Fed Sugar-High to Continue to Taper
Written by Al Martin Sunday, 22 September 2013 21:41
(9-22-13) We were buyers once again in Thursday’s session of
the Dec. Long Bond contract on our standing order at 131.02.We were able to
sell the contracts on the close Friday at 131.20. We continue to believe that
Bonds to be a buy on dips, with the Fed action of no “taper” for now,
continuing to be supportive of Treasury Long Bonds.
Coming Week’s Trade Replete with Shortable Opportunities
Written by Al Martin Monday, 16 September 2013 18:06
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(9-16-13) Last week’s action in the December Long Bond contract, created by a series of the best Long Bond auctions that the US Treasury has had in years, again creates fresh trading opportunities on the long side. We were consistently buying the Dec. Long Bonds on dips down to 128.28 in mid-week trade. We accumulated a 32-lot position which we sold on our standing order at 129.28 in Friday’s trade action. Bonds have now twice been turned back from the 130 area. However we think the Bonds will have further to go depending on Fed taper action in the coming week’s Federal Open Market Committee meeting. The Dec. Dollar contract is also largely dependent on coming week’s Fed action. We continue to short the Euros on moves above 1.33, covering on dips to 1.3270. We also continue to short the British Pounds on moves above 1.5820, also covering on dips back to 1.5785.
The Oct. Oil contract also moved higher last week in line with our expectation. We do not think the Oil will get back to recent highs above 110, unless something changes in the Syrian situation. We think rallies back to 108.50 are now shortable.
We were short the December Gold in late week action. The Gold came down to test the 1307 area before late short covering brought the Gold back failure to break 1300.We think the December Gold contract at 1325 or better is the best shorting opportunity of the coming week’s trade.
The October Sugar contract fell back in late week action in line with our previous week’s prediction. We told you the current shill in the Sugar would begin to run out of steam in this week’s trade. We were consistently selling the Sugar at 17.30. We have now covered, taking 20 ticks out of the contract. However we feel the Sugar will fall back below 17.00 in the coming week’s trade.
Nov. Juice – we had been consistently selling in the 1.39 area covering on 4-6 cent dips. We were once again short the Juice at 1.40. We believe that the Juice is very much weather-related to central Caribbean storms, the effects of which we think are being overblown.
The Nov. Lumber contract squeezed shorts in Friday’s action, ourselves included. However we sold again limit bid close. We think the Nov. Lumber is extremely overbought at current levels.
Last week’s double USDA crop reports presented prime shorting opportunities in the Nov. Bean contracts. We continue to sell on the cap at 14.00 which is the current price in last week’s trade, ultimately allowing us to take an aggregate total of $1 out of the Nov. Bean contract. We continue to look at that 14.00 area as a shorting zone.
Although Dec. Silver did not perform as well as the Gold thanks to the drag on it by the sloppy action in the Copper, we nonetheless believe that the Dec. Silver is a short at 22.30 or better.
The Dec. Copper contract, which we had warned of severe overvaluation fell back below 10 cents in last week’s trade. Although the 3.20 support level is being held for now, we think that support level will give way.
Dec. Coffee continues to want to trade around the 1.20 area. However the Coffee has been unable to advance back to 1.2150, nor should it be given current Coffee fundamentals. We continue to short the contract on moves up to 1.2050 or better, covering on penny dips.
The Dec. Cocoa contract -- subject to 4th quarter supply/ demand fundamentals which are invariably bullish. We believe however that moves above 2600 is overdone,
Dec. Cotton continues to languish. Although rally efforts now underway after the hold of 82.50, we would note that the Cotton has been a bit unable to get above 85 cents. If Cotton continues to be unable to get above 85 cents, we would establish a fresh short position.
Keep Shorting the Spoos on Rallies
Written by Al Martin Sunday, 08 September 2013 22:54
(9-8-13) In late last week action we saw the Dec. Long Bond
contract was once again a buy on the dip down to 128.12 where we had our
standing buy orders. We were able to take ¾ of a point out of the trade by the
close Friday. Bonds remained oversold due to "Taper" jitters. However we
continue to trade the Bonds from the long side on dips. The Sep. Dollar
contract continued to vacillate in the 82.00 – 83.00 range. However we still
expect the Dollar to work higher, as we continue to short the Euros and Pounds
on rallies above 1.32 & 1.55 respectively.
Watch Out for “Syrian Fear Bid” Reversal
Written by Al Martin Sunday, 01 September 2013 23:56
(9-1-13) With no action on Syria over the weekend as had been previously anticipated and action looking to be several weeks away, we would expect some reversal in so-called Syrian Fear Bid trade as occurred throughout last week. Accordingly we expect that the Sep. Long Bond contract could back off. We were sellers again at 133.07 after having been long in Thursday and Friday’s action. We expect however that Sunday night we will see prices soften under 132.24, possibly down to 132.16, allowing for a quarter point trade.
Bonds Acting Better as Spoos Remain Under Pressur
Written by Al Martin Monday, 26 August 2013 00:06
(8-25-13) We saw a continuing good lift off the recent lows in the Sep. Long Bond contract, as the 30-year cash bonds got turned back from the 3.93% yield handle, We saw substantial buying in the cash 30s, when yields rose above 3.90%, giving traders some idea where demand is in the instruments. Bonds have now had more than a 2-handle lift off of recent lows. We would look to potentially short the Bonds on moves above 132.08.
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