It is too early to say but initial market action indicates some change in trends. Stocks and Crude lower, bonds higher and metals could be breaking out of their recent sideways congestion..time will tell. After approaching $95 overnight Crude has backed off...as of this post prices are in the middle of today's range. Aggressive clients are selling into the recent strength but do not get over committed because Crude has not turned lower yet. If we put in an interim high between $94-95 barrel a 50% Fibonacci retracement would put Crude back near $85/barrel. Even with Crude recent ascent the products have not been able to muster a rally so we see limited upside in the immediate future in Crude especially is we see outside market influence. After hitting the 61.8% Fibonacci level just yesterdays stocks appear to be rolling over with the indices off 1-2.5% as of this post. We started taking a small bearish position with some clients today in bearish ratio spreads in the ES with a target of 1175-1185 in December futures...trade accordingly. Gold is higher by 3% trading above $1700/ounce for the first time since its steep correction in late September. A settlement above $1700 should get more bulls interested as we likely trade back to $1740/1750. If pullbacks hold the 100 day MA at $1665 aggressive traders can start working back into longs. Silver gained just better than 5% lifting prices to three weeks high and nearly out of the trading range we've been stuck in for the last month. A settlement over $33 signals that we trade north of $35/ounce. The only viable trade I feel for those willing to stay in the trade for several months in gold or silver is purchasing call spreads into next year...that goes for gold and silver as the day to day swings are too great to manage the risk in futures...in my opinion. The commodity currencies were hit the hardest; aggressive traders can gain bearish exposure in the Aussie, Kiwi or Loonie. We continue to like scaling into shorts in the Yen near the contract highs. Continue to scale into shorts in sugar. We were looking for higher trade to get short coffee so but we missed the trade as prices fell off a cliff today dropping 5.7%. We will continue to look for selling opportunities in future rallies for clients. 10-yr notes are back above their 20 day MA and it looks like 30-yr bonds will be in future sessions. That being said we will not take the trade but Treasuries become a buy above that pivot point. Further weakness in stocks should also support that sort of move. Aggressive traders can gain bearish exposure in corn as long as we do not see a trade above the recent highs. Some clients remain long soybeans and we would be willing to add to the trade above the 50 day MA; in January $12.47. Live cattle is meeting support at the 38.2% Fibonacci level as you can see for the last three sessions. We expect that level to give way and have a target of 1.20 in December. That should put February close to 1.22 and if that level holds we view it as a good long entry for scale in buyers. Lena hogs gave up 1.6% today as prices are breaking lower as previously forecast. Our target in December is 85-86.00 cents...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.