Let the Trade Work 7/19/10

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If you do the necessary research before putting on a trade “let the trade work.” By that I mean with the current volatility it is easy to get shaken out of good trades but if your timing is less than perfect but the risk/reward is favorable, stay in the trade. Aggressive traders could buy Crude with stops below the recent lows or purchase October $5 bull call spreads. At the most in the short run we see a set back to $73-74 with the upside potential eyed at $79-80. A bullish flag and pennant formation may be forming in the daily natural gas chart…time will tell. Clients have been advised to buy October 50 cent call spreads. The down sloping trend line that was breached last week in the indices capped the rally today. We will continue to sell rallies and have advised clients to purchase September puts. We expect to see 1015 in the S&P and 9700 in the Dow in the coming weeks. The trader that took delivery in the cocoa market may have had second thoughts today after the 5.81% decline. September futures closed back below the 100 day MA and we think there could be more downside to come. On a set back that holds 2800, we may have some long ideas…stay tuned. We suggest using any positive action to book profits on remaining sugar longs as we feel prices have gotten ahead of themselves. We would use a 3-4% rally in December cotton as a selling opportunity. If Treasuries are unable to rally in the coming days aggressive traders could get short 30-yr bonds and/or 10-yr notes with tight stops. Some of our clients profit orders were hit on their December cattle today; others have gtc orders working and need a slightly higher trade. Gold will close lower on the day but the 100 day MA did hold at least today. Aggressive traders could buy with stops below that level; in August at $1178. September silver lost 1% today trading to a six week low. We see support in September at the 50% Fibonacci level at $17.30 followed by the 61.8% at $16.75. Aggressive traders could buy dips but recognize you’re catching a falling knife. The pullback we forecast in Agriculture commenced today; while we expect more downside in the short run we suggest using the setback in corn, soybeans, and soy meal as a buying opportunity. We’re undecided in wheat at the moment but should have some trade ideas in the coming sessions. Clients remain positioned short the Euro via options and the Swissie via futures and options. As we’ve said in previous blogs our targets are 1.2450 and .9200 respectively.
Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results. MB Wealth Corp. is not responsible and does not endorse anything outside of the content of this article authored by Matthew Bradbard; President of MB Wealth. Benzinga Recommends that you take a look at the iShares COMEX Gold Trust IAU. The IAU is the ETF that tracks gold. The iShares COMEX Gold Trust is down .75% in today's session.
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Posted In: ForexTrading IdeasETFs
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