Continued Euro Stress Presents Fresh Shorting Opportunities

Written by Al Martin Monday, 01 March 2010 00:25

(2-28-10) In late Wednesday trade, we recommended going long the March Long Bond contract at 117. We saw the contract rally to trade up as high as 119 in late Friday trade, as the US Dollar finally came up at the economic statistics release on Thursday and Friday which showed a fresh weakening of the US economy. We continue to trade the Bonds on the long side on dips, and we believe the Bonds look good to go for a retest of the 120 area in the coming week's trade.

The March Dollar contract – we also continued to trade on the long side on dips. We like buying the contract under 8050 and have been consistent buyers of the contract in the 8030-8040 level, selling on 20-30 point rallies.

Read more: Continued Euro Stress Presents Fresh Shorting Opportunities

Growing Global Economic Tensions Create Profitable Trading Opportunities

Written by Al Martin Sunday, 21 February 2010 23:21

(2-21-10) We have been trading the March Long Bond contract from the long side on dips. Indeed Thursday night, we had bought them at 116.07, the exact low of the overnight session. We also put out a general recommendation to buy the Bonds at 116.07 Friday morning. We see that Friday morning the Bonds did come back down early for a retest of 116.07 and held. We had suggested that the Bonds would rally up to potentially test 116.28 during the day session and in fact that happened, creating a tremendous profit for overnight and early morning longs. Furthermore we continue to trade the Dollar from the long side. We currently look at the March Dollar contract as being a buy at any number under 80.50.

Read more: Growing Global Economic Tensions Create Profitable Trading Opportunities

“PIIG Bailout” Rallies Present Fresh Shorting Opportunities

Written by Al Martin Sunday, 14 February 2010 21:53

(2-14-10) Global equity and commodity markets attempted mid-week rallies on the back of signs of stabilization of the state debt of the PIIGS (Portugal, Iceland, Ireland, Greece, Spain). However this represents only fresh shorting opportunities as prices fell in Friday’s session.

Read more: “PIIG Bailout” Rallies Present Fresh Shorting Opportunities

FREE SAMPLE COLUMN-SUBSCRIBE NOW Precipitous Falls in Commodity Prices as Shaky PIIGS Roil Markets

Written by Al Martin Sunday, 07 February 2010 22:03

(2-17-10) Last week we saw a continuation of the now ensconced 30-day trading pattern followed by 4-5 day declines, followed by 1-day “dead cat bounces” in both equity and commodity prices. These bounces have represented and will continue to represent fresh shorting opportunities in equity and commodity prices as well as fresh buying opportunities in Treasuries and Dollars.

We continue to trade the Treasuries from the long side on dips, as we have done this continuously for the past four weeks. Indeed we were buyers of the Treasury Bonds Friday morning on the pullback, buying the March Long Bonds at 118.14 and selling them at 119.14 in late session trade, taking $1000 per contract in profit out of our positions.

We also bought the Dollars Thursday night, as the Dollars came up above 80.25. We were sellers of the Dollar at 35 ticks higher in Friday’s trade. We expect that now that the Dollar contract has traded above its 12-month moving average, fresh short covering will propel the contract higher, as the remaining Dollar bears are squeezed out.

We shorted the Oil Thursday night at $73.25, and again at $73.50, covering below $71 in Friday’s dip. We saw the March Oil come under $70 for the first time in a long while. We would expect the contract to trade back to $72, wherein we will be looking to short it again.

Gold, which we have also been trading from the short side, fell precipitously in early Friday trade, as equity prices turned around on late short covering. However, we will be looking to re-short the Gold in the April contract on rallies back to $1075 or better.

The March Sugar contract, which we had been short at 30 cents for the last 8 days, fell back to fresh lows at 26.17 in Friday’s session, despite shilling by Sugar Bulls who continue to look at near-term supply tightness. However sugar is not immune from the sell-off in the rest of the boards and perceived supply tightness isn’t as acute as Sugar Shills would have us believe. We think the Sugar is coming down to 24 cents.

The March Orange Juice, which we had also shorted again last week, as the contract fell back below 140. We suspect it has further to decline.

The Grains continued to fall back, but found some stabilization late week. Although we continue to think that the March Soybeans will come below $9.

The March Silver contract, which we have been most heavily short of any commodity, fell below $15 in Friday’s session. We covered the shorts we had put on earlier in the day above 15.50 at 14.93. We would expect Sunday night a continuation of Friday’s late short-covering rally and would look to sell the Silver again on rallies back to 15.50.

The March Copper contract, which we had been trading from the short side aggressively in the last 10 sessions, also rallied back slightly to go back out at 2.880. We expect this contract to trade down to $2.40 in the next 30 days.

We had been warning the March Coffee contract would break the 1.33 support area. Indeed this occurred on Thursday. We were short the Coffee at 1.3290 on our sell-stops. We covered at 1.2890 in Friday’s trade. We would look to resell the Coffee on any trade back to 1.33.

The March Cocoa also broke precipitously as fund liquidation continued. We were short the Cocoa on Friday at 3060, taking nearly $100 out of the contract. We would now look at the 3030-3060 area for fresh shorting opportunities.

March Cotton also broke significantly in Friday’s trade as we had been warning. We have been consistently short Cotton, since Thursday morning at 70 cents. We now believe that any trade back to 6850 or better in the March Cotton contract represents a fresh shorting opportunity.