Nothing notable to report as most trade was two sided . For the first session in four Crude oil traded positive closing marginally higher just above the 9 day MA. At these levels we feel Crude is too high as we are still positioned with some aggressive clients short expecting a trade lower. We will remain bearish unless we see a settlement above $95/barrel in December. Natural gas prices remain near their contract lows and seasonals support lower ground. We prefer being a buyer once prices breach the trend line but historically speaking we may see weakness for two more weeks. Past performance is not indicative of future results.
Inside day in securities as stocks failed to react to new developments out of Europe and the FOMC meeting was a non-event. Once equities get through yesterday’s lows we would anticipate an additional 3-5% downside follow through…trade accordingly. As of this post gold is higher by 1.5% just below the 50% Fibonacci level . We are on the sidelines but believe we can see another probe closer to $1650 for a long entry. Silver picked up 4.4% but was unable to re-take the 40 day MA. If $35 caps upside over the next few days look for prices to trade back closer to $30 in the coming weeks.
The dollar paused today but we would expect further upside here to pressure other crosses. Clients remain in their bearish Yen trades expecting more downside in the days to come. A trade back to Monday’s lows should be viewed as an exit point. Continue to sell rallies in sugar and coffee. Corn lost 1.4% on crop forecasts as aggressive traders could get short with stops above the recent highs. Risk to reward in March traders could risk 20 cents and have a profit objective of 40-50 cents. February is a buy on dips. Or as an alternative traders could get long futures and sell out of the money calls 1:1.
Risk disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.