Short term expect more weakness in securities and commodities…medium to longer term use this weakness as buying opportunities at least in commodities.
Intra-day Crude was down by over $4/barrel but as of this post prices are only off $1.70. We remain bearish with some of aggressive clients expecting further downside. The first support is seen at the 9 day MA in December just above $91. On a settlement below that level we see the 40 day MA in play at $86.30.
Natural gas gave back the two previous day’s gains dragging prices back near its contract lows. Wait for prices to re-take the $4 level before adding to any open longs and be willing to take a loss on new lows.
Stocks continued lower finding support at the 20 day MA on their lows. We remain bearish with downside targets of 1185 in the S&P and 11250 in the Dow.
Gold pared its losses to rally in late dealings closing just off its highs…continue to use $1700 as your pivot point. My bias is a further correction but I’ve been way off so until I get a clear buy or sell signal we advise the sidelines.
Silver lost 3% and appears poised to re-test the $30/ounce level. A $5 trading range is a bit much for me to stomach so clients are on the sidelines here as well. Longer term traders should look for long dated call contracts on a 10% further retracement.
The dollar has appreciated 3% in the last two sessions and does not look done. Expect volatile movement but all crosses should see lower ground. Some clients remain in their bearish Yen plays as we should see further liquidation.
If coffee breaks the support that held in early October look for momentum to push coffee 10-15 cents lower in a hurry…trade accordingly.
Sugar lost 1.7% today trading lower now five out of the last six sessions. The trend line that has held since May could come in to play just under 25 cents in March so pay close attention if we break support look out below.
Treasuries like the dollar should continue grinding higher as long as commodities and stocks are moving lower. In fact expect new highs if outside markets continue to influence.
Corn remain stuck at the 200 day MA as two sided trade has persisted now for two weeks. Clients have NO exposure but would be willing to step in as a buyer on a trade closer to $6/bushel.
We pulled clients soybeans longs yesterday and will be exploring longs from lower levels; today soybeans were lower by 1.25%.
Live cattle came very close to filling their gap from late September before prices reversed lifting prices limit up on the day. Buy February on dips as we are expecting fresh contract highs in the weeks to come.
I failed to mention there is a FOMC meeting today and tomorrow so we could see some firework..stay alert.
Risk disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.
