The US dollar advanced for the fifth consecutive session today but we think there is more room to run. Continue to fade rallies in the Euro, Swissie and Pound. Our downside targets are as follows: 129.00, 1.0100, and 1.5250 respectively.

Live cattle is back above the 20 day MA; our suggestion is gain bullish exposure in either February or April contracts looking for new contract highs and potential record highs into next year. Silver and gold have yet to correct but we have yet to rule out this possibility. As we said yesterday on a settlement below the 50 day MA in gold and 20 day MA in silver expect sellers to be in the driver’s seat. Until then we’re cautiously optimistic. Copper is at a fresh two year high and though we’re not suggesting shorts we do not think this appreciation is sustainable without a healthy correction. That likely means 40-50 cents but the question is from what level…$4.30 or $4.50? We still want to see a correction in Agriculture, namely corn and soybeans before re-establishing bullish plays for clients. In reality we probably will hold off until early 11′ but we do want some type of long exposure before the January USDA report. Another limit move higher in cotton today. Some of our more aggressive clients own March put options and premiums were crushed today. Being we think we could get a violent move lower we will stay the course for now. DO NOT trade futures in cotton right now and options traders take your size down as we’re in uncharted waters. We missed a long entry in coffee with clients and remain onlookers from the sidelines. We will be looking to buy a set back of 15 cents if we are given that opportunity for clients. If you trailed your stops in lumber futures you should have been stopped on your longs at a profit today.

Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.

Downward momentum is gaining as Crude has lost 2.9% in the last 2 sessions. We are expecting this move to drag prices in May to $76/77. As we voiced in our commentary this morning exit ALL longs in distillates until this correction runs its course which should pressure heating oil and RBOB 15-20 cents. Natural gas is still searching for a bottom but we like buying at these levels. We advised new entries to scale into May futures and we still like 50 cent call spreads for June thinking a trade back above $5 will play out in the next 3-5 weeks.

We’ve been fooled before as most followers know but the indices are looking heavy. We’ve yet to redeploy money short futures on a position trade but if the Fed meeting leads to selling we will most likely get short once again with clients. Some clients still hold their June ES and SP puts and are down but we are confident that these positions will be profitable. Sugar was off by just over 1% but we are operating under the influence that the lows last week will hold. The intra-day sell off in OJ was nice but not enough to get us interested in longs. We feel May needs to trade closer to $1.30 to buy a buyer for clients. We expect cotton prices to trade lower but we suggest waiting for a close below the 20 day MA at 80.35 in May for confirmation.

We suggest waiting for more upside in Treasuries to be a seller…maybe the Fed will aid in that. We advised clients to add to their July call options and long s in December futures in corn today. May soybean oil lost an additional 2% today; clients will look to exit tomorrow or the next day on a move closer to 38.00.  We suggest waiting for an interim top before jumping in front of the freight train we call live cattle; prices made new highs again today. Gold and silver were marginally higher but “Doctor Copper” was off almost 2%. On a settlement below $3.29 (today’s low) look for an additional 10-15 cents. Monitor the action in the dollar to help trading the other currencies. The line in the sand is the trend line at 80.00 on the June contract.

Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial.  Past performance is no guarantee of future trading results.

Trading in commodity futures and options involves substantial risk of loss. Past performance is not indicative of future results.

You cannot have your cake and eat it too! Either circumstances in the economy are getting better and we need to start looking for an exit door or we are still in for a sh-t storm and then no action is necessary! If the Fed sees the economy improving than why leave IR at an “excessively low rate for an extended period.” Inflation subdued by what measures? Pass me what Ben and the gang are smoking. Crude gained by 2.5% today, ideally this is a one day wonder but tomorrow will tell. Talking to some big energy traders today they expect a range from $76-82. We will continue to play options for clients on rallies thinking that we will head back to the lower end of that range.

It sounds like a broken record but we like scaling into longs in Nat gas at these low extremes. What will be the catalyst one client asked today to turn around prices…I do not know but this the short trade feels too crowded!

Indices were sideways to up on most of the session and are still trying to digest the Feds non-action to decide where from here. I’ve thrown in the towel trying to predict a top but some of the cycle analysis that we’ve read of late courtesy of some of our clients predicts going into April it could get ugly.

Sugar made fresh lows, futures traders should have been stopped at a loss when we broke last weeks levels. We are holding off on all new entries until this market bottoms. On a rally if we get one in the coming weeks we will be looking to cut losses on call options for clients.

Let Treasuries rally 1 1/2-3 handles before selling! We will have an interest in 30-yr bonds closer to 120′00 and above 118′00 in 10-yr notes.

Green across the screen in agriculture today with corn up by 1.0%, and wheat and soybeans by 1.60%.Corn is a buy; in options we like July and futures December. We sill think there is a possibility to see a trade close to 38.00 in May soybean oil to exit for clients; we will give it till the end of this week.

Metals caught fire today likely because of the pressure on the dollar and strength in outside markets. April gold, May silver and May copper all gained virtually 2% each. We do not trust the upside and the only way we see it following through is we get a hefty break in the dollar…stay tuned.

That being said the dollar index broke the 2 previous days lows and the trend line that had held since the first week of December. The Euro and Pound should benefit the most as they have been hit the hardest. The Euro could make a stab at 1.3950/1.40 and the Pound at 1.5500; next significant resistance levels.

Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial.  Past performance is no guarantee of future trading results.

Markets seem to waiting for some type of catalyst to determine the direction of the next leg.

Inside day in Crude oil as prices hover around $82/barrel. For new entries we still like the idea of $5 put spreads but we would start looking at the June as opposed to May contract. If currently in the May we would try to buy back the bottom leg; we have suggested for clients to buy back their $70 puts and that would leave them long the $75 puts.

A disappointing day for longs in natural gas as yesterday could prove to be just a head fake. Clients remain long via April futures and June call spreads as prices were off 2.4% today.

As of this post indices are at the high of the day; we think we are close to an inflection point but we’ve been wrong for the past 2 weeks. If the S&P closes above 1148 exit short futures at a loss.

Fourth consecutive down day in sugar but we are assuming yesterday’s low at 18.82 in May will serve as support. May cotton has lost 3.8% in the last 5 session and closed below the 20 day moving average for the first time since February 8th. We are expecting another 2-4 cents and will then be advising clients to lift shorts.

Corn was flat on the day while wheat was a small loser and soybeans giving up almost 3%. A larger crop from South America could pressure soybeans another 30-50 cents.

Clients are long July soybean meal and down but we are looking for prices to rebound within that time frame, we may average in next week. Additionally they own puts in May soybean oil and should be able to book a profit next week on a move under 39.00 in May. Trail stops down if you are short lean hogs; if the 9 day MA gives way we should see a trade under 70.00 cents in April.

Mixed bag in metals; we are still anticipating a trade lower in gold, silver, and copper before we see any substantial upside.

The Commodity currencies (Kiwi, Aussie, Loonie) look vulnerable; clients remain short the Loonie expecting a trade under .9500.

That is not to say ALL commodities will correct but examining the technicals and digging deeper into the fundamentals we expect a “healthy” correction in a number of commodities. Those that have already come off the damage may have already been done (sugar, natural gas, cocoa, agriculture) but others look ripe for a correction. Where we see the chances of the largest potential corrections are Oil, metals, cotton, OJ, live stock and the Indices.

Oil has been overbought for 2 weeks now but still prices have managed to gain $4 within that time frame. Clients are positioned in $5 put spreads and currently under water. We will not trade futures from either side until we get a clearer picture.

Still trying to pick a bottom in natural gas thinking there is not much more downside.Being clients only hold a small position we’ve been able to weather the assault the last 2/3 weeks.

Seven consecutive days in the stock market is very impressive but I’m a non-believer. I expect the January highs to act as stiff resistance; if prices get thru those levels unfortunately clients will be forced to cut losses on futures, regardless we will advise them to stay with their June ES and SP puts.

Sugar was down by 2.6% but the 200 day MA is still serving as a magnet and as long as prices do not wander too far from that level we will hold onto May and July put options for clients. Without a bullish surprise in Wednesdays USDA report we think cotton needs to correct 5-8% immediately.

Agriculture could be choppy in the next few sessions as traders position ahead of the USDA report. We will hold small longs in soybean meal, and corn and shorts in soybean oil into the report for clients. We cut losses in April live cattle futures for clients today as prices made new highs aided by fund buying. Our logic is the funds are in control and they have much deeper pockets than my clients so we will re-enter once a top looks like it is in place. We think it is very close but we are not willing to lose any more money. Aggressive traders could be short lean hogs with stops above last week’s highs.

April gold was lower by just over 1% today but did remain above key moving averages.Clients own NO gold as we feel a trade under $1100 is likely this week. We have yet to determine an entry point for longs…stay tuned. Inside day in May silver as prices were lower by .80%. We think a trade down to $16.50 an ounce is likely within the next week. We will likely be a buyer for clients if we got that move so stay tuned here as well.

We have little new to report in forex as the only open position for clients is shorts in the Loonie looking for a trade under .9500 in the March contract.

Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial.  Past performance is no guarantee of future trading results.

MB Wealth Corp. is not responsible and does not endorse anything outside of the content of this article authored by Matthew Bradbard; President of MB Wealth

Sometimes traders can make money by not being in a trade. It is ok to be in cash when you cannot find a trade that you are comfortable with. That is not to say we are not trading we have just been trading more options than we typically do and scaling down our size.

$81/81.50 continues to act as a ceiling for April crude but that fact that prices have not broken down more we could see one more gasp at higher ground. We suggest refraining from short futures unless you are willing to ride prices up $1.50-3.00. We prefer a top to be set before we re-visit shorts for clients. That being said we still like $5 put spreads as they allow a bit more flexibility without the inherent risk of a potential overnight loss.

Whenever I trade natural gas I am remembered how unforgiving this market is; today prices were lower by almost 4%.

Clients have a small long position in futures and are willing to stomach it with plenty of margin if need be. The June $5.50 call spreads we started buying at $2000 are now closer to $1200. We still like the trade and expect it to be a winner but the same position can be bought at a 40% discount. Until prices break above 1125 or below 1111 in the S&P we have no new trade suggestions. Our bias remains down and clients continue to sell rallies and buy puts.

Sugar closed below the 200 day MA today; that being said we would refrain  from long futures and buying calls until an interim bottom is made. Clients that are already long via calls could take some heat in the short run but we still think a violent trade back to 26 cents in May is viable. Cotton looks like a sell at these levels; we are thinking a move to 75/76 in the May contract this month. Could the Euro-dollar be rolling over? We’ve been fooled before but this trade should remain on your radar.

Agriculture turned south today with corn down almost 1%, soybeans 2.25% and wheat 2-2.50%. We advised clients to spread off some of their corn exposure by shorting May against their December. Being they have a large corn long position we also wanted to get short something in agriculture in case of a larger break. What we opted to do was buy in the money May soybean oil puts. If soybeans continue lower and Crude oil comes off as we’ve been anticipating there is no reason why we cannot see soybean oil retrace back to 38.25-38.75. Live cattle were higher but failed to get above yesterdays highs. The Goldman roll starts tomorrow so being we have record open interest in cattle we think that April could come under pressure in the coming sessions. Clients remain long puts and short futures looking for 89.00 in April.

April gold was down just over $10/ounce today, we are operating under the influence that yesterday and interim top was made and a set back to $1085-1100 is in the cards. Clients have no long or short exposure in gold presently. With silver taking the January high and February low a trade to $17.35 serves as the 61.8% Fibonacci retracement level in May silver. We like silver in the medium to long term but a correction back to $16.50-16.85 is not out of the question short term. The reason we choose to trade spreads often in gold and silver is because the flexibility it allows in case a trade moves against you. Likewise if you are right out of the gate on direction you still make money just less than an outright.

Continue to fade rallies in the Pound though we do not suggest trading without stops. We are using the 5, 15, 30, 60 minutes charts for entry and exit. The Yen was lower by almost 1 point today; clients hold June puts expecting a trade near 1.10 in the coming weeks. As for central banks both the ECB and BoE kept rates as is; the ECB at 1.0% and the BoE 0.50%.

Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial.  Past performance is no guarantee of future trading results.

China is buying soybeans…lots of them.

The US trade deficit ballooned by almost 10% to $36.4 billion in November. Here’s one very important highlight of that report: Chinese demand for American goods climbed to a record $7.3 billion, led by – of all things – soybeans. Drought in Argentina was partly to blame, but there’s a trend under there that can’t be denied:

One of the more certain ideas on China hinges on its appetite for something very basic: food. We’ve talked a lot about the world’s growing appetite for food and China’s role in that. The shifting diets…the straining of water resources…the diminishing acreage of arable land…