A day later… 11/12/11

What a difference a day can make as commodities come under pressure after a one-way ride the last several weeks. Stiff resistance comes in just above today’s highs in Crude, we suggest booking profits on longs and moving to the sidelines anticipating a correction. After a $3 pullback we would advise re-establishing longs. Additionally we advise hedgers in RBOB or heating oil to lighten up as we would think a 10-15 cent correction is coming. Natural gas traded lower by 3.0-3.4% today…tomorrow the test will be if the triple bottom can hold. If it does stay long however if support breaks cut losses as we could see a trade back near $4. Indices failed to make their way to higher ground but bulls remain in the driver’s seat. We suggest standing aside on new entries but welcome a break lower to cut losses on clients put spreads. The dollar lost just over 1% today having retraced nearly 50% of its move from the last 60 days. The BoE and ECB left rates unchanged and with the exception of the Loonie all crosses traded higher. Trail stops if in the Euro and keep the faith in the Loonie as a trade back near .9900/.9850 is still expected. Book profits on remaining longs in lean hogs and live cattle and move to the sidelines. There is no chart damage as of yet but if the  50 day MA gives way in silver we would likely cut losses or lighten up on silver longs for clients; that level is $28.45 in March. Bearish engulfing candle in gold today so we could have some more downside here as well. The 3/2 silver gold trade was painful today but we will hold on for now…stay tuned. If March silver does not overtake $29.25 tomorrow we may move to the sidelines. Stay long 10-yr notes and 30-yr bonds and look to add to the position on a close above the 40 day MA’s; 121’08 and 122’15 respectively. Decent follow thru after yesterday’s action in grains but we expect to see some profit tasking in both corn and soybeans before we see much higher ground. Aggressive traders can scale into shorts to play a slight retracement. Cotton has been good to clients until this last trade but I’m sticking to my guns as we feel cotton is one of the best shorts out there; from here we feel March and May contracts can depreciate 15-20%…trade accordingly.

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

Read more at MB Wealth