Good Bye 2011 12/21/11

With 2011 winding down this will be my last commodity wrap up as I am closing my office until 2012. Happy holidays to all! Crude picked up 1.7% today closing back above its 18 day MA. Traders should be buying dips that hold $95 as it looks like this leg could lift prices back near $103. At this point we feel there is more upside risk though we do not expect a major acceleration into yearend..our bias is positive but keep size small as light volume into yearend could increase the volatility. Natural gas has advanced now for two days and a leap above the 9 day MA at $3.23 in February would be the first sign of an interim bottom. This contract has not managed to close above that MA since prices broke down from $3.60 three weeks ago. Equities were virtually unchanged closing in the middle of a fairly wide trading range. As long as the 9 day MA supports we could see a chop higher to finish the year. Those levels are 1220 in the S&P and 11900 in the Dow…trade accordingly. $1570-1670 should contain February gold as we have advised clients to look for long entries at lower levels in early 2012. Silver remains a coin toss in our opinion as well but previous range estimates are the same $28.50-31 is my opinion. We've given clients the same advice…look to be a buyer at lower levels come 2012. The dollar index remains over bought though it found mild support today. We favor a grind lower with a target of 78.50 in the March contract. We see limited upside on other crosses so tighten stops if long and work the market. Over night the Pound and Euro spiked but the fact that they could not hold onto their gains is not supportive. Cocoa appreciated 2.7% today lifting prices back near their weekly highs. On a breakout above 2300 in March expect 2400 shortly thereafter. 10-yr notes and 30-yr bonds failed again today trading down to their respective 20 day MA's. On a trade through that pivot point we'd be confident an interim top was in and add to any open shorts. Assuming that plays out 139'00 would be our target in 30-yr bonds and 128'00 in 10-yr notes…trade accordingly. Traders with a longer perspective should remain in bearish trade in 2013 Euro-dollars with stops above the recent highs. Risk to reward this one is a gem! For the last four days corn and wheat have closed higher and soybeans have gained four out of the last five sessions. This appears to be a tradable bottom so get light bullish exposure and play the bounce. Pick your poison but from here in my opinion you could get 50 cents of upside on the aforementioned grains. My opinion…lean hogs are building a base so continue to accumulate bullish exposure in February and add on a settlement above 86.00 cents. Risk disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.