Full Agenda 4/4/11

Fed minutes, another USDA grain report, Central Bank meetings makes this a fairly busy week. Crude and the distillates are on fire printing multi-year highs. The trend remains up as a break out has occurred, but with so many unanswered questions in the Middle East and a potential dead cat bounce in the dollar we feel we’re in the eighth inning of the current move…trade accordingly.  Natural gas lost 2% today but maintained the 100 day MA which has acted as support now several times in recent weeks. We are still looking for a long entry for clients closer to the $4 mark. Inside day in the indices as of this post…are the bulls running out of gas? Aggressive clients have been buying June bear put spreads in the ES and are currently slightly under water. The ECB and BoE meet this week, expect some volatility…we recommend the sidelines into the rate decision. The only play in forex we suggest for traders is bearish exposure in the Aussie looking for a 3-4 cent break in the coming weeks. Live cattle were down for the first session in the last five. We would like to see a healthy break to get clients long…stay tuned. We continue to like fading rallies in June lean hogs as we feel we could see a 3-5% depreciation…trade futures or options in June contracts. Both gold and silver were higher without clients being long. In fact some aggressive clients have bearish option trades that have lost 20-35% of their value in gold. Being they are June contracts we’ve opted to hold for now. Cocoa remains on our buy list, sugar longs are on our radar and we favor bearish plays in coffee. Prices in coffee have broke nearly 14% in the last month but we feel there could be a further break…stay tuned. Corn printed a new contract high in old crop today as prices continue to surge after last week’s USDA report. Yes old crop has outpaced new crop but we still favor new crop for those looking to capitalize on this year’s plantings. We advised clients to lighten up on their outright wheat longs today but to stay in their CBOT/KCBOT wheat spreads. After today’s nearly 4% appreciation we’ve completed a 50% Fibonacci retracement in the CBOT contract. Treasuries are a buy…we advised clients to get long 10-yr notes today anticipating a 2 point move higher in the coming weeks.

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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