Our wallets as consumers are not fat with the rising price of commodities this Fat Tuesday…from gas to a loaf of bread prices are moving higher. Crude is showing signs of exhaustion…NO I’m net advising getting short but a $5-7 correction seems reasonable. A trade back to just the 20 day MA in May drags prices in the May contract to $97.50. Natural gas failed to penetrate the 20 day MA; the same level that acted as resistance last week. On a settlement above $4.00 in May expect bears to be on their heels. We suggest gaining bullish exposure via futures and options. We would’ve expected to see some downside follow through in the indices today but after the rally prices are back above the up-sloping trend line. We would like to see more guidance as we’ve been sucked back into some shorts via June puts and are again under water with some clients.
The dollar should see more upside from here…sell the Euro, Pound or Swissie. Lean hogs are a buy in our opinion as we will have some bullish suggestions in June after today’s 2.6% appreciation. Buy dips in live cattle as 1.20 is likely in the June contract and 1.30 in the December. Silver and gold look heavy to me but they have for weeks now. We may issue a ratio spread trade recommendation selling (1) silver and buying (2) gold…stay tuned. Cocoa is a sell; we will be looking to gain bearish exposure in May or July in the coming sessions. Cotton traded down limit…clients are short May from much lower levels and we may have a July options recommendation if we continue to see weakness…stay tuned. We may see a continued break ahead of Thursday’s USDA report but we would use breaks in grains to establish longs in new crop contracts. We have November soybeans and December corn on our radar for clients. From the long end to the short end we feel the play is to be short in the debt complex.
Risk disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.
Matthew Bradbard
MB Wealth Corp.
(954) 929-9898
(954) 929-9993 fax
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