September 8th 9/8/10
September 8th is a big day, 2010 Rosh Hashanah; the Jewish New Year and the first official trade day of Galico Capital (Bradbard’s new CTA).
Crude traded well above the 20 day MA but failed to settle above that level; in October at $74.60. We suggest light long exposure anticipating a trade above the down sloping trend line in the coming sessions. If so we would anticipate a quick gain of $3-4. The distillates; heating oil and RBOB also look like an interim bottom has formed and we should be trading higher from here.
Continue to scale into November natural gas future and to purchase November call spreads. We’re anticipating a 50-75 cent appreciation in the coming 30-45 days…trade accordingly. Clients were advised to initiate their first short leg today in the S&P; we’ve yet to get short futures but did start legging into bearish put spreads. Some clients bought November 1100/1000 1:2 put spreads paying$550/premium plus fees.
We will likely be trying to get long December cocoa with clients tomorrow…stay tuned. We’re still advising clients to position themselves in March 2011 put options in sugar thinking a 10% correction is around the bend. Intra-day lumber traded up limit; some clients still are holding a small position long November. We feel a trade to $250 could happen in the coming weeks.
We advised clients in 10-yr note put spreads to offset their positions at a small profit moving to the sidelines. On a rally we will likely be getting clients short again. December live cattle rallied back up the 20 day MA, what was support now has become resistance. We are suggesting getting short December futures and selling out of the money puts to smooth the ride…contact us for clarification. Our target in December is 96 cents.
Both gold and silver look for ripe for a correction; clients own NO gold and have lightened up on their silver. Short term traders look elsewhere but long term traders should buy a dip. A 50% Fibonacci retracement in December silver drags prices back below $19/ounce.
We advised clients to lighten up on their December 2010 corn in recent sessions as we want to book a profit ahead of Friday’s USDA report. Our suggestion would be to buy a dip in either December 2010 or December 2011 contracts. In a perfect world that is 30 cents lower. Yes yields have been revised down but that is likely already factored into the market; buy the rumor sell the fact. Wheat gave up 3.4% today it looks like prices in December CBOT and KCBOT wheat will see a trade back below $7/bushel. We will be waiting till after the USDA report to establish new wheat positions for clients.
Nothing new to report in forex; our suggestion is stand aside.
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 iPath DJ-UBS Sugar TR Sub-Idx ETN (NYSE: SGG). The SGG is an ETF that tracks sugar. The iPath DJ-UBS Sugar TR Sub-Idx ETN was down .30% in today's session.
