Investors Reloading 12/2/10
With the recent sell off in the US dollar and Treasuries it appears investors are putting risk assets back to work in securities and commodities. A further 1.4% appreciation today with prices in Crude fast approaching the early November highs.
On a settlement above $89 in January we should see a print in the mid $90′s in the next few weeks. Aggressive traders could lightly scale into longs in natural gas futures with stops below the recent lows. In the last two sessions the indices have gained 3-3.5%, the 20 day MA should support pullbacks. In the Dow at 11180 and the S&P at 1200. The dollar appears to be rolling over and our forecast is a trade back to 78.00 in the coming weeks. Those in agreement are advised to gain long exposure in the Swissie or Euro-currency.
With the ECB extending liquidity in 2011 expect some wild moves. Our advice is exit longs in live cattle as a correction is coming. Aggressive traders could start scaling into longs in February lean hogs with stops below the recent lows…we've yet to make a move with clients. An alternative play would be to get long futures and sell out of the money call options at a ratio 1:1. The metals are starting to look toppy…we suggest trailing stops and lightening up on longs as we could see a $1-1.50 depreciation in silver and $30-40 in gold. Continue to scale into longs in agriculture; whether it is corn, soybeans or wheat.
Buy dips in cocoa that hold the recent lows…we should see some back and fill action after the 4% pop today. March cotton was limit higher again today picking up 4.12%. On a trade near $1.30 we will be l00king to book profits for clients in March positions.
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 UBS E-TRACS CMCI Silver TR ETN (NYSE: USV). The USV is an ETF that tracks silver. UBS E-TRACS CMCI Silver TR ETN was down 0.21% in today's session.
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