Commodities are Back 8/11/11

It is not as if they went anywhere but we should resume a move north from here. Crude oil is on the move higher and as we voiced yesterday our first target is $87/barrel followed by $89.50 and then $92. This was a painful ride down for the bulls including me and my clients and in my estimation it will be painful ride for the bears in the coming days to weeks. Natural gas is above the 9 day MA and we got more buy signals today. Be long October via options or futures as we suspect a 10% move from here in the coming weeks. Down, up, down, up...recognize a is the back and forth in the equity market in the last four days. Major volatility swings like we've seen generally happen at a turning point...that being said we are looking for this bounce to lift the indices 5-7% from today's accordingly. A bearish engulfing candle and $80 trading range in today's gold session...can you smell a correction? I think we're long overdue but prefer the sidelines with clients. A potential pairs trade one of my clients brought to me is long platinum and short gold...we're exploring the trade...stay tuned. Flip a coin in silver as we said yesterday trade the breakout above $40 or below $37/ounce. We will likely regret leaving the trade but clients were advised to take a profit on their Swissie shorts today with prices closing down nearly 4.5%. They left early in the AM but still picked up a double. The Loonie remains a buy as we are looking for a trade back near the 20 day MA; in September at 1.0380. We are shopping long entries in OJ and cotton for some of our clients..stay tuned for trade ideas. A triple top in Treasuries...maybe tomorrow's action should tell. We lightly got some clients short today via October bear put spreads with a target of 133'00. The USDA report was bullish and grains responded with corn higher by 3.7%, soybeans 2.3% and wheat jumping by 2.5%. We will be buying dips in December corn and November soybeans and December soybean oil for aggressive clients. Live cattle broke out today and has convinced us that we want to gain long exposure with clients once again...expect bullish trade ideas in October and December to follow in the coming sessions.

Risk disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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