Weekly Market Summary For Week Ending 1-13-06
By Al Martin
Following is last week’s trading recommendations and results (Jan 9 -13, 2006) We woould remind viewers that we trade in all sessions and that our day, for bookkeeping purposes, runs 4 pm to 4 pm ET.)
In Monday’s trade, we SS-4 SDH 14.82 C 14.67 (carryforward position), SS-2 LBH 385 C 380 (carryforward position), SS KCH 119.30 C 117.30, SS-4 CCH 15.40 C 15.30, SS CLG 64.50 C 64.25, L-2 USH 114.07 S 114.11, SS SIH 9.20 C 9.15, L USH 114.02 S 114.06.
In Tuesday’s trade, we went S LBH 381 C 378.50, SS KCH 120.30 C 119.30, SS SIH 9.01 C 8.96 (after market trade), L SIH 9.0150 S 9.0400, L SIH 9.03 S 9.08, SS CLG 63.50 C 63.25, L USH 114.04 S 114.08, L-2 DXH 89.00 S 89.10, L-2 WH 3.2650 S 3.2850, SS SIH 9.27 C 9.22, SS-2 LBH 385 C 382.50.
In Wednesday’s trade, we went SS-2 CTH 55.30 C 55.00, L-2 DXH 89.10 S 89.20, SS SIH 9.01 C 8.96, SS CLG 63.40 C 63.15, L SIH 8.96 S 9.01, L-2 DXH 89.00 S 89.10, L-2 USH 113.05 S 113.09, L SIH 8.97 S 9.00, SS CLG 64.20 C 63.95, SS-5 OJH 124.50 C 123.90.
In Thursday’s trade, we SS CLG 64.25 C 63.95, SS HGH 2.0910 C 2.0850, SS HGH 2.0960 C 2.0900, SS-2 CCH 1530 C 1520, SS-2 WH 333.75 C 331.50, SS SIH 9.06 C 9.02, SS CLG 64.75 C 64.50, L-2 USH 113.06 S 113.10.
In Friday’s trade, we SS-2 LBH 385.10 C 377.50 (carryforward from previous day), SS SIH 9.04 C 8.99, L-2 DXH 88.92 S 89.07, SS-2 USH 113.28 C 113.24, SS-2 SIH 9.03 C 9.00, SS-2 HGH 209.70 C 209.10, SS CLG 63.95 C 63.65, L-2 DXH 89.00 S 89.15, SS-2 LBH 382 C 379.50.
Total number of positions traded on the week: 41
Total number of lots traded: 88
Aggregate gross profit: $12,425 (net $10,125)
Median margin committed: $8,860.00
Maximum margin committed: $11,560. (Margin commitment calculated at exchange member minimum margins.)
SPX: Last week saw the index continue to be turned back on rally effort into the 1290/95 upside resistance zone, falling back late-week, on improved market internals yet weakening fundamentals, week over week, as fund inflows, which have been tepid since the first of the year, fell further, setting up the possibility of the first weekly outflows on the year, in the coming week’s trade, as insider selling and the secondary offering calendar remained, on a dollar-volume basis, at near record levels. Further, in late-week trade, global equity markets fell back, with the declines most notable in the overbought Nikkei & Hang Seng indices, with the SPX looking tired, late week. Thus, we continue to like shorting the SPX on rallies to 1290, or better, and look for rally opportunities in the coming week’s release of the IP/CU & CPI data, to provide trading points.
USH: The contract continued to trade range-bound early-midweek, providing consistent 1/8-1/4-point scalping opportunities on the long side at the 113.12 level, with shorting opportunities on rallies up to the 114.08 area, finally breaking out to the upside on the back of Thursday’s weaker economic data, with a continued rally on the back of Friday’s weak data, with our feature trade of the week shorting at 114.28, in Thursday’s overnight session, covering back at 114.20. With end-of-week fair value at 114.16, the contract, basis Friday’s 114.22 close, is now slightly overbought, with a technical pullback to the 114.10 area now likely, with a pullback below this level requiring weaker than expected IP/CU & CPI data.
DXH: The previous week’s 270-point decline created choice long-side scalping opportunities, in last week’s session, by going along on pullbacks to the 88.65-75 range and selling on rallies back to 89.00/15. Friday’s pullback to the 88.65 area once again presented long-side scalping opportunities, as we expect the contract will rally back to the 89.00 range, early in the coming week, as right differentials continue to be dollar bullish.
SIH: The contract presented continuous shorting opportunities, throughout the week, shorting on rallies to 9.10, or better, covering back on sell-offs to the 8.95/9.00 range. Further, the silver continues to trade weak relative to gold, a classic sign of an overbought gold market. Thus, we continue to like shorting the SIH above 9.10, and especially so above 9.15, covering on 5-cent, or better, pullbacks.
CLG: The oil continues to be severely overbought around the $64 level, with a choice shorting opportunity at 65.00 coming in Thursday’s trade, as inventory data remained energy-complex bearish for the 5th consecutive week, with Q-1 supply increasing from OPEC & non-OPEC members with continuing Gulf of Mexico production restoration. Thus, we continue to like scalping the contract from the short side on rallies to 64.00, or better, covering on 30-to-50-cent dips.
WH: With the U.S. AG report being construed as bearish for the grain complex, and with record domestic & global weak carryforwards, combined with moderating winter wheat damage, we continue to like shorting the contract on rallies up to the 336/7 area.
HGH: We continue to short the contract on scale-up rallies, covering on 60-to-120-point pullbacks, with Thursday’s new contract high at 2.12 presenting an excellent shorting opportunity, and we now like shorting the contract on rallies to 2.1120, or better.
LBH: The contract continues to provide excellent shorting opportunities on rallies to 382, or better, covering on dips back to the 377 area. The funds continue to bid the contract, which, at current levels, is as much as $50. overbought, relative to its underlying supply/demand fundamentals. As such, we continue to like shorting rallies above 380, and would become more aggressive above 385.
CTH: The contract continues to trade in the 54.50-56.50 range, pushing the upper end of the range in late-week trade, and we continue to like shorting the contract on rallies to 56.00, or better, covering on dips back to the 55.30 area.
SBH: The contract, once again, blew off to the upside in Friday’s trade, propelled by fresh fund buying, which ran a substantial book of buy stops in the 15.00/10 range, flushing out old shorts, and bringing in fresh technical buying up to the 15.17 area, with the rest of the rally, up to 15.30, being propelled by weak-handed spec longs, with light-volume commercial selling as well as professional trade shorting coming in above 15.20, as the commercials & professionals lie in wait to ‘sandbag’ the funds, given the huge number of fresh sell stops, which built in Friday’s trade between 14.90-15.00. With record global inventories and a healthy `06 global crop, we continue to like shorting the contract above 15.15, to cover on dips back to the 14.90/95 area.
OJH: The contract attempted to move higher, mid last week, on the back of the USDA canker program withdrawal, presenting a series of excellent shorting opportunities on rallies to 1.2640, or better, covering on 60-to-120-point dips, and we continue to like shorting the contract on rallies to 1.26, or better.
KCH: The contract continued to present numerous shorting opportunities on rallies to 1.19, or better, covering on dips back to the 1.17 area, with the funds coming in late Friday’s trade in an attempt to ‘shill’ the close above 1.20. The KCH contract is, at current levels, the most overbought fungible on the board, relative to its underlying supply/demand equation, and we continue to scalp the contract from the short side on rallies above 1.1950, becoming more aggressive on rallies to 1.21, or better.
CCH: The contract, once again, provided a series of excellent shorting opportunities on rallies to 1530 or better, covering back on dips into the 1510/15 area. With the CCH contract being the second most overbought of the ‘softs & trops’, we continue to like shorting the contract on rallies to 1530, or better, becoming more aggressive on a scale-up basis. Watch the key 1498 level, a close beneath which would likely take the contract back to the 1450 area.
As always, we welcome e-mail with your trading questions and customercare@insiderintelligence.com, and would remind subscribers that our introductory $99. monthly rate for our daily realtime telephonic trade talk service remains available until March 1.