German Supreme Court Vote & Italian Parliamentary Debate Will Decide the Fate of the European Union This Week

Written by Al Martin Monday, 05 September 2011 00:15

alt(9-4-11) The Dec. Long Bond contract had a stellar move higher, off the back of Friday’s poor unemployment numbers. We see both the Sep. and the Dec. contracts now trading solidly above 140. We are looking to buy the Dec. contract again in Sunday night trade on any pullbacks to retest 140.00.

The Sep. Dollar contract – good close at 74.70 in Friday’s session. We were consistent short sellers of the EUU’s at 142.50 as the level failed to hold. Euro looks like it’s coming down for a test of the 1.41 area in early week trade.

The Oct. Oil contract also backed off in Friday’s trade. Our 87.99 and 86.99 stops were both hit. We covered the Oil on the test down at 85.80. Oil lifted a dollar off lows by the close, but definitely looks lower in early week action.

Dec. Gold, which we had warned would rally by week’s end, indeed had a good close at 1884.60. We would expect the 1900 level to be retested as early as Sunday’s overnight action – as the European situation continues to unravel.

Read more: German Supreme Court Vote & Italian Parliamentary Debate Will Decide the Fate of the European Union This Week

 

The Dec. Gold Contract: Trade of the Week

Written by Al Martin Sunday, 28 August 2011 21:16

alt(8-28-11) The Sep. Long Bond contract continued to be a trade from the long side on dips. We had bought the contract on our 137.00 buy stop in Thursday overnight trade. Our 138.00 sell order was hit in Friday’s action as the Bonds were propelled higher by worse than expected GDP numbers.

 The Sep. Dollar contract fell back below 7400, coming back into our 73.65 preferred buying range. Indeed we looked to buy the Dollar at that level.

 Oct. Crude Oil rallied once again, although we were consistent short sellers on moves above 86.00 as we had been throughout the week. We still believe the Oil is coming down to trade in a new 75.00 – 80.00 range.

 The Dec. Gold contract was the Trade of the Week. When the pull-back to 1700 held in Thursday’s session, we had bought 10 lots at 1708 and another 10 lots at 1705. We had continued to buy the Gold up. We had put out an emergency flash recommendation Thursday night with our belief that the Dec. Gold contract would move back above 1800 in Friday’s session, which is in fact what happened.

 We think the Gold rally will pull back for a retest of 1800, but continues to look good to go to the long side with no relief in sight for equities. (NOTE: Insider Intelligence also maintains a teleconferencing service advising traders in real-time trades. For more information, email us at customercare (AT) InsiderIntelligence.com)


Read more: The Dec. Gold Contract: Trade of the Week

 

End of Week Volatility Creates More Trading Opportunities

Written by Al Martin Sunday, 21 August 2011 22:04

(8-21-11) In overnight Thursday trade action, our 139.08 standing buy order was filled once again in the Sep. Long Bond contract. We were sellers at 140.08 in Friday’s day session, Sep. Long Bonds now reaching a new contract high, establishing a close above 140 for the first time. We are still trading the Bonds from the long side – as long as fear persists.

The Sep. Dollar contract moved up to our 74.30 - 40 target. The Dollars we bought at 73.90, we sold on our standing order at 74.40. We would look to continue to buy the Dollar on dips below 74.00.

Dynamic action in the Sep. Crude Oil contract. We were sellers on our 84.99 sell stops in Friday morning action. We took $2.50 out of the contract by the end of the day. The contract is now closing below $83 once again. We would expect another test of the 79.85 overnight close, as seen in Thursday’s session. We have no doubt that the Oil is going to start to trade in the new lower band.

Dec. Gold contract – explosive moves in Thursday and Friday’s trade. Once again we were buyers of the contract above 1800. The contract provided excellent shorting opportunities when the contract got tired above 1870 in Friday's trade. Our final trade was in fact shorting the contract at 1870, covering at 1850 in late session trade. If the Gold can continue to hold 1850 level, look for 1900 to be reached in early week’s trade.

Read more: End of Week Volatility Creates More Trading Opportunities

 

Equities & Bonds Both Rally; One of Them Has To Be Wrong

Written by Al Martin Sunday, 14 August 2011 20:49

alt

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(8-14-11) We had bought the Sep. Long Bonds on the Thursday close at 135.07. We were sellers at 136.07, our standing order in Friday\'s trade. We would note that even though equities rallied Friday, so too did the Bonds. One of them has to be wrong. Next week will tell.

 The Sep. Dollar Index continues to trade well around the 74.70 level. We continue to like buying the Sep. Dollars at this level, selling on rallies back to 75.30.

 The Sep. Crude Oil contract was the strongest commodity contract on the board in Thursday and Friday trade. We were sellers of the contract Friday on our standing orders at 86.00, covering at 85.40 on the close. Although the Oil does appear to be strong, it is significantly overbought relative to the Copper in the Oil-Copper spread.

 The Dec. Gold contract – we were consistent sellers of the contract above $1760, taking out $10-20 scalps. We would continue to look at rallies above $1760 as fresh shorting opportunities.

Although Oct. Sugar strengthened in Thursday and Friday’s session, we note that the Sugar is still being turned back on rallies above 28 cents. We continue to be sellers of the Oct. Sugar at 28.00 or better, taking 30-50 point scalps.

Sep. Orange Juice, whose back has been broken, as we reported 2 weeks ago, came down to trade under 1.60, finally prompting some short covering lift. However this is no more than short covering, and the contract will become a sell again on any moves back to 1.70.

Sep. Lumber – we reminded traders of the 216 support area. Indeed mid week the contract did trade down to 215 on intra-day basis before rallying, creating a buying opportunity on the hold at that level. We were buyers of the contract at 217, selling the contract at 224 in Friday's close. However we would look at any rally back to 230 or better as a fresh shorting opportunity.

Grains continue to be well-bid late week. Our 7.0025 buy stop in the December Corn was hit Friday, and we were sellers at 7.14 on the close with our 20 lot order, taking 13 cents out of the contract, basis our 7.01 fill. Beans are now overbought. We overbought above $7 and we continue to look at the Beans as a short trade at current levels.

Sep. Silver continues to drag, relative to the Gold. We were consistent short sellers on rallies above 39.20 and would continue to look at the 39.20 level or better for fresh shorting opportunities.

We had covered our Sep. Platinum on our standing order at 721.50, taking $100 out of the contract. We hope that all of our readers did the same.

Sep. Copper – we were sold several times on our 3.9995 sell stops in Thursday’s trade, taking 3-4 cents out of the contract twice. We like selling the contract in the 4.05 area, as we did throughout the week.

The Sep. Coffee finally found support in the 2.33 area, after coming down to nearly touch its yearly low. However we think the Coffee is now a short again at current levels.

Sep. Cocoa, which broke in line with our prediction, has rallied back above 2900. Action is tepid, however, and we like selling the contract on any further moves to 2920.

Dec. Cotton also had a limit bid move in Friday's session back above a dollar. We continue to like the 1.03 - 1.05 area for fresh shorting opportunities.


 

Late Week News Flows Create Volatility Not Seen Since 1929

Written by Al Martin Monday, 08 August 2011 00:52

(8-7-11) The US Treasury Bond contract, which had a high-low spread in Thursday-Friday session of 5-1/2 points, has been unprecedented at any time since the issuance of the 30-year Long Bond began in 1795.

Also this is volatility not seen since the US Treasury issued its 30-year benchmark Bond, its first issue on May 15, 1795, and not even during the Crash of 1815 and the after-effects of the War of 1812, when the value of US Treasury Bonds was cut in half, not even in that period have we seen such volatility.

It was a 'fear bid' trade which drove the Treasury Bonds. However with the Treasury Bond sell-off Friday, which will continue Sunday night to create a 'buy the rumor - sell the fact' trade, as the S&P downgrade was widely expected. Further Moody's and Fitch's have said they will not issue downgrades of their own. It must be remembered however that Moody's and Fitch's are much more subject to political pressure in Washington than S&P. We will be looking to buiy the Sep. Long Bond Contract at 131.16 and looking to take additionally a half point out of the contract.

Friday's action will also create further downward pressure on the Dollar Sunday night. We would look for the Dollar to become a buy once again in the 7370 area, where it has been consistently a buy. We will be looking to short the cash Euros on any move above 1.4400.


Read more: Late Week News Flows Create Volatility Not Seen Since 1929

 

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