Markets Roiled Late Week Creating Dynamic Trading Opportunities

Written by Al Martin Sunday, 09 May 2010 21:58

(4-9-10) In line with our previous week's missives, we continue to trade the June Long Bond contract from the long side on dips. Indeed in Thursday and Friday trade, we saw the Bonds have enormous intra-day rallies, allowing us to take out 2 whole points in both Thursday's and Friday's session in our long-side day trades.

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(FREE SAMPLE COLUMN) Bonds Continue To Signal Deflationary Trade

Written by Al Martin Sunday, 02 May 2010 22:14

(5-2-10) In late week trade we saw the Treasury Bonds continue to be a buy-on -dip trade as we had suggested they would be in our previous week's missive. We continue to trade the Bonds on the long side.

On Friday morning we put out an emergency buy recommendation at 118.00 in the June contract, which we were filled on, with a sell order at 119.00, which was also filed by the end of the session, taking 32 of the 33 ticks out of the day's range. Despite equities continuing to move higher, the Bonds are telling us that there are problems on the horizon. Bonds continue to be a buy-on-dip trade. We continue to like to buy the bonds on back-offs of a quarter to a half a point.

The June Dollar contract moved up above 82.00 in late week trade, as we had predicted in our previous week's missive. The contract generated thousands in fresh profits for those who bought the contract early week. We expect the Dollar contract has further to go and will challenge the 440-day moving average at 83.30.

The June Crude Oil contract, which we had been trading from the long side on dips -- we changed and starting trading on the short side above $86 as we have consistently recommended. Indeed we were short the Oil now in a position we're carrying over the weekend and would continue to trade the Oil on the short side above 86.00

The June Gold contract despite Dollar strength continues to respond to Euro nervousness, creating a good underlying bid in the market. However at $1180 the contract is fully priced for now. Gold will move as much as $20 on Sunday night, depending on Euro news flows.

The July Sugar contract which we recommended shorting in last week's missive continues to fall back, establishing yet another new low in this week's trade. We believe the 15 cent support area will give way and our downside target of 14.00 remains unchanged.

The July Orange Juice contract has failed to rally back to our shorting target of 1.40. We still like shorting the contract at that level.

The July Lumber contract continues to trade above 300 although it has fallen late week. We expect this contract will move back under 30 in the coming week's trade.

The Grain complex picked up late week. However this strength is strictly both technical and temporary. We continue to like shorting the July Beans on moves above $10. We think the July Wheat, now back above $5 is a particularly tasty short.

The July Copper, which was our feature trade of the week, continues to fall back losing 17 cents on the week, sending a signal of continuing decline in industrial consumption. Currently we are shorting the Copper on rallies back to 3.40.

The July Coffee, which we had been scalping from the short side throughout the week, managed to close above 1.35 in Friday's session. We now look to sell the contract at 1.3550 in Sunday night trade.

The July Cocoa contract continued to hold 3200 in Friday's session. However we feel the contract is long in the tooth and we would look to be sellers at 3250 or better.

The July Cotton contract also picked up late Friday after a tremendous drubbing throughout the week. We think that Friday's move was short-covering led. We look for lower prices from the Cotton.

Next Week’s Bond Calendar May Put Crimp in Long Bond Trade

Written by Al Martin Sunday, 25 April 2010 20:40

(4-26-10) We made the last of our Long Bond trades in the Thursday-Friday overnight session, where we had bought the bonds at 117.06 in late Thursday day session trade, selling them at 117.14 in overnight trade, just one tick from the high to take our final quarter point on our series of long-side scalps on the bonds for the week. We saw the Bonds come down Friday and with fresh supply coming this week, it is likely that the buy-on-dip trade in the Bonds is over with for now. Indeed we would look at shorting the Bonds on rallies above 117.

The June Dollar contract was turned back above 82.00 in Friday's trade. However we believe that the 82.00 barrier will be breached in the coming week's session and we continue to trade the Dollars from the long side on dips.

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SEC Lawsuit Against Goldman Sachs Roils Markets

Written by Al Martin Sunday, 18 April 2010 23:03

(4-18-10)  Once again the June Long Bond contract gave traders a stellar buying opportunity in Thursday’s night session, when the Bond backed off again, down to the 115.16 area, an area that we bought in, taking ¾ of a point out in the next trading session. The Bonds continue to be a buy-on-dip trade and despite fresh supply coming, Bonds appear to be trading solidly to the upside.

The June Dollar contract also gained in Friday’s trade on the roiling of global markets by the Obama administration’s lawsuit against Goldman Sachs. The Dollar has been oversold on a technical basis. We would expect the June Dollar contract to retest 81.30 in the coming week’s trade.

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