Shout out to Santelli 8/13/10

One simple question does anyone beside Rick Santelli understand the ramifications of kicking the can down the road? Oil appears to have dropped enough to find some interested buyers trading down just over 7% this week. We’ve advised traders to take at least partial profits on shorts as there should not be much more work on the downside in our opinion. Likewise the distillates have reached our downside objectives so we’ve suggested hedgers to re-institute their upside long hedges. RBOB prices have fallen 11% in the last eight sessions but $1.90 should support. As for heating oil prices have depreciated 9% and could have 2-4% additional slide but no more in our opinion. Natural gas appears to be building a solid base; we’re recommending scaling into long futures and/or purchasing November 50 cent call spreads. Indices could not decide on direction today essentially treading water. Traders’ short futures should trail down stops. We advised clients in September put options to move out to October as we could get a dead cat bounce from here and we want the additional month time. We advised buying October 1100/1000 1:2 put spreads for just over $600/per plus fees. Prices in the S&P are expected to wander between 1125 and 1025 for the next few weeks. Sugar may resume its move higher gaining almost12% from its intra-week lows. We prefer getting long with clients at lower levels…stay tuned. Cotton has gained just over 15% in the last three weeks trading near a 1 1/2 year highs. We’ve been selling into strength with clients expecting a set back. We suggest having a small position in December options and adding to it once prices roll over. With today’s higher trade in Treasuries we’ve completed a 61.8% Fibonacci retracement. On a rally in equities next week could bonds and notes find an interim top? The trend remains up in gold but the premiums are pricey for options. In my opinion the only viable play is a long in futures with tight stops; the 50 day MA is $1214, the 100 day MA is $1195. Play the breakout in silver; above $18.20 or below $17.76. We like December call spreads as they allow flexibility for traders in case of a large short term correction. Wheat’s close was ugly with prices in CBOT wheat down 8 cents on the week and KCBOT closing up 22 cents on the week. The December KCBOT/CBOT spread mentioned earlier this week traded from 30 cents under to a 3 cent premium. We continue to like buying corn on dips and have advised client’s bullish option plays and futures trades with a longer term view. We could get a break short term and that is why we suggested October puts if leery of too much bullish exposure. The US dollar was higher all five sessions this week gaining decisively lifting prices to three week highs. Continue to fade rallies in the Euro, Swissie, Aussie and Loonie. If the Yen breaks the 20 day MA next week we may have some bearish trade suggestions. 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 .08% in today's session.