A Storm is a Brewing 1/11/11

Not just the Nor’easter moving up the east coast but can markets continue to move straight up? Crude oil is approaching its contract high having surged 3.6% in the last three sessions. We’re expecting new highs and a potential trade to the mid 90′s. Recent long entries were advised to take a quick profit and re-establish longs on a set back. Too often than not we’ve not taken quick profits for clients and paid the price so at least lighten up or trail stops. Aggressive traders can re-establish longs in natural gas with tight stops blow the recent triple bottom. We should have some March option suggestions in the days to come. The indices pushed higher today but until we can make new highs we’re operating under the influence a correction is near. Once again we suggest waiting for a settlement below the 20 day MA’s before establishing a large bearish position. The Loonie failed to see any extended upside on a day metals and energies pushed higher, this gives us hope that prices are set to rollover. Clients are under water holding March put options with a target of .9800. Lean hogs gained 0.60% while live cattle were higher by 1.50% today. Buy dips as we should see higher levels. Those not in yet we should have some trade suggestions in the coming days; likely long futures and selling out of the money calls…stay tuned. Silver appreciated 2.30% today while gold ratcheted higher by 0.52%. The 3/2 silver gold ratio trade should perform as long as metals trade higher. On a settlement above the 20 day MA in March silver we would look to add length, that level is $29.60. We will continue to trade this spread for most as opposed to buy and hold…trade accordingly. USDA report out tomorrow morning. We’re heading in moderately bullish in corn but advised some fresh entries to buy inexpensive puts for protection. Cotton traded up limit so we are close to cutting losses on our clients bearish options…stay tuned. Cocoa is back above the 50 day MA and on its way back to 3100, in my opinion. My suggestion is to gain bullish exposure in May contracts.

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