As opposed to gripe about market manipulation recognize it exists and will continue to impact the markets so trade accordingly. Expect the unexpected because remember this is the "new normal." Crude has had trouble trading higher in recent sessions and it will take a settlement above $86/barrel for me to feel justified about being bullish. I am neutral until that happens. That being said we do not at this point anticipate a trade below $80/barrel so continue to buy dips that hold that level. My only suggestion is keep your size small until the market proves your right. Buy natural gas with both hands and be patient. This market is NOT on anyone's radar and I'm afraid it will not be until we see pries pop 4-7% which we anticipate happening in the very near future. Our favored play is October or November future or 50 cent bull call spreads. Stocks will finish near their weekly highs as we think continued buying comes in next week lifting the indices to the highs we experienced two weeks ago. If this plays out we will see how the Dow reacts at 11500 and the S&P at 1205 to see if we want to get bearish exposure...stay tuned. Gold will close lower for the first week in eight experiencing over a $200 range high to low. $50-100 swings are now a daily occurrence so if you trade this market whether it be via futures or options make sure you fasten your chinstrap. We missed a long entry just above $1700/ounce yesterdays for clients and with prices $120 above that level as of this post we will wait for another leg down. As we said in recent blogs we expect $1650 before a new high...trade accordingly. Silver bounced as well today but the 1.4% appreciation was not as impressive as gold's 3.7% pop. We have no long or short exposure currently in silver with clients and wish to be a buyer closer to $37.50. We suggested clients to use today's advance in the Yen to re-establish bearish trades. We still would not rule out BOJ intervention at these levels and a trade back near 1.2500 could happen in very short order. Even without intervention 1.2800 seems like a reasonable target in the coming weeks. A strong close in the Loonie today makes me feel more comfortable with clients bullish positions as we suspect a tare near 1.0250/1.0300 in the coming weeks. The Swissie got hit hard this week losing for the third consecutive week, looking at the daily chart it is a buy but then the weekly sings a different tune. We could see a lot more trouble so stand aside for now would be my advice. Sugar may have reached d turning point but clients are slightly under water on their bearish sugar plays put on this week. The next few weeks we expect pressure but on a new high we would let the trade go at a loss...stay tuned. OJ gave back the previous week's gains but at these levels we still favor being long with clients all things considered. Our target remains $1.70 in the November contract. At this rate I'm not sure I can afford coffee at Starbucks for that reason and for health I've opted to switch my daily ritual to tea...I will keep you posted. In all seriousness shorts remain on our radar...in fact today we started pricing out December bear put ratio spreads. We will likely act next week with clients so stay tuned. We would let bearish plays in Treasuries go as we view it currently as dead money and there are far better trading opportunities elsewhere...in my opinion. Corn and soybeans rallied to new contract high and yes folks we got this one wrong. We got out of soybean longs prematurely and to add insult to injury some aggressive clients are short corn. Further evidence I am human and sometimes wrong. We feel a 148-150 yield is already priced in. On a break clients will look for an exit door ideally next week. Although we would expect a trade under $7/bushel a trade back to $7.40 gets clients out at a small profit and that is our plan from here. We will likely have bullish trade suggestions in lean hogs and live cattle next week...to date we've yet to re-establish longs with clients.
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.
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Trading in commodity futures and options involves substantial risk of loss. Past performance is not indicative of future results.
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