Underway after MLK 1/18/11

After the MLK holiday we are resuming trading on this shortened week. The 50 day MA continues to support Crude, in March at $91.45. Our stance on oil is neutral as we could see a $2-4 move in either direction. We’d prefer to see a move south so we could re-establish longs for clients…stay tuned. Likewise on the distillates and natural gas. Lock in your profits if you have them and wait for a clearer buy/sell signal for new positioning. The indices continue to race higher. My logic is the higher they go the more they have to fall but sentiment continues to be bullish, I am just not a believer. I’ve been short and wrong with clients in ES options. They have some time to see a retracement to cut losses but do not add to this loser.  A failed rally in the Loonie…will we finally see the retracement we’ve been looking for? Aggressive clients were advised to get short the Pound today after the 3.5% run up in the last week…we think too much too quick and are expecting a set back near 1.5600/1.5700. After posting a fresh record high live cattle prices retraced just over 2.0%. An interim top is likely in place as we will be looking to get clients positioned long after a further retracement. The 38.2% Fibonacci retracement may prove to be the line in the sand in March silver as it has supported the last two sessions. Prices were higher by nearly 2% today; with follow thru tomorrow we should get a buy signal. Gold traded higher but was unable to take out the 50 day MA closing just 0.50% higher on the day. The silver/gold ratio trade mentioned in previous posts is back in play but not for the faint of heart. Aggressive traders can be short soybeans currently and should have bearish plays in corn on their radar. In the weeks to come we expect a 3-5% correction in both. Cocoa is running into resistance at the upper end of the recent channel but after a few days of consolidation we expect further upside..stay the course on longs. We would prefer to be out of our clients cocoa longs before getting short coffee but bearish plays are on our radar…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.

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