Subscribers Report Record Profits from Long Bond Positions
Written by Al Martin Sunday, 03 June 2012 23:58
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(6-3-12) We continued to trade the June Long Bond contract from the long side all of last week, as we have consistently done for the past seven weeks. We were buyers once again of the USM contract in Thursday morning trade on our standing orders at 148.09. We held the contract all the way to the end of trade Friday, selling on the 152.30 closing bid. We had warned in our previous week's missive that we suspected the Bonds would break 150 in this week’s trade. And indeed they did so in spades.
We would expect the Bonds to ease back in early week trade, as market participants feel that it's increasingly likely that Bernanke will make stronger representations about a potential QE 3 in his Thursday address.
The June Dollar contract which we had warned would break out above the 82.00 level, indeed broke out to test the 83.50 resistance area in late week trade. There is still record foreign demand for US Dollars. We expect that the Dollar will move higher and that we still expect the Euros to come down to 1.20 in the near term.
We had warned that the July Oil contract would come down further. Indeed our near term $80 target is still in sight with the contract dropping another $3.25 in Friday's trade. We had been short the contract since it came under $90 last week and are looking to cover the contract on a test of $81.
Fear bid continues to come back into the August Gold contract. Indeed we had bought the contract when it broke out of $1592 in Friday's session. We were sellers right on the close at $1625. The level of fear bid coming back into the Gold bespeaks of the global economic strains currently being experienced behind the scenes and does not augur well for the equities.
The SPM contract -- we had sold the contract again in Thursday night's trade on our standing order at 1316 which we held and covered all the way down to 1276 in Friday’s trade. The contract has now broken all support levels down. We expect ultimately that the contract will come down to test 1200 in the coming summer swoon, providing no fresh QE 3 from Bernanke and Co.
The July Sugar, as we warned, continued to move lower throughout the week. We had posted warnings that the contract would break 20 cents. Indeed after the contract broke 20 cents, it never gave you a chance to short it again back above 20 cents. The contract fell late session Friday for a test of 19 cents. We still believe the Sugar has lower to go as global surpluses continue to build.
Late week short-covering action in the July Orange Juice lifted the contract back to the 1.12 area, now trading about 9 cents off the recent lows. However we had shorted the Juice again on our standing orders at 112.30 and will be looking to take 4 cents out in the coming week's trade.
The July Lumber contract -- we have sold midweek on our standing order of 293, covering on Friday's 281.40 close The Lumber has historically been turned back on rallies above 290. We think the Lumber remains incredibly overbought at current levels.
Continued good selling action in the July Soybean contract as the 13.70 previous support area gave way. We think the Beans are still good down to 13.20.
The July Silver contract still being better supported than the Aug. Gold contract. We were buyers of the Silver on our 28.01 buy stops in Friday's trade, selling on the close at 28.50. However we also believe now that the Silver is once more overdone.
July Copper continues to hold the 3.30 level, a large support area in the Copper. We feel however that this area will give way in the coming week’s trade.
We had warned of further selling to come in the July Coffee. Indeed Coffee did break the 160 support area in Friday's trade, establishing a 157.50 close. Coffee still looks lower as global supplies continue to build.
We had suggested that the July Cocoa be continuously sold on rallies above 2100. Indeed we had sold the contract in Thursday's overnight trade on our standing order of 2108, which afforded the last opportunity of the week to sell the Cocoa. We covered the contract on our standing order at 2058. We still believe the Cocoa will come down to test 2000 in the near term.
The July Cotton, which we had recommended selling on any return back to 73.00. Indeed the cotton was turned back on the retest of 73.00. We were sellers at 72.59 covering on our standing order at 68.59 in Friday’s trade. We had warned that the Cotton had lower to go. With 70 cents now having given way in the Cotton, we think 65 cents is now in the cards.
Trading Becomes Easy as Short Sellers Continue To Dominate Markets
Written by Al Martin Tuesday, 29 May 2012 00:24
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(5-28-12) We continue to trade the June Long Bond contract from the long side, with the contract having established new contract highs above 149 in the previous week’s session. We are now trading the Bonds from the long side again on tests down to 147.02.
The June Dollar Index continues to move irregularly higher. We expect 8300 will be tested in the coming week’s trade, as we believe that the 1.2500 area in the EUM contract will not be held.
July Oil – we continue to look to sell the Oil on rallies up to 91.80 or higher, as we believe that the contract will establish lower lows in the coming week’s trade.
Although fear bid has returned into the June Gold contract, we continue to look to sell the Gold contract on moves back above 1580. We did so in Sunday night’s trade. We don’t think the Gold is ready for a push back to 1600 just yet.
The July Sugar contract broke 20 cents in last week’s trade, as we told you that it would in our previous week’s missive. We were short the contract from 20.60, covering in Friday’s action on our standing orders at 19.60. We will now look to sell the July Sugar on any retest of 20 cents.
The July Orange Juice contract continues to hold 1.00, although we continue to be sellers, on moves to 1.09 or better, covering on 2-3 cent dips.
July Lumber also moved above 290 for the first time, as fresh short covering came into the market late week. We had sold the contract in Friday’s trade at 290 and are looking to cover on a pullback to 286.
The Grain contracts continued in their irregular recovery from the USDA report. Wheat continues to move higher based on continuing crop diminishment prospects in the Ukrainian summer crop. However we think the Wheat at 6.80 is overdone. Beans, we had told you, would move back below 14.00 in the coming week’s trade, back down for a test of that 13.70 area. Indeed the Beans fell back to 13.68 before rallying again. We were buyers of the Beans at 13.70 and would be looking to sell the Beans on any move back to 14.00. Also July Oats broke hard last week with the $3 level finally being given up. We have been short the Oats from 3.40, finally covering at 2.96 in Friday’s close, although now the Oats look lower.
July Silver continues to outperform the June Gold contract. However we continue to short the contract on moves up to 28.70 or better, as we believe the Silver is overdone at that level.
Palladium and Platinum continue to move lower with continued liquidation in the July Platinum contract. Despite efforts to shill the contract, we believe the 1400 level will be tested in the July Platinum contract in the coming week’s trade.
Good short covering rally in Sunday night holiday session in the July Copper, testing the 3.49 area. However we think that the Copper is overdone and would look for the contract to fall back for a test of 3.40 in the coming week’s trade.
July Coffee breaking the previous 1.67 support area in this week’s trade. We were consistent sellers of the contract once again just above 1.70. We continue to believe that the Coffee has lower to go.
July Cocoa indeed broke the 2100 level in late week trade, as we promised you it would in our last week’s missive. We were short the Cocoa on Thursday at 2132 covering at 2098 in Friday’s intra-day test. Although the Cocoa held a 2100 close, we suspect the Cocoa will come down to test 2000.
July Cotton – we had warned of lower Cotton prices. Indeed two limit-down moves early week forced the contract down for a test of 70 cents, which is the level we suspected the Cotton would fall back to, prompting a short covering lift. We are now looking to short the Cotton on any move above 74.00.
We had sold the June Spoo contracts on our standing order of 1327 Monday morning, covering on our standing order of 1317. We sold the Spoos again at 1328 in Sunday night’s holiday session and would be looking to cover on a retest of the 1315 area.
Summer Swoon Begins as Hopium Fades
Written by Al Martin Sunday, 20 May 2012 23:43
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(5-20-12) Last week we had recommended trading the June Long Bond contract from the long side. Indeed the contract pushed up into new contract highs above 148 in Friday’s trade. We were consistent buyers of the contract on overnight dips throughout the week, selling on intra-day rallies. The contract looks headed higher, despite record low yields.
We had warned that the June Dollar contract would move above its 80.80 resistance level, up to test the 81.35 area in late week action. Indeed the contract moved higher and fell back to 81.26 in Friday’s late day trade. However we feel the contract is now good for a further extension to 82.00.
The June Crude Oil contract – we had warned the contract would breach the $92 support level. Indeed we saw the contract go out at 91.31 in Friday’s session. We had been shorting the contract throughout the week, covering on dollar dips. We now believe that the contract will come down to test $90 in the coming week’s trade.
The June Gold contract finally caught a fear bid as midweek retest of 1530 was held. We were buyers again at the 1560.10 buy stops, taking $30 out of the contract by the close Friday. Gold is now at its 1592 resistance area. We would expect however that the Gold will likely fall back on retests of 1600.
The July Sugar contract continues to hold 20 cents. Although we continue to short the contract on rallies back to 20.70 or better, covering on 30-50 point dips, we still believe that Sugar has lower to go.
Fresh contract lows in the July Orange Juice. We had warned that the Juice was coming down for a test of the Dollar area. With Juice going out at 1.0220 area in Friday’s trade, we have no doubt that $1 will be tested in the coming week’s trade, as global inventories of FCOJ continue to build.
July Lumber – we were consistent short sellers at 286 and 287 in late week trade, covering on $2-4 dips. We believe that this late week short covering in the Lumber will give way and that the Lumber will come down to retest the 280 area in the coming week’s trade.
There was continued liquidation in the July Soybean contract in line with our predictions. We had warned that the contract would come back down for a test of $14. Indeed we think that 13.80 is in the cards in the coming week’s trade.
Wheat is also now dramatically overbought with July Wheat approaching $7. We are looking to sell the contract on any move above $7 in Sunday night’s trade.
The July Cotton contract is steadily declining, although short covering in late Friday night’s session led the contract back to a 78.00 close. However we think the Cotton is coming down for a test of 70 cents.
July Cocoa continues to be a short sell on moves above 2300 in line with our previous week’s predictions. Although the Cocoa continues to hold 2200, we think the 2200 area will be breached in the coming week’s trade.
We were sellers of the July Coffee once again in Thursday’s and Friday’s trade on moves to 1.81, covering on 2-3 cent dips. The 1.81-1.82 now appears to be the prime shorting zone in the July Coffee. We still believe the Coffee is coming down for a test of 1.70.
In the July Copper contract, Copper continually fell back throughout the week in line with declines in other industrial metals, as global economic growth continues to slow. We would suspect that the 3.38 area in the July Copper will be tested in the coming week’s trade.
July Platinum continues to hold the 1450 area. However we believe this support level will give way in the coming week’s trade.
We continue to short the July Silver on moves back now above 29.00. We think the Silver is coming down for a test of the 26.00 area.
The Short Trade Continues to Shine
Written by Al Martin Tuesday, 15 May 2012 03:22
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(5-14-12) Last week we saw the Bonds continue to be a trade on the long side, as we had predicted in our previous week’s missive. Once again in Friday’s session, we were buyers of the Bonds overnight at 144.26. We were sellers on our standing orders at 145.02 to take a quarter point in Friday’s day session trade. Bonds ran up against resistance now at 145.03. However we expect that the 146.1`7 continupus contract high will be reached in early week trade
The June Dollar index continues to gain strength about 80.00, now up against nce at 80.40. Next target in the June Dollar contract is 80.70.
The June Crude Oil continues to fall back. We are consistently selling the contract on rallies back to 97.00 as we did all of last week. We would expect the Crude Oil contract to breach the 95.00 support level in the coming week’s trade.
The June Gold contract continued to act sloppy. Although holding the 1580 support level for now, we do expect this level to be breached down to 1560 in the early week trade.
July Sugar continues to hold the 20 cent support level, working lower late week as long liquidation forces the contract down on rising global Sugar stocks. We continue to expect 20 cents to be breached.
July Orange Juice contract back above 1.20 in Friday’s trade on end of week short covering. However we still believe this contract has lower to go and will come back down to 1.17 in the coming week’s trade.
July Lumber – we continue to sell the contract at 286 and better, covering on $5 dips. We continue to believe this contract will come down to retest the 263 contract lows.
Our short July Soybeans position gave up nearly 50 cents in Friday’s session, For the last three weeks we have been consistently warning of dramatic overvaluation in the July Bean contract, we believe the beans will come down for a test of $14 in Sunday night’s trade.
The July Silver contract is now looking weak at 29.00. We continue to sell the contract at 29.00 and better Although 28.60 is holding for now, we suspect this contract has lower to go.
July Platinum also busted through the 1500 support level in Thursdays trade, triggering our 1499.90 sell stops which we covered at 1471 in Friday’s trade, taking $28 out of the contract. Platinum looks lower.
In the June Palladium contract, we would expect the 600 support level to give way, a large number of sell stops just underneath. We’re expecting the contract to move down to 580 in the coming five sessions.
July Copper continues to weaken as global Copper surpluses continue to build. We would expect 3.60 to give way. A large number of sell stops underneath would suggest a first move down to 3.57.
July Coffee – end of week short covering continuing to hold Coffee above 1.75 on a closing basis. However we believe the Coffee will come down for a test of the 1.72 in the coming week’s trade.
July Cocoa continuing to hold 2300 closes. We have been consistently selling the contract on moves to 2340 or better, covering on $20-50 dips. We would expect this contract to come back down below 2300 in Monday’s trade.
July Cotton was hit hard by last week’s USDA crop report which shows domestic Cotton production continuing to rise as global Cotton demand continues to fall. Our 83.99 sell stops were hit in Thursday’s trade. We covered on the close Friday, taking 5 cents out of the contract. We believe that Cotton will trade down to 75 cents in the coming week’s trade.
July Corn also continues to fall back. We had warned of severe overvaluation in the July Corn for the last three weeks. Our 5.99 sell stops were triggered in mid-week trade we have yet to cover.
In the Spoos, we believe that the June Spoo contract will come down for a test of the 1540 support level in early week trade. We think this support level will give way.
Spoos Fall & Bonds Rally in Line with Our Predictions
Written by Al Martin Sunday, 06 May 2012 23:44
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(5-6-12) Last week we saw the June Spoo contract come down in line with our predictions. We had sold the contract in Thursday’s overnight trade at 1402, which was reached twice on a 1402-03 spread. The contract fell back 40 handles in Friday’s aftermarket trade, with the final trade coming on the 4 o’clock bell, selling the Spoos at 1368 and covering them at 1363. We covered our short Spoos on the final bell Friday at 1363 and would be looking to sell them again on any move back to 1380.
Also in our previous week’s missive, we warned that the June Long Bond contract would rally above its previous week’s 143 high to test the 144.00 area. Indeed in Friday trade we saw the June Long Bonds trade up to 143-7/8 before settling back to a 143.23 close. Bonds still look higher.
We had also warned of overvaluation in the June Crude Oil contract, maintaining our stance that the contract would come back down for a retest of 100.00. In fact on Friday, the contract simply fell apart with fresh sell stops, including our own, at 99.99 being hit. We took a record $6 out of the June Crude Oil contract in the six trades we had in the Friday session. We think that the Crude will come down for a test of its near term low at 97.20] as early as Sunday night.
We had warned of sloppy action in the June Gold contract. We had been consistently shorting the contract on moves to 1660 or better throughout the week. The contract finished out at 1642.60. We believe this contract will come back down for a test of 1620 in the coming week’s trade.
Also we had warned of near term overvaluation in the July Sugar contract. We had been consistently shorting the contract above 21 cents in early week trade. The contract went out at 20.61 in late week action. Although the contract is holding test down to the 20.30 area, we think that the 20 cent number will be breached in the coming week’s trade, as fresh shorts pile in.
The July Orange Juice contract also came down in line with our predictions. We were sellers of the contract throughout the week. We had warned of severe overvaluation in the Orange Juice complex. Indeed we think this contract has nowhere to move but south.
July Lumber – we had recommended consistently shorting the contract on rallies to 286 or better. Indeed that was the trade of the week, with trades available three out of five sessions on $2-3 scalps. We will look at the 286 or better area for fresh shorting opportunities
Grain contracts finally backed off. We had warned of severe overvaluation above $15 in the July Beans. We were consistent sellers in size in the July Beans in moves above $15 throughout the week. The contract went out at 14.7825 in Friday’s trade, and we believe the contract will back down for a retest of 14.60 in the coming week’s trade, as much-vaunted Chinese buying still fails to appear and global bean stocks begin to look healthier.
The July Wheat – also coming down several times for tests of $6. We think it only a matter of time before $6 is breached, as global Wheat supplies continue to be rebuilt.
The July Silver contract – acting sloppy with a consistent selling pressure in the Copper. We were sellers around $31 throughout the week as we recommended in our weekly missive. We covered our shorts Friday from a 38.30 close. We think the July Silver will not be able to hold $30 much longer.
The White Metal complex led by July Platinum continued to move irregularly lower throughout the week. We had warned that the days of being able to sell the contract above 1600 were over. We think 1500 will give way in the coming week’s trade.
The July Copper contract – good selling action late week as fresh shorts come into the contract on reduced Chinese buying and increased global inventories. Do not be suckered by the shills pounding the drum that Copper stocks are down now at the LME. That is completely bogus as fresh Copper is not coming into the market due to falling demand.
We had also warned that July Coffee would be moving lower during the week. Indeed we saw the Coffee get hammered under the 1.77 area. We had sold the Coffee twice at 1.8740 which we covered at 1.7440 in Friday’s trade. We think the Coffee still has lower to go.
Short covering action in the July Cocoa reversed earlier week declines. However we still recommend shorting the July Cocoa on moves above 2300, a trade that has been consistently profitable.
We had also warned that the July Cotton would be coming down to the bottom end of the recent range, a process which began in Friday’s trade. We are now consistently selling the contract on moves back above 89 cents. We believe that the contract will come down for a test of 86 cents in the coming week’s trade.
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