Looking back at the month of August most commodity prices have appreciated ...did you take advantage in your portfolio. Another higher print in Crude today as prices have advanced $5/barrel in the last three days. We've reached a crossroads though as prices are at a point where we could go in either direction...my suggestion is lighten up. In the October contract support is seen at $87 with resistance at $90. My opinion is that the strength in products of late has helped in aid in Crude oil's ascent. Lower trade was rejected in natural gas today as prices pushed higher by 2%. As of this post prices are north of the 9 day MA and a settlement above the 18 day MA at $3.96 should get bulls in the driver's seat. My suggestion is bullish positioning in October and November contracts. Stocks continue their push higher breaking above mid-Augusts resistance and at this juncture look poised to retrace 50% lifting the S&P to 1230 and the Dow to 11730. Our clients are on the sidelines advised to exit their longs yesterday. Back and forth action continues in the metals with an almost exact mirror image of yesterday's action with gold higher by $50/ounce and silver by $1/ounce. We think it would be healthy to see a correction but today we're the minority as buyers are returning with a vengeance. Our clients will wait for a correction before re-establishing longs. Continue to buy dips in the Loonie and sell rallies in the Yen. We've been suspecting an intervention from the BOJ and think it is still a high probability. Scale into shorts in sugar as it was one of the few commodities that lost ground today... a potential sign of a laggard on a day like today. December coffee has competed a 61.8% Fibonacci retracement but still is not showing signs of a top. Bearish plays are on our radar but we would first like to see evidence of a top. A 50 cent rally in just about three weeks in our opinion prices have overshot to the upside. Treasuries are clearly having trouble going down so down fight the trend!. Our clients will not get long but we are done trying to play the short side until circumstances change. Mixed bag in Ag's with wheat and oats losing ground while corn and soybeans ticked higher. Clients continue to sell corn at these elevated prices as do the farmers in the fields. We expect a trade under $7/bushel next month...trade accordingly. Continue to let livestock trade lower...be patient we see more downside in lean hogs and live cattle.
Risk disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.