Silver Still Oversold Relative to the Gold
Written by Al Martin Sunday, 06 March 2011 23:42
(3-6-11) Despite a growing bearish sentiment in the Treasury Bond market, we were nonetheless buyers of the June Bonds early Friday morning, as they backed off sharply on the better-an expected unemployment data. We bought the Bonds on our standing order at 118.08 and were sellers late session at 119.08, taking one whole point out of the contract. We see that once again the Bonds were able to establish a good close on Friday. We think the Bond naysayers are wrong.
Global Volatility Roils Planet's Capital Markets
Written by Al Martin Sunday, 27 February 2011 22:35
FREE COLUMN THIS WEEK -- SUBSCRIBE NOW (2-27-11) The March Long Bond contract continued to see aggressive bidding late week after an unexpectedly good seven-year auction. Bonds continue to rise, despite supposedly good economic numbers coming off US and global calendars, showing supposed increase in economic growth,. We continue to trade the March Long Bonds on the long side and were consistent buyers on dips back to 121 late week. Our final trade on Friday was buying the Bonds mid-day at 121.15, selling on our standing order of 121.27. Without any fresh supply on the horizon, Bonds have further to go.
March Dollars continue to fall back, although now being held and generating bounces off the 77.00 level. The Dollar has come down too much too fast. The Euro is vulnerable to further declines in this 138-139 area. We think the Dollar is nearing a near-term bottom with recent geopolitical events now having caused the Swiss Franc to breach our shorting target.
There was wild action late week in the April Crude Oil contract, wherein we saw our 101.01, 102.01 and 103.01 buy stops, all run in the same session, taking out more than $16 aggregate out of the contract. We were short sellers as the Oil came back under $100 and have been covering on dips back to $96.50. We think the Oil is now range-bound, with support at 95.00 and resistance at 100.00.
April Gold picked up late week to retest the $1415 area. However we think the Gold is rich up here, and there are sellers waiting to sell the Gold when it comes back under 1400.
The May Sugar contract – great volatility in Friday’s session with our 28.01 buy stops hit, allowing us to take 75 ticks out of the Sugar. Sugar is due for a technical bounce. However supply fundamentals continue to turn more bearish. We would look to be sellers of the contract on any test of 29.00.
May Orange Juice -- continued good scalping at 1.75-1.80. We have been consistently buying the contract on moves below 1.75, selling at moves just above 1.80. Any further moves above 1.80 would represent a fresh shorting opportunity.
We had warned that the May Lumber contract would come down. Indeed we saw the limit down session mid-week. We expect that the Lumber will come down for a test of 300.
Wild action in the Grain complexes late week as ETF transactions tore up markets. We continue to like shorting the Wheat on rallies, and indeed sold the May Wheat contract at 8.11 on the close Friday.
Dynamic trading opportunities in Silver as Thursday-Friday action saw intraday rangers of as much as $2.00 . Silver above $33 is a dollar overbought, relative to current Gold prices. We think the Silver buying plumbers will take a bath once again.
There was a good pickup in May Copper contract Friday and reversal off a tset of lows 4.2480 area engendering a solid 10 cent bounce. The Copper is now overbought at the 4.35 level. We are sellers in this area.
The May Coffee contract also picked up after holding 2.64 in back-offs on Friday. However the Coffee is once again rich. We would be sellers on any retest of 2.70.
The May Cocoa – good shorting opportunities mid to late week, as rallies to 3600 were turned back. Late week 3601 buy stops proved to yield consistent fruit. However the Cocoa above $3600 is very rich, relative to its underlying supply/demand fundamentals.
After having seen three consecutive limit-down days in the May Cotton, we saw a short covering rally take the Cotton limit bid. We were buyers on our 180.05 buy stops Friday, selling at limit bid m.o.c. We would look to short the Cotton again on moves back to 190.
Cotton Establishes Key Reversal
Written by Al Martin Sunday, 20 February 2011 20:11
(2-20-11) Late week we saw continued and surprising strength in the March Long Bond contract. We continue to be buyers of this contract at 118.24-118.28 and sellers on rallies up to 119.12 or better. That is a trade that has worked consistently since Wednesday night. Bonds have held firm, thanks to a fear bid, despite next week’s supply, although we do think the Bonds continue to be overbought above 119.
Overbought Markets Begin Correction
Written by Al Martin Sunday, 13 February 2011 21:10
(2-13-11) We bought the March Long Bond contract early Friday session at 118.04 and were sellers at 118.16 on our standing orders in the afternoon session. You would note that despite easing of Egyptian tensions, the Long Bonds continued to rally – with no apparent flight-to-quality bid. We think this recent talk of inflation has pressured Bond prices excessively and that the Bonds are due for a bounce back to 119.
Turbulent Week Marks Seminal Changes in Commodity Contracts
Written by Al Martin Monday, 07 February 2011 00:16
(2-6-11) The March Gold contract finally picked up late week, after a move above $1340 sparked technical buying. However we think this contract will be a short, if it is able to get back to 1360.
March Silver contract did trade back above $29 in Friday’s trade. However the Silver looked weak and will continue to respond to the Gold. Next spot up for selling -- 29.20 for a 10 cent scalp.
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