This is not your father's market where investors can buy and hold. Cut losses and take profits...risk management is the name of the game. Three dollar trading ranges or $3,000 swings are now commonplace in Crude in a 24 hour period so this market can be humbling. It is a roller coaster ride but as we've voiced as long as futures hold $94/barrel we like being long. We remain cautiously bullish for clients with a target of $102/103. Natural gas will close negative but nearly 15 cents off their lows. Obviously we're not the only ones looking to buy dips. Our target remains $4.55/4.60 and we maintain trades should be in September contracts.
As of this post it appears stocks...well at least the S&P should close below its 50 and 100 day MA's. If that is the case we could make a run at the 200 day MA approximately 35 points lower. We have NO exposure but forced into the market we would be a seller for clients. Take off your Yen longs or trail stops at a minimum. We advised clients to reverse in the Loonie today. That is move from buyers to sellers. Our recommendation was to sell September calls looking to capitalize on a trade lower.
Live cattle broke the 20 day MA today for the first time in one month. Intra-day we were trading down the daily limit which was a nice move for our clients bearish trades. I hate picking tops as I generally get egg on my face but we would book profits on gold and silver bullish trades as an interim top MAY be in place. Aggressive traders can lightly gain bearish trades in gold...we are not so brave in silver. Ideally we get a setback to be a buyer in both metals for clients.
Sugar gave up 4% today...a 38.2% Fibonacci retracement puts October future back at 26.75 cents. Those who remained short may get their redemption. Our advice is to have bearish exposure in either October 2011 or March 2012. Our targets are as follows...26.75, 25.60, 24.45, 23.50. Clients will be looking to get back in Ag trades (wheat, corn and soybeans) ahead of the next USDA but from lower levels...stay tuned.
Treasuries may break down from her but wait for more confirmation. Lower highs and lower lows are a preliminary sign but we'd like to see more evidence. We took a shot today buying inexpensive August 30-yr bonds puts with some clients. They only have one week so we need a break tomorrow or early next week or they would expire worthless.
Risk disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.