wildcard so we’ve opted to wait for further signals in live cattle and lean hogs before issuing any trade recommendations.

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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