Panic equals Opportunity 8/18/11

Whether it means getting short instruments or getting great long entry points take advantage of the selloff. As of this post Crude oil is lower by nearly 7% as the European contagion affected virtually all markets. This in our opinion should be a temporary setback but do not rule out a trade back to near the lows from last week. We will be buying clients Crude and those that are already long should be hedging by trading other contact months short or utilizing options. Natural gas has lost ground now for three sessions but all things considered the 0.50% depreciation today was minor considering outside market influence. We're suggesting purchasing bullish exposure in October and November contracts to clients. Equities worldwide are down between 4-7% with the European indices getting hit the hardest. This is an ugly day and if the bears gain control do not rule out a challenge of last week's lows. Under 1100 in the S&P if given the opportunity we may play a bounce...stay tuned. A new record high in gold as scared money helps lift gold just over 2% today. Again we're not bearish but the gold train is getting awfully crowed so do not rule out a major correction in the near future. We would likely be a buyer of a $100 plus dip with aggressive clients. Silver is approaching $41/ounce and should be poised for a move north of $42 in the coming accordingly. The Loonie gave up 1% today but as long as par holds on a closing basis we suggest accumulating longs anticipating a move back to the 20 day MA; in September just shy of 1.0300. Cocoa gave up nearly 2% today...another 2% and we will be gaining bullish exposure with clients. November OJ fought back to close marginally higher in late dealings...some clients remain long with an upside target of $1.72/1.75. A fresh high in Treasuries but as of this post we are well off the highs...are the bulls running out of gas? Book profits on any remaining longs in soybean or soybean oil contracts. The WSJ article yesterday's likely coincided with an interim top in the corn market as we gave up nearly 2% today. We see the first significant support in the December 2011 contract 40 cents from current levels. Sell rallies in lean hogs and live cattle as today served as day two of a down move that should drag into next week and potentially to reversal levels...stay tuned.

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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