Buying Dips on US Treasuries Still a Good Trade
Written by Al Martin Monday, 03 November 2014 01:07
(11-2-14) Good action in the lower trading zone in the Dec.
Long Bond contract throughout the week. We were consistently buying the Bonds
on our standing order at 140.16, selling them on rallies back to 141.08. We
bought the Bonds again Friday at 140.16 and currently have a standing sell
order at 141.08. We will continue to trade this range until further
The Dec. Oil contract -- we continue to short on rallies back to 81.50 or better, covering on $1-2 dips. Although the Dec. Oil contract has yet to establish a close under $80, we expect that the current effort to manipulate the price of Oil can not be sustained and that the Dec. Oil will begin trading in a new lower zone soon.
We had warned of lower prices coming in the Dec. Gold
contract. Indeed our 1219.90 sell stops were hit in Thursday’s action, leaving
us short the Gold from 1219.70. We did not cover our short position until the
1272.70 support area was reached. Sloppy action in the Dec. Gold off all rally
efforts. We think that if the Dec. Gold gets under 1265, the Gold will trade
down to 1250.
Spoo Rally Overdone, as Bonds Establish Lower Trading Range
Written by Al Martin Sunday, 26 October 2014 22:47
(10-26-14) We’re coming into Sunday night short the December
Spoos from 1960 with SPX having traded up to 1966 in Friday’s session and
overhead resistance at 1970. We think now is a good time to begin building a
short position in the Dec. Spoos. Our next up-sell order is at 1965.
Be Prepared for Fresh Shorting Opportunities
Written by Al Martin Monday, 20 October 2014 00:51
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(10-19-14) In Friday’s trade action in the Dec. Spoo contract -- we had bought the contract early session at 1877.50. We suspected that the contract would move higher, but were uncertain if it would get back to a test of Wednesday’s “gift shorting high.” Accordingly we had a sell order in at 1887.50 which was filled. We did however have a standing sell order at 1891 in the event that Wednesday’s “gift shorting high” was rigged. We were filled and are currently short from 1891 and so far as we are expecting a triple test of that 1815 area in the coming week’s trade.
Also we finally covered our short Bonds in Friday’s session that we had sold away on a knee-jerk reaction at 146.08. We had covered at 142.24 reversing our position and are currently long the Bonds at 142.24 in that we think that any move down to 142.75 or lower in the Bonds is a buying opportunity.
The Oil – we were short on our standing order at 84.06 which we covered on our standing cover order at 83.06. We think the move back up in the Oil is an absolutely prime shorting opportunity and that the Oil should be shorted on any moves back to 83.50 or better, as we expect the 80.00 level to once again be tested in the coming week’s trade.
Sloppy action in the Dec. Gold contract as we now see the Gold is taking on the mantle of a third-tier fear bid. We were consistently shorting the Gold throughout the week on our standing order at 1244, covering at 1238, a trade that we did 6 times despite the spike high in Tuesday’s trade which represented a tremendous shorting opportunity above 1250. We had no standing orders there but nonetheless were filled selling at 1244 and covering at 1238.We will continue to short the Gold on any moves to 1244 or better.
Softs and trops – beginning to weaken despite Ebola Scare. As we mentioned in our last week’s missive, we expect Sugar, Coffee, Cocoa, Orange Juice and Cotton all to move lower. Although the Sugar did not move as low in last week’s trade as we thought, we continue to short the Sugar on rallies to 16.80 or better as we did last week, covering on 20 cent dips. We suspect however that when the March Sugar moves under 16.50, selling will pick up.
We had warned of more selling to come in the Nov. Orange Juice contract as the contract came under 1.40. Indeed we were consistently selling the contract throughout the week at 1.37 or better, covering on 1-1/2 to 2 cent dips. Juice closing out the week just off-session lows but we continue to expect the Juice to break the 1.30 area.
Nov. Lumber – we had sold on our standing order at 337.20 in Wednesday’s session. We would expect the Lumber to come down for a hard test of 330.
We bought the breakout in the Nov. Beans above 9.30. We have been consistently shorting the Beans at 9.27, taking 10 - 15 cents off of every dip. We had also warned however if the Beans got above 9.30, it would give them some steam with a potential run up to 9.50 or better. Indeed we were long the Beans up to 9.50 and have begun to accumulate a short position. We are currently short the Nov. Beans at 9.54. and would be looking for a retest of the 9.30 area, as we think that last week’s rally in the Grains was more of a short covering technical move and is overdone.
The Dec. Silver picked up again last week, now coming back in line with the Gold. Our standing sell order at 17.43 in the Silver, having been reached 3 times. We were able to take 15 cents out of the trade each time and continue to look at that 17.43 - 46 area as a fresh shorting opportunity.
The short covering rally in the Platinum and Palladium at week end, we think represents a fresh shorting opportunity, as we would expect the Platinum to move down for a test of the recent lows at 1214. We think the back is broken in the Palladium contract which had been dynamically overbid on fears of Russian withholding of supplies which failed to materialize. We think the Palladium also has lower to go.
We had been warning of severe overvaluation in the December Copper contract. Indeed we had accumulated a short position at an average of 3.0850 in mid week’s trade as the Copper traded up to 3.09. We finally saw the break in the Copper late week that we had been expecting and were able to take 9 cents out of the contract. Even though the Copper held $3, it didn’t reach a lower intraday low during the week. We would expect the Copper to trade back down to the 2.95 area in the coming week’s trade.
We had recommended shorting the Coffee as we have been doing consistently on moves above 220. We did so 4 times during the week, covering back on breaks to the 211-212 area, enabling us to take out a total of 30 cents out of the Coffee, as we think the Ebola Scare has done as much as it can do for the Coffee.
We were consistently selling the Cocoa on our standing order at 3123, which we were filled in twice during the week, taking $50 out of the contract each time. We continue to keep our 3123 sell order in the March Cocoa.
Dec. Cotton which we had been selling above 65 cents, we are now selling on rallies above 64 cents, as we believe the Dec. Cotton is coming down for a hard test of 60 cents.
Same Old, Same Old
Written by Al Martin Monday, 13 October 2014 00:07
(10-12-14) We continue to trade the Dec. Long Bonds from the long side on dips. We were buyers consistently late week in the 140.24-28 area, selling on half-point rallies. Bond action – an early precursor of decline in the Spoos. We would expect the Spoos to establish a close under the 200-day moving average, possibly in Monday’s trade. We continue to trade the Spoos from the short side, although coming in long the Spoos Sunday night, looking for that 5-6 handles pickup trade. We nonetheless would be selling the Spoos on any rally again in the Monday day session.
The Nov. Oil contract – we continue to trade from the short side and have been consistently covering on tests down to the 84.25 area.
We would expect the Gold to move up above 1230 Sunday night
and our expectation the Spoos will open lower. However we think the Gold will
become a short at 1232 or better.
Long Bonds Continue To Move Higher as Spoos Mount a Second Challenge
Written by Al Martin Sunday, 05 October 2014 23:52
(10-5-14) We see Long Bonds move higher as above par 39 in
midweek’s trade in line with our previous week’s prediction. Bonds traded up to
140 in Friday’s session. We had been long the Bonds from 137.28. We were sellers
on our standing orders at 139.28. We got short the Bonds on the turn back
Thursday at 139.29 and covered them on our standing order in Friday’s trade at 139.05.
We think any retest down below 139 is now a buying opportunity.
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