Continue to Play the 'Overvaluation Trade'
Written by Al Martin Sunday, 18 May 2014 22:04
(5-18-14) We continue to trade the June Long Bonds from the long side. We were buyers once again in early Friday session on our standing orders at 137.13 which we were able to get out on the midday lift back to 137.22. Bonds came down to session lows in late action. We would look to be a buyer of the Bonds again on any test at 137.00. The US Treasuries are the key indicator of the current speculative bubble on the planet. Watch to see if the 10-year yields drop below the magic 2.40 % yield and watch for any increase in yields in Euro-junk sovereign debt, i.e. Greek, Portuguese and Irish.
Reduced Global Tensions Calm the Markets
Written by Al Martin Sunday, 11 May 2014 21:27
(5-11-14) In Friday’s session we saw the Uncle Vlad Friday
trade begin to lessen, as Uncle Vlad made yet another peace gesture by offering
to withdraw Russian troops from the Ukrainian border for the umpteenth time. We
shall see in next week’s trade if he backs away from it once again.
Watch Out for Monday Unwinding of Uncle Vlad Trade… Again
Written by Al Martin Monday, 05 May 2014 00:25
(5-4-14) With no fresh blowup in the Ukrainian situation
over the weekend, we would expect short covering to come into the spoos Sunday
night. We would also expect the June Long Bonds which reached fresh contract
highs at 136.23 in Friday’s intra-day trade to back off. Although the Bonds
have already fallen back in late Friday trade, we would expect a further
pullback in Sunday overnight trade, creating yet another early Monday morning
buying opportunity in the Long Bonds.
End of Week 'Uncle Vlad' Trade Continues to Work
Written by Al Martin Sunday, 27 April 2014 21:14
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(4-27-14) Thursday night we had bought the June Long Bonds, bought the June Gold, gotten short the June Spoos in anticipation of the new "Uncle Vlad" generated Friday trade, where we see Gold and Bonds advance and Spoos decline, ahead of the weekend in anticipation of an over-the-weekend Ukrainian blow-up. When that does not occur, you reverse the position on Sunday night as tensions ease once again.
Accordingly we were able to purchase the June Long Bonds at 134.00. We have a standing sell order at 135.03, also technically a place where the Bonds have been turned back, the very same trade we have done twice before.
We were also buyers of the June Gold at 1390.60 and were able to sell it on our standing order at 1290.60 in Friday’s session. We had sold the Spoos away at 76.50 in late Thursday trade and covered on our standing order at 56.50 in Friday’s day session action.
Assuming there is no fresh blow-up in the Ukrainian situation over the weekend, we would be looking now to get short the Gold, short the Bonds and long the Spoos in Sunday night’s trade.
June Long Bonds went out 134.17 in Friday’s trade After we saw good selling in the 135.00 – 135.04 area, that selling was generated from people like us who had gotten long Thursday in anticipation of the run-up in prices on Friday. Also technical resistance at 135.04 capped Friday’s action.
The June Oil -- we also got short on our 101.99 sell stops in Thursday trade. We carried and were able to take a dollar and a half out of the contract in Friday’s trade. Oil still looks lower.
June Gold – run-up in Friday’s session being capped at the 1304 area, as CLPs (Colored Lights People, aka Unsophisticated Investors) came in once again to buy the Gold back above 1300. We see this action repeatedly, when the CLPs don’t know when to get out, simply getting stopped out, when the Gold moves down under 1295, as it will likely do in Monday’s session, if there is no fresh news over the weekend.
We bought the May Sugar on the Thursday close at 17.00. We had a standing sell order at 17.23. We were out in Friday’s session. Sugar is simply bouncing off of technical short covering generated at 17.00 in Thursday’s session. Fundamentals remain as bearish as they have ever been in the Sugar. We continue to look to sell rallies now back to 17.50 or better.
May Juice – we sold again on our standing order at 1.6560 in Wednesday’s trade. Our cover order at 1.620 was hit in Friday’s session, allowing us to take 3-1/2 cents out of the contract. As we stated in our previous two weeks’ missives, we continue like selling the Juice at 1.65 or better and covering on 3 cent dips.
May Lumber – we had sold once again midweek at 335.60. We were able to take $4 out on the Thursday overnight lows. Lumber is back into that 335 or better shortable zone.
Beans – now being turned back at 15.00. We were sellers on the failure at 14.9850 in Friday’s trade. More sellers now around in the Beans with inventory replenishment now beginning from Argentine crop. We think the Beans will work lower.
Good short covering action in the July Corn. We were buyers of the Corn, as we have consistently been, on our 5.0025 buy stops. That trade was good for 12 cents in Friday’s trade. Note that trade has been consistently good for an average of 2-8 cents as CLPs come in and start buying the Corn again above $5, then put sell stops in at 4.98 and get stopped out every time.
The July Wheat – our 7.0025 buy stops hit once again, selling m.o.c. Trade good for 7-1/2 cents -- another trade that has been consistently good, as the CLPs continue to buy the Wheat above $7, getting consistently stopped out at 6.9450 or lower. Note the gap down when the Wheat gets right below 6.95, generated by Unwashed sell-stop action.
July Cotton – we sold the Cotton again on our standing order at 93.25 in Wednesday’s trade. We were able to take a half of a penny out of it Thursday. We shorted Friday again on our same standing order at 93.25. We will attempt to stretch the trade Monday to get ¾ of a cent if possible.
July Cocoa – we continue to sell now on moves back to 3000. However we think the Cocoa is done for now and the opportunity to sell above 3000 has come to an end. We now like selling the Cocoa at 2980 or better.
Great trade action in the May Coffee continues. We were short the May Coffee from our standing orders at 2.14. We covered m.o.c. Friday at 2.0475. Coffee is now becoming a major money maker both ways above $2, simply getting long on your 2.0025 buy stops. Trade is good consistently for 2-12 cents. Now looking to short on moves above 2.10.
Better action in the May Copper, as the Copper action got above 3.07. We had been consistently shorting the Copper at 3.06. Our 3.0705 buy stops hit to get long. We were able to take 5 cents out by the close Friday. We think however Copper now overdone at current levels.
May Silver continues to act sloppy relative to the action in the Gold. We see that action in both Thursday and Friday. Sellers continue to be showing at 19.75 or better in the Silver.
July Platinum picked up in Friday’s session, as the Platinum and Wheat have also been part of the Friday Uncle Vlad equation. We think however that the July Platinum will come back down for a test of 1400 in early week trade.
Lessening of 'Fear Bid' Trade Creates New Opportunities
Written by Al Martin Monday, 21 April 2014 02:09
(4-20-14) We saw the
June Long Bond contract back off in Thursday’s session on word of a bogus
agreement involving the United States
to de-escalate the Ukrainian situation. We think this agreement will fall apart
in the next 3 or 4 days. We had bought the Bonds in on our standing order at
133.22 in Thursday's trade. We currently have a standing sell order in at
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