Don’t over think investment decisions
Don’t over think investment decisions
Weekly Commentary
For June 29th– July 3rd 2009
By: Matthew Bradbard
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At this point I’m not sure whether the global recovery has begun or this is just a head fake, who will win the tug of war between inflation and deflation, if Treasuries are the next bubble, if the buying from China is sustainable or when interest rates will be increased. All good questions and heated debates but what really matters is what is working, being agile and spotting opportunities where the risk/reward dynamic makes sense both long & short in commodities is what seems to be working.
To find out exactly how we are positioning our clients in commodity futures and options, Contact us today at 1-888-920-9997. Don’t forget to tell them The G Manifesto sent you.
Energies
The DOE reported crude oil supplies were down 3.8 million barrels last week, supplies of gasoline were up 3.9 million barrels while heating oil supplies were down 100,000 barrels. August crude oil finished lower by $1.04 last week. On the weekly chart a bearish engulfing candle formed, if confirmed expect more downside. Continue to use a trade above $72 or below $67 to determine the next leg. Our clients will most likely be buyers between $62 and $65. August RBOB was lower by just over 4 ½ cents as prices are 22 cents off their highs from just 2 weeks ago. Use 1.8150/1.8300 as support with resistance coming in between 1.92/1.9350. If crude falters expect a trade down to 1.70/1.75; the 50 day moving average comes in at 1.7585. August heating oil retreated just over 4 ½ cents as well. Resistance is seen at 1.85 support at 1.75, the 50 day moving average in heating oil is at 1.6470. Crude and both product were down the last 2 weeks, what will this week bring?
The DOE reported underground supplies of natural gas were up 94 billion cubic feet last week to 2.020 trillion cubic feet. Supplies are now up 31% from a year ago. August natural gas was down 8 cents but did manage to close just over the 50 day moving average. Support is seen at 3.85 with resistance at 4.15 followed by the 100 day moving average at 4.27. We continue to accumulate October $5/6 call spreads for clients.
Livestock
August live cattle traded higher by 10 ticks last week making their way to positive ground now three weeks running. We maintain that an interim bottom was made three weeks ago and since prices have moved 4% off their lows. We are still holding the long August live cattle/short October live cattle spread for clients expecting the spread to come in. Support at 81.60/81.80 with resistance at 82.90 followed by 83.50. August feeder cattle were higher by 72 ticks last week and in three weeks we’ve gone from oversold to overbought. Resistance is seen at 99.90 with support between 97.80/98.00.
Click Here to buy Crush It!: Why NOW Is the Time to Cash In on Your Passion
The USDA reported there were 66.08 million hogs and pigs in the US on June 1st, down 2.0% from a year ago, roughly as expected. 5.97 million lean hogs were kept for breeding, down 2.7% from a year ago and less than expected. August lean hogs fell 3.80 last week or 6% to a new contract low. Currently some clients are short August futures and long (2) August 62 calls. There is little to no support on the daily chart, resistance comes in at 59.50.
Click Here to buy Crush It!: Why NOW Is the Time to Cash In on Your Passion
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_____________________________________________________________________________________Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Before trading MB Wealth recommends that you should carefully consider your financial position to determine if commodity trading is appropriate for you. All funds committed should be purely risk capital. Past performance is no guarantee of future trading results. There are no guarantees of market outcome stated, everything stated above are our opinions. Calculations of profit and loss have not factored in commissions and fees.
