US Treasury Long Bonds Continue To Climb; Gold Declines in Line With Our Predictions
Written by Al Martin Monday, 25 February 2013 18:55
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(2-25-13) We have been warning traders to continue to trade the March Long Bonds from the long side on dips, as we have been doing now since the first of the year. Indeed we were buyers of the Long Bonds once again in Thursday's trade on our standing orders at 143.20, which we sold on Friday’s close at 144.00. We are watching the 144.16 level in the March Long Bonds and that a close above 144-1/2 would prompt fresh short covering from institutional short sellers.
The March Dollar Index continues to move higher, although it is now meeting resistance at the next up -- meaning 81.70/ 80 resistance level. We think this resistance will be held for now, as we think that Euros are not coming below 1.3100 anytime soon. We continue to short the March Euros on moves back above 1.33.
March Oil – we had been warning of a crack in the March Oil, being the single most overbought industrial mineral on the boards. We were short the Oil from Thursday, when the Oil came under 96.00 and rode it all the way down for the test of 93.20 in late Friday’s lows. We believe that the back of the Oil market has been broken and that it will come down to its supply/ demand reality and that 90.00 is now in the cards.
The April Gold contract came down for a test of 1562, as we had warned in our last week’s missive. Indeed the last low in the Gold had been reached at the very same level. We anticipated a small bounce and covered our shorts at 1563 and got long. We were sellers of our long April contracts in the 1582 area in Friday's trade, and would look to establish shorts again at 1592 level
The May Sugar continues to be topped on moves back to 18.20 or better. We are now consistently selling the contract on moves to 18.20/ 30 covering on 30-40 point dips. Despite recent shilling in the Sugar, we think that the Sugar has lower to go.
The May Orange Juice contract -- turning back once again from the 1.30 area, as recent freeze damage in north Florida crop was less than expected. We continue to think that the Juice is overbought by at least 10 cents at current levels.
March Lumber – we had suggested to sell short again on moves above 393 to be sellers again on moves above 393. In fact we were sellers at 396 early week. Lumber having fallen back after being turned back from a test of the 400 level. Lumber remains dramatically overbought at current prices.
Grains – finally a turn-back in the Beans. We had been shorting the beans in size in a Sunday overnight move above $15 with an average short of 15.10 coming into the morning session. We covered on the close at 14.62. We think that the back of the Beans has now been broken. Unwashed longs were stopped out in Friday’s trade and we think the Beans will come back down for a test of 14.20 within the next five sessions.
The March Silver contract – also continuing to act sloppy. We were short sellers again on moves to 28.80 and higher, covering on 10-20 cent dips. We think that the March Silver is coming down for a test of 28.00.
Also we had warned of overvaluation in the April Platinum contract. Indeed the Platinum fell horrendously in late week trade. We were short the Platinum from 1670 and rode our shorts all the way down to Friday’s 1608 close before covering. With Platinum production in South Africa and Russia now increasing and global demand falling, we think Platinum has nowhere to go but south and would look to establish fresh shorts on any move back to 1630.
We had warned of a coming crack in the May Copper contract. Indeed we saw that crack late week. Our 3.5995 sell stops were hit in Thursday’s trade, which we did not cover until our 3.5180 cover orders were hit in Friday’s pullback. We think that the Copper will not hold the 3.50 level.
The May Coffee contract - we were short again in Friday’s session and are now short from 1.4360, looking for a 5 cent decline. Coffee is now regularly trading down to the 1.37 area. We suspect Coffee prices have lower to go with Arabica prices now falling underneath Robusta prices for the first time ever, bespeaking of a growing global Coffee glut.
May Cocoa – we had also warned that the May Cocoa should be shorted again on any moves above 2150. We continue to look at the 2150 fresh shorting opportunities to take $50 out of the contract.
May Cotton continues to be turned back on moves above 84.00. Recent bullishness in the Cotton, we think, is overdone with global supplies continuing to build. We are short sellers of the May Cotton on moves above 84.00.
We also believe that the Corn and Wheat have lower to go. We were short the Wheat midweek from 756 in the March contract finally covering in Friday’s 718 close. We think that with global supplies of Wheat building once again, Wheat will come down for a test of $7. We also feel that the March Corn will come down for a test of the 6.75 area.
SPX Forming Top at 1520; March Long Bonds Forming Base at 143
Written by Al Martin Monday, 18 February 2013 00:24
(2-17-13) Throughout the week we continued to sell the March spoos on our standing order at 1519.75, which has thus far been filled three times within the last five sessions. We have taken an average of 5 handles out of the contract each time. We will continue to short this 1520 area and will begin next week to build a short position there, looking for a retest of the 1490 area.
Strengthening US Treasury Bonds Spell Trouble for Equities
Written by Al Martin Sunday, 10 February 2013 23:57
(2-10-13) We continue to trade the March Long Bonds from the long side on dips. Once again we were buyers of the Bonds on the mid-day dip in Friday’s session on our standing orders at 143.05. We were sellers again on the close at 143.23, taking just over half a point out of the contract. The Treasury Long Bonds despite the proselytizing of the “Bond Bears” would demonstrate that there is a growing short interest in long-dated Treasury paper that we suspect is going to be flushed out. We continue to look at the Bonds from a trade on the long side.
The March Dollar contract – up against resistance at 80.30/ 40 level We think this resistance will be held for now as we don’t feel the Euros are ready to come under 1.3350 yet, however likely ECB and German government action is coming to force the Euros lower which will make this contract a buy again for a 50 point scalp.
March Oil – we continue to short the Oil on moves above 96.00 as we did throughout the week taking 25-50 cent scalps. Oil is still dramatically overbought at current levels. We continue to look at the 96.00 – 96.50 area for fresh shorting opportunities.
The April Gold contract continues to meet selling on runs up
to 1680.We have been consistently shorting the Gold on runs up to 1676
throughout the week, taking $5-8 profits on the short side. Gold looks tired at
current levels. We will continue to sell Gold as long as 1682 is not achieved
on a closing basis.
Fresh Highs in Overbought Markets Create New Opportunities
Written by Al Martin Sunday, 03 February 2013 21:48
(2-3-13) We were again buying the March Long Bond contract
on our standing order at 142.21 in Friday's session. We were sellers on the
lift back to 149.29, taking a 1/4 point out of the contract. Once again we
would be looking to buy the contract Sunday night on any breach of the 142.19
Friday's Selloff in Long Bonds Creates Buying Opportunity
Written by Al Martin Sunday, 27 January 2013 23:44
(1-27-13) We had sold the Long Bonds as they came back under 145 in Friday’s overnight session as we have consistently done, riding them down to the 144.02 close, where we reversed our position and are now long again. We think the selloff in the Bonds was strictly a reaction to the S&Ps having established a close above 1500, a situation that we believe is temporary in that we were also short the SPH from 1498.
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