A phrase from the past but really look at the surge higher in equities and commodities even in the face of a rate decision out of China. The trend line supported the action today in April Crude and as for the back months (May-July) the 20 day MA supported today's action. We've been advising clients to scale back into longs looking for a revisit of last week's highs. The question now in natural gas is on a trade lower do the lows from the Fall support price action...if so we would be looking to start gaining bullish exposure with clients via 50 cent call spreads...stay tuned. Today's action in the indices makes it six out of the last seven sessions with positive trade. You know where we stand...a small losing position in March ES puts and not looking to add any more exposure though we still think a nasty correction is around the bend. Sideways action in forex today... we still favor fading rallies in the Pound and Euro as we expect a 2-4% loss in the coming weeks. Remain on the sidelines and let live cattle prices come to you; a long entry closer to 108/109 in April is our current thinking. Bulls are clearly back in the driver's seat in the metals complex; gold higher by 1.16%, silver 3.18%, and even palladium joined the party with a 2.23% surge. Add to longs as we are looking for a trade to the highs we experienced in mid-December. Sugar lost nearly 5% today breaking the 50 day MA for the first time on a closing basis since mid-November. Chart damage was done and we could see a trade lower though we will be absent with clients thinking we have enough exposure in this sector. With clients already short coffee and cotton via bearish options strategies. Position squaring ahead of tomorrow's USDA report in the grain complex, our best guess is neutral for soybeans and bullish numbers in corn and wheat. Some of more aggressive clients are positioned mildly bullish in corn heading into the number...stay tuned. Keep the short end of the curve on your radar as long dated Euro-dollars are rolling over and on the verge of breaking support.
Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results
By: Matthew Bradbard
Head Trader, MB Wealth Corp.
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