Sugar…Not so Sweet 11/11/10

A 10% move in one day without any leverage…ouch. Moves like today is reason not to fully margin your commodity account. Continue trailing stops on longs in Crude but we would not suggest throwing any more logs on the fire until we get a set back. That it not say get short but a trade back to the 20 day MA about $4 lower is not out of the question. Monitor the movement in the distillates because just as they led on the way up they likely will lead on the way down if we do get a correction in the short run. Natural gas has given back nearly 6% in the last two sessions trading back to the trend line and 20 day MA. The remainder of the weeks action will be critical as these levels need to hold for trading to remain friendly. We used today's set back to start working out of clients bearish options plays at a small loss. On continued weakness we will be cutting losses in the remainder of client's bearish positions. Sugar was down nearly 10% today as this could be the start to a much larger correction. We were fortunate enough to get a small number of our clients short in early dealings and by the end of the session they were already taking partial profits. Fade rallies in sugar as our ultimate target is 22-24 cents in the coming months. Cotton is trading off its recent record high but we suggest waiting till next week before committing capital. We are pricing out various bearish plays to potentially capitalize on what we view as a coming 15-25% correction…stay tuned. Aggressive traders can gain bearish exposure in March coffee. Clients will likely be purchasing bear put spreads. Trail stops on lean hog longs just under the 20 day MA. Options traders were advised to start booking profits on their calls today. We will be re-establishing bullish exposure in '11 live cattle contracts tomorrow or next week…stay tuned. 30-yr bonds and 10-yr notes are on our radar but clients have NO exposure. We are toying with the idea of playing the short end of the curve via Euro-dollars…stay tuned. Continue to scale into longs in '11 corn. We see 25-40 cents of downside with a potential 75 cents -$1.00 of upside. Decent action in metals today gaining ground the face of a strengthening dollar. Aggressive traders should be long but we highly recommend taking your size down. If silver can reclaim $28 this week there is likely a new high around the bend. As for gold as long as prices remain above $1400/ounce we remain friendly expecting $1450. The dollar climbs the wall of worry and should take a stab at the 50 day MA just under 79.00 very soon. Dollar bulls could be short the Euro or Yen. On a breach of the 50 day MA in the Yen expect 1.1800 and that serves as our recommended exit door on shorts. 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 SPDR Gold Trust GLD. The SPDR Gold Trust was up 0.31% in today's session.