A Straight Line

Nothing included markets move in a straight line…stocks will not move higher in a straight line nor will natural gas move lower…all things must come to an end. I am still in a holding pattern waiting for direction in Crude oil. We’re still experiencing a tug of war in the distillates as RBOB was lower today and heating oil was higher…the reverse of previous sessions. Natural gas was lower by 7% today making it 21% already in 2012..a rocky start! The reality is I still do not see signs of a bottom. Equities continued their climb with the S&P exceeding our target of 1300 and the Dow within 100 points of our target…see previous posts. The 9 day MA should continue to support and as long as prices hold above that level I remain friendly.
Gold is having trouble getting above the 38.2% Fibonacci retracement level at $1663 in February. I still see $1676; the 50 day MA but much more than that is not likely in my opinion on this leg…trade accordingly. Silver bulls are running on fumes as well…I am not advocating a bearish trade yet but start looking for an exit door on longs. The dollar index broke the 31 day EMA, a level that has supported since mid-November…could the tides be shifting? The Euro and Swiss franc are above the 20 day MA and the Pound is on the verge of penetrating that level…all starting to look more friendly. From where I stand the commodity currencies look the weakest along with the Yen and European currencies appear to be a buy. Trade small as the forex market has been manic of late.
Cocoa is back above the 50 day MA…aggressive traders can work back into longs with stops below the recent lows. Sugar #11 could be bought with stops below the 50 day MA as well. Treasuries appear to be rolling over but my clients have been fooled too many times so we will remain on the sidelines…forced into the market I would be a seller. Grains were higher by 1-2.25% today though I remain on the sidelines still to see if we get a test of the December lows. Next week if we have not I may be a buyer of wheat and or corn for clients…stay tuned. Live cattle and lean hogs remain a long proposition until prices breach the 20 day MA on the downside.
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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