Commodity Bubble Continues to Unwind

Written by Al Martin Monday, 09 May 2011 02:08

 (5-8-11) Those readers who have been trading the June Long Bond contract from the long side, as we’ve been suggesting for the last 3 weeks, continue to profit in last week’s trade. As the contract broke above its 123.05 March high, we issued an emergency flash to our professional traders, recommending the contract be bought.  Indeed we bought in the contract at 123.06, and we were sellers of the contract Friday at 124.06. Despite supply coming next week, bond markets no longer seem to be frightened of the supply and continue to advance and should be traded on the long side, as long as 123.05 continues to hold.

June Dollar contract – we had been consistently warning of a short-covering rally. Indeed in last week’s trade, we saw the contract lift 200 ticks to establish a close above 7500. No fundamental change other than the short trade simply got too crowded and a short-covering led relief rally was necessary to correct this oversold condition.

The June Crude Oil contract, which we had shorted in Thursday’s trade at 112 we hung onto covering at 98.00 in Friday’s session, as the commodity bubble continues to unwind. We suspect this contract will come down for a retest of the 95.00 level early in the coming week.

June Gold continues to unwind. We were short sellers of the contract at 1538 in Thursday night session and have sold the contract down continuously, covering at 1497 in Friday’s trade. We think this contract comes back to 1450.

The Silver contract, which we had been consistently trading on the short side ever since 49.20 in the July contract -- we were short sellers in Friday morning trade, covering at 33.73. Friday short-covering action in the Silver sets up another shorting opportunity at 36.20 in Sunday night’s trade.

Read more: Commodity Bubble Continues to Unwind

 

Gold & Silver Continue to Reside in La La Land

Written by Al Martin Sunday, 01 May 2011 22:37

(5-1-11) We continued to scalp the June US Treasury Long Bond contract from the long side in Friday’s trade. We were buyers of the contract at 122.01, selling it at 122.17 in late session, taking out yet another half a point from the contract on the long side. As financial pundits continue to pooh-pooh US Treasuries, the Treasuries continue to gain in value. We continue to trade them from the long side.

The June Dollar contract broke into yet another fresh 3-year low.  We are looking to buy the contract at 73.00.

The June Crude Oil contract – we were buyers once again on our 113.01 buy stop Friday, as recent tops at the 113.50 area were breached on a closing basis, signaling higher Oil prices next week. For now, however, we would look to be short sellers on any move up to 114.50.

Read more: Gold & Silver Continue to Reside in La La Land

 

Coffee: Feature Trade of the Week

Written by Al Martin Monday, 25 April 2011 01:20

(4-24-11) In Friday trade, we saw the June US Treasury Long Bond contract close marginally higher, but continues to be a buy-on-dip trade down to the 120.24 area, as we had suggested in last week’s missive. We continue to look to trade the Bonds on the long side.

Read more: Coffee: Feature Trade of the Week

 

US Treasury Bonds Continue to Rally

Written by Al Martin Sunday, 17 April 2011 22:37

 (4-17-11) We continue to trade the June Long Bond contract on the long side on dips. We were buyers of the contract again on the close Thursday at 119.18  We were sellers of the contract in Friday’s trade, taking nearly one whole point out of the contract. Despite a seemingly growing bearish environment for Bonds, Treasury Bonds continue to rally. The Treasury Bonds are telling you that price declines in equities and commodities are coming.

Read more: US Treasury Bonds Continue to Rally

 

Gold Overbought; Silver Dragged Up by the Gold

Written by Al Martin Monday, 11 April 2011 01:51

alt(4-10-11) Last week’s light market action set up trading opportunities for the coming week. We saw the June Long Bond contract come down under good selling pressure in Thursday and Friday trade. We bought the contract when it came under 118.00 in Thursday overnight trade, selling the contract at 118.16 in Friday’s early session. We think the bonds are cheap down here and we look to trade them from the long side on a retest of the 117.28 area.

The June Dollar contract is coming down to approach fresh lows. However we think the contract is oversold at 75.00 and would be looking to trade the contract from the long side, as the Euro will pull back from recent ECB rate action inspired rallies.

Read more: Gold Overbought; Silver Dragged Up by the Gold

 

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