Sloppy Trade 8/20/10

Like a Sloppy Joe it might be messy but the end result can be tasty. Translation be nimble even with sideways two sided trading there are plenty of trading opportunities. Oil has finished lower 10 out of the last 12 sessions reaching a six week low today. However today is the last trading day for September futures and when October becomes the front month next week we expect a move north. Clients that have started to scale into longs are down but that is why we suggested scaling in, we’re incapable of picking bottoms. If we do start to get some movement in Crude expect the distillates to follow. Natural gas will close down 4.6% on the week; calling a bottom is dangerous but we feel we’re close here. Clients are buying October and November futures and November 50 and 70 cent call spreads. Indices will finish the week slightly lower but the week was two sided with neither the bulls nor bears really taking control. We continue to think sideways sloppy action will exist in the weeks to come. Our bias is bearish but we do not expect a total meltdown at this juncture. We used the 2.25% dip in cocoa today to start scaling into longs for clients. The chart looks very similar to natural gas which clients are buying as well…see above. There is a strong seasonal tendency to see cocoa pop in the next month though past performance is not indicative of future results. We anticipate a trade back to 3050 in December cocoa within 30 days. Aggressive traders continue to gain bearish options exposure in December cotton. Lumber has gained 5 out of the last 7 sessions. Our target in November is $250. There appears to be more upside in live cattle but we may start to look for shorting opportunities…stay tuned. Gold likely put in an interim top this week; we expect a $30 correction. September silver closed down 2% today but until we break the 200 day MA at $17.80 we remain friendly. Those long futures were advised on stops just below that level. Some clients remain in December call spreads. As for agriculture we are bullish corn and bearish soybeans and wheat. Contact us for exact pricing or strategy. The dollar should continue to gain traction into next week which should equate to a weaker Euro, Pound, and Loonie. Well those would be the crosses we will likely trade for clients. Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results. MB Wealth Corp. is not responsible and does not endorse anything outside of the content of this article authored by Matthew Bradbard; President of MB Wealth. Benzinga Recommends that you take a look at the Market Vectors Africa Index ETF AFK. The AFK is an ETF that tracks the Dow Jones Africa Titans 50 IndexSM. The Market Vectors Africa Index ETF was down .79% in today's session.