Crude continues to work higher...my suggestion is cover shorts until there is evidence of a top. Are prices to high...yes but we could advance $3-5 more and we've had enough pain. The weakness in RBOB has been the drag as even in the face of rising Crude oil RBOB has declined over 10 cents in the last three sessions. Natural gas remains the dog in this sector...refrain from picking a bottom! Stocks failed to follow through retracing about 1/3 of yesterday's losses. We remain cautiously bearish with clients expecting lower ground yet. Metals appear to be heading south at least in the short run with gold down over $30/ounce and silver giving up 30 cents. We see gold below $1700 and have no interest in approaching longs until that happens with our clients...current price $1760. On its lows silver approached the 40 day MA; level that has supported for the last week. On a breach of $33.15 do not rule out a trade back to $30/ounce. Clients have no exposure but we are mildly bearish at this moment. Copper has lost ground for the last five sessions and is down over 40 cents/lb. in the last two weeks. If this continues we could see the $3 level challenged by December. Mixed bag in forex today...buyer and seller beware as there are no clear signals. Some clients remain in their bearish Yen plays but if we do not see a breakdown very soon we will be cutting their losses. Cocoa is lower by 7% in the last three sessions dragging prices to contract lows. We do not suggest catching this falling knife but another 5-8% decline would make one hell of a buy...in my opinion. Whipsaw continues on the long end of the curve...the more appropriate play is shorting the short end ...in long dated Euro-dollars. Agriculture fell apart today as bears are clearly in control. Corn and soybeans were lower by 1.5% while wheat gave up nearly 4%. Aggressive traders could have short exposure in any of the aforementioned grains. Live cattle broke the 20 day MA trading lower now for the last five sessions. Lean hogs finished higher but well off their early dealings. As mentioned yesterday we favor working into bullish trades here thinking an interim low is in...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.