Increasing Volatility Helps US Treasury Long Bond & Gold

Written by Al Martin Sunday, 25 January 2015 23:28

 (1-25-15) We continue to trade the March Long Bond contract from the long side. We were consistently buying throughout the week on our standing orders at 148.16, selling on moves up to 150.00. We were able to get that trade off 3 times during the week. We like buying the Long Bonds on dips. Long Bonds certainly will react positively over the weekend with a communist victory at the polls in Greece.

Read more: Increasing Volatility Helps US Treasury Long Bond & Gold

 

Market Volatility To Increase Pending ECB Decision/ Greek Election

Written by Al Martin Sunday, 18 January 2015 22:53

(1-18-15) Later this week we will have the Greek election followed by Mario Draghi’s unveiling of a new QE program for Europe. Much anticipation, likely disappointment to come. Continue to trade the March Long Bond from the long side on dips as we continue to do. We are currently long the Bonds from 149.08 and would expect a move back to retest the 151 highs in the coming week’s trade

Continue to short the Feb. Oil on moves up to 49.00 or better, covering on $2 dips. Recent rally in the Oil now over. We were expecting now lower lows to be achieved by the end of this week.

Gold continues to be in La-La Land. No justification whatsoever for move up in Gold – other than tangential fear bid. We think the Gold is shortable at 1280 or better.

Read more: Market Volatility To Increase Pending ECB Decision/ Greek Election

 

Bounce in Spoos Creates Trades Across the Board

Written by Al Martin Sunday, 11 January 2015 23:39

(1-11-15) Last week we finally saw a bounce after 5 losing sessions in the Spoos. We were buyers of the Spoos finally at 1990 after having covered our shorts on the move under 2000. We rode our longs up all the way back to the 2040. We think that the Spoos now are overbought once again and are sellable at current levels. The bounce in the Spoos also created downward pressure on the March Long Bond contract. Our standing orders at 146.08 were hit midweek, allowing us to take nearly 2 whole points out of the contract by Friday’s session, as the Bonds began to come back in that the factors propelling the Bonds now make them more immune to declines in the Spoos.

Read more: Bounce in Spoos Creates Trades Across the Board

 

License To Print Money in Oil & Gold Continues

Written by Al Martin Monday, 05 January 2015 00:57

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(1-4-15) We see the March Gold contract continuing to trade in the 1170-1200 zone. We have been consistently shorting the contract on rallies back to 1200, covering on dips to 1180.  We had been buyers at 1175, selling at 1195. We continue to like that trade. We think the recent upticks in Gold are overdone with both Dollar and Bond strength being counter-indicators for the Gold.

The Oil – we continue to short on $1-2 rallies off of preceding day lows. Oil particularly volatile in Friday’s thin session. We were sellers once again at 53.85, covering at 52.35 in late session action. We continue to maintain short positions, doubling up and covering  half down, so we are continuously short the Oil and in the money. Hard test at 5200  in the Feb Gold contract on Friday. We would expect that to be retested and breached in Monday’s session.

Substantial cash buying in the 10 and 30 year Treasury Bonds, lifting futures in Friday’s trade as European and Japanese yields reach all-time lows, making our Treasuries look good. This is not a fear bid trade, but is much more a Dollar-US Treasury Bond trade wherein  European and Japanese investors want to hold long Dollars and long US Treasury Bonds to capture their significantly higher yield visavis their own markets.

Soft and tropical commodities continue to fall in line with our previous week’s suggestion. We were short the March Sugar on our 14.49 sell-stop in Friday’s session. We filled m.o.c. and covered at 14.17. We would expect a hard test of 14 cents in the coming week’s trade.

We did see some pickup in the Juice contract as the March Juice failed to attract fresh sellers under 1.40. We think however that this was just a short covering rally and would look to sell the March Juice on any continuation back to 1.45.

The March Lumber contract – still coming under pressure We are still short from 341.60  but would look to cover if it holds in the 320 area in Monday’s session.

Grains continue to move lower. March Beans coming down almost every day last week where markets were open. We would expect a hard test of $10 in Monday’s trade.

We had warned of lower prices coming in the March Wheat contract which was severely overbought above $6.40. We have been trading the contract from the short side for the last 2 weeks. Again our 5.8975 sell stop was hit in Friday’s trade, allowing us to take 8 cents out of the contract yet again. We think the Wheat could still come down to the 5.60 area to revisit its previous lows. We had warned the March Corn contract would break $4 in last week’s trade. Indeed we did see the break midweek, wherein our final 3.9975 sell stops were hit. We took 4 cents out of the trade in Friday’s session but we expect the Corn to again move down another 20 cents.

The March Cotton-- all finished to the upside for now. We had warned that the Cotton would break 60 cents in last week’s trade. Indeed in Friday’s action we saw the Cotton under 60 cents again. We expect the Cotton has another 2 cents to go downside in the coming week’s trade.

The severe overvaluation in the March Cocoa contract -- now correcting with a test of 2900. We would expect 2900 to give way and the Cocoa to come down to 2850.

We also warned the March Coffee would come down for a hard test of 1.60 Indeed we saw a test under 1.61 in Friday’s session. We think the Coffee also has lower to go, next downside target being 1.55.

March Silver contract continues to be overbought relative to the Gold. Hence the more severe downside condition of the Silver when Gold gets taken lower. We continue to short the Silver on moves to 16.10 or better covering on dips down to 15.70. We think that the Silver ultimately works down for a test of 15.00.

March Platinum contract – we continue to short on moves to 1220, covering on $20 dips. We continue to like that trade. Also Palladium – we continue to short on moves above 800 covering on $10-20 dips.

The March Copper contract – we continue to look to short on rallies back to 2.85, covering on 5 cent dips.

 

Spoos in La-La Land as Rest of Market Comes Back Down to Reality

Written by Al Martin Sunday, 28 December 2014 23:33

 (12-28-14) Spoos continue to advance throughout the holiday-shortened week. We would expect them to advance to the end of the year, establishing a close of 2100.  However after the first week of January we expect the spoos would become shortable again.

Read more: Spoos in La-La Land as Rest of Market Comes Back Down to Reality

 

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