Where Does the $$ Go 9/9/10
Money appears to be leaving Treasuries, energies and metals…where does the money go?
Crude traded above but failed to settle above the down sloping trend line mentioned in yesterday’s blog. Coincidence or not today’s high also come in around the 38.2% Fibonacci retracement level. We’re suggesting light long exposure looking for prices to inch higher in the coming weeks. Like a coiled spring for the last 11 sessions natural gas has been in a 25 cent trading range. We’re suggesting buying November futures and November call spreads. Do not buy a big position but rather add to your position if and when the market proves you right.
The 200 day MA has capped recent rallies in the S&P. Yesterday some clients started to gain November put option exposure. If prices roll over we will be looking to get short futures with clients but not just yet.
We started to buy December cocoa call options today for clients; our target is 2885. Sugar is fast approaching its 2010 high just 1.5% from today’s settlement. The bad news is some clients are short in March 2011 options, the good news they are not in futures. On continued weakness tomorrow we may start to gain bearish exposure in December coffee for clients. November lumber has gained 8.5% in the last 2 sessions lifting prices to four month highs.
Treasuries crept lower today with 10-yr notes and 30-yr bonds reaching 3 week lows. Clients will likely try to sell rallies. We may have left this trade too early but we did not want to have clients short Treasuries and the stock market at the same time.
We still like the idea of fading rallies in December live cattle with a target of 96 cents. We expect a correction in gold and silver…NO that does not mean get short rather buy the dip. Our initial targets in December gold are $1213 and in December silver a trade below $19. Corn gained nearly 2% today with funds doing some heavy buying ahead of tomorrow’s USDA report. After the dust settles tomorrow we may have some fresh ideas but going into the report we’re mildly bullish corn, mildly bearish soybeans and neutral wheat.
Still no clue in currencies so stand clear until next week.
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.
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