If you notice most of our recent trade recommendations are contingent on the US dollar heading south again. If we see that happen most of our client's positions should start to cooperate...stay tuned. Continue to buy dips in Crude oil...we believe $78-80 in the November contract is your buy zone. We expect once we get a settlement above the 9 day MA we should see more buying enter the market; that level is $83.10 in November. A possible play as opposed to outright longs is long one futures while simultaneously selling a call 1:1. Adhere to the same technical advice in the products as a close over the 9 day MA should confirm an interim bottom. New lows were rejected in natural gas but it remains the dog in the energy sector. We still expect a short covering rally but if we do not see it very soon we will likely liquidate clients positions and go elsewhere as this market has been dead money now for several weeks. A sloppy chop continues in equities as traders continue the tug of war. As we recently voiced we think a 1100-1200 trading range will be the likely scenario for several weeks. December gold held and tested the trend line overnight holding that critical $1585 number. A breach of that things would likely get ugly and a trade above $1660-1670 would mean a trade back to $1800...in my opinion. Silver appears to close 2% higher on the session but what I do not like for my clients long positions is we've made lower lows and lower highs now for the last three sessions. We are holding longs with a target of $35/ounce ...we should know based on tomorrow's close if this trade will work...stay tuned. The dollar was flat today unable to gain any traction...as we said yesterday move to the sidelines or at a minimum tighten stops on open currency trades. Cocoa added 1% as price action looks like a solid base is forming...gain bullish exposure in March contracts. March sugar picked up 6.5% today, another move like that tomorrow and shorts are back on our radar. A trade to 27.65 would complete a 61.8% Fibonacci retracement. Our clients open OJ positions are way down and even with a rally going to be a loser...stay tuned. That being said fresh entries can be bought with stops below the recent lows. To be clear we are not adding to a loser but if you currently have no exposure a fresh long entry looks viable. The fact that Treasuries did not rally leads me to believe that bearish plays have a chance. 10-yr notes remain below their 20 day MA and 30-yr bonds should settle at that critical pivot point. With the exception of rough rice all Ag commodities were higher into tomorrow's USDA report. We have advised clients to have light long exposure in wheat, corn and soybeans into tomorrow's report. We are still looking for a retracement in live cattle in the coming weeks to gain bullish exposure in 2012 contracts...trade accordingly. Lean hogs broke out to the upside gaining nearly 4% lifting prices to near two month highs...my suggestion is buy dips.
Risk disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.