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Matthew Bradbard submits: Crude recovered the two previous days' losses, gaining 1.8% today. We expected to see the 50 day MA give way and prices to trade lower, we were wrong. We would move to the sidelines until Crude gives a clearer signal on direction. We expect a trade above $79.50 to signal higher ground, and a trade below the 50 day MA at $76.35 to signal lower ground. Natural gas is higher by 2.44% as of this post, having gained all four sessions this week. For futures traders, as long as the 50 day MA holds, on a closing basis we would remain long. For option traders, we like purchasing 50 cent October and November call spreads. We would think after a 50% Fibonacci retracement and a failure to remain above the 200 day MA indices are headed south again. Whether it be talk of deflation, a disappointing jobs number or lackluster earnings, a move below the 50 day into next week, at 1077 in the S&P confirms lower action. Aggressive traders could short indices with stops above the recent highs. Complete Story »

Matthew Bradbard submits: Oil started the week at $76 and looks to end the week around $76. The trend line that was broken on Tuesday and has previously served as resistance now has become support. Aggressive traders could buy dips that hold that line; at $75.75 in September. It is a positive sign oil held up in the face of a falling stock market, but we have a tough time getting too bullish. Keep your positions small until the picture gets clearer. October call spreads remain the play in natural gas for our clients. Next week we would like to see a settlement above the 50 day MA; in the September contract that level is $4.64. A false breakout in equities - even positive earnings news, a Goldman (GS) settlement and regulation cannot hold this market up. Clients are going to continue selling rallies. Scale into September ES shorts; clients are positioned in put spreads expecting a test of 1000. Treasuries finished the week higher as is again looks to be the flight to quality as investors flee other asset classes. Indices down should equal Treasuries up in the weeks to come.Complete Story »

Matthew Bradbard submits: Reform is rejected as “Mr. Market” does not like the coming changes. Oil’s performance today was similar to yesterday's, with a large trading range; prices closed virtually unchanged, remaining above the 50 day MA. Continue to use the 50 day MA as your pivot point; in August at $76.25. We expect oil to trade between $75.50 and $79 in the next week and would be willing to trade that range for aggressive clients. Natural gas exploded to the upside today, gaining nearly 7% with prices currently above the 100 day MA. Clients are advised to buy October 50 cent call spreads. The S&P is running into stiff resistance at the 200 day MA, and 1100 could prove to be a tough hurdle to overcome in the September futures. Aggressive traders could start scaling into longs, as we said in our commentary Monday. Most of our clients put on ES positions yesterday. They bought August 1150 calls and September 1075/1000 put spreads. See yesterday’s post. Stand aside in Treasuries and look to be a seller from higher levels.Complete Story »

Matthew Bradbard submits: If the dollar is moving south and the indices are moving north, that is conducive for commodities to trend higher. Crude is above the trend line mentioned in yesterday’s blog, higher by over 3% in today’s session. Not to mention a bullish engulfing candle on the daily chart, so yes. folks, it looks like higher ground is in the future. Aggressive traders in futures should use $75.50 followed by $74.40 as support in August. A possible trade idea would be the October $80/85 call spread for $1700. Natural gas has lost ground for the last five days but $4.33 continues to support. Prices are starting to look oversold and we like purchasing 50 cent call spreads expecting a rebound in the coming weeks. Indices domestically and abroad showed strength today, rising 1.50-3% climbing to fresh highs. As of this post the S&P is above the 50 day MA and we’ve yet to get clients short. They are prepped and we expect to make a move this week or next; at the moment we are eyeing 75 point ES September put spreads and scaling short into futures for clients. We feel there is limited upside but an additional 3-4% is not out of the question. 30-year bonds broke the 20 day MA, trading down 0.70% as of this post. We’re anticipating a trade down to the 40 day MA at 124′16 unless the equity rally is derailed.Complete Story »

Matthew Bradbard submits: Very suitable fireworks in the markets as we celebrate our Independence. Be safe, we will be back Tuesday… enjoy your long weekend. We feel oil could have another 3-4% downside at the most before we get a bounce higher. As we voiced in recent posts, we expect the $70 level to act as solid support in August. If next week's trade finds buyers, we should have some bullish plays in September or October futures and options. Inside day in natural gas wiped out most of the previous day's gains. Aggressive trades could have used today’s setback to buy as we will stay long with clients as long as $4.50 supports in August. Our featured play is call spreads in October with clients.Complete Story »

Matthew Bradbard submits: What excuse will be given for a disappointing number tomorrow? Heading into a long weekend, tomorrow’s jobs number will likely have a greater impact than normal. Crude oil has fulfilled our short term targets having dropped 8% in the last four sessions. We are not advocating longs yet but would suggest those short to trail stops down. The only way I would change my mind is if stock indices continue to falter. We do not expect August to close below $69/70. Natural gas was higher by 4.50% with some help from a smaller injection in today’s AGA report. We suggest long exposure in October via futures and option spreads as long as yesterday’s lows hold. With some help from Mother Nature via hurricanes and warmer temperatures we could see a trade above the June highs.Yes… we left our clients' short ES position too early and left money on the table. Most of my followers realize by now we do not look for home runs and only look to get consistently on base. We believe equities have overshot to the downside and expect a bounce and will look to re-establish shorts for clients. At this time we are thinking a seller near 1070 and a target once short of 950 in the S&P. We will be exploring bearish plays in Treasuries again for clients in 10-year notes and 30-year bonds. At this point yields may be too low and prices too high.Complete Story »

Matthew Bradbard submits: I am torn on oil therefore have no positions on for clients. In the August contract we violated the trend line that has held since mid-May but quickly rallied back to close slightly lower in today’s session. We’ve seen a 50% Fibonacci retracement at today’s lows but have a sneaking suspicion we could see a probe at $73 before we resume moving higher. We’re suggesting scaling into longs in October natural gas; either futures or options depending on your risk tolerance. We like 50 cent call spreads in October thinking $6 is a reasonable target by then. Ugly last hour in equities; we‘re still looking for a rally to sell for clients. Maybe a fixed jobs number on Friday will get us the bounce we’re looking for. I expect to see 950 in the S&P by fall but we’re more comfortable selling near 1070 than current levels; 1025. A trade back near 2850 in September cocoa we would exit cocoa shorts and start looking to reverse. Sugar was impressive today gaining 5% closing back over the 9 day MA. One of the floor traders I execute orders with said 20 cents today; boy I hope he’s right. On a trade closer to 17 cents we would likely start working out of the remainder of clients' longs. December cotton lost 2.24% today closing at a three week low. Trail down stops to protect profits. A 50% Fibonacci retracement would drag December to 74.25. The sideways consolidation in live cattle in our opinion is the market taking a breath before the next leg up. Use this period to scale into longs. Stay in your lean hog puts; we’re looking for a trade under 74 cents in October. Same old tune gold held the 20 day MA again! Complete Story »

Matthew Bradbard submits: If investors are not interested/confident I am a seller. When August Crude took out $77.70; the 9 day MA mentioned yesterday buyers disappeared and as of this post prices are below the 20 day MA down 3.40% on the day. The path of least resistance is down and this leg could drag prices back to $73/barrel. We see light support at $75; last week's low but we expect it to give way. We will look to get clients long from lower levels. Natural gas is down by nearly 4% having completed a 61.8% Fibonacci retracement. Aggressive traders are advised to scale into October futures while we prefer October 50 cent call spreads anticipating $6/BTU months down the road. ALL our short objectives were realized in the indices today. We would advise booking profits on all shorts or at least to trail down your stops. From here we would like to see a bounce to get clients short again. Just to be clear most of our clients were out ahead of the G-20 so they did not realize the last 40 points in the S&P. 1070-1080 we may get clients short again. A rising dollar most likely leads to lower cocoa; prices got hit for 5% today. For those still hanging onto longs in October sugar on a trade above 16 cents we would exit remaining longs. Cotton traded lower for the third consecutive session; without a bullish surprise in tomorrow's USDA continue to be bearish in December cotton. Coffee looks like we may get a correction lower; our clients will be absent being we see better risk/reward elsewhere. After a 30% appreciation in the last two weeks that should be expected. Treasuries trade to 14 month highs today, as long as indices tumble this will persist but we think this trade is in its final chapters. Live cattle were marginally lower today; we would use a mild set back as a buying opportunity in December. Lean hogs were lower by 1.40% today trading to 2 week lows. Continue to trail down your stops. On a trade closer to 73 in October clients will be looking for an exit door. Complete Story »

Matthew Bradbard submits: Though Crude held the 9 day MA, we did not like the price action. Those long could stay long, but we suggest trailing stops as a settlement below $77.70 on the August contract signals a break lower. We advised our clients who were long to exit at a small profit and move to the sidelines. Additionally we do not like having too much exposure in any one sector and we started buying natural gas for most of our clients that trade energies. Today they were buyers of October 50 cent call spreads. We expect within that time frame to see a trade to $6 BTU.It was an inside day in indices though we still expect a trade above the 20 day MA in coming sessions. In a perfect world we get a trade closer to 1100 in the September S&P to re-establish shorts for clients. Treasuries hit a new contract high today; some clients will be playing defense looking for a retracement to cut losses on their remaining August bond puts.Complete Story »

Matthew Bradbard submits: Sometimes it is better to be lucky than good. Whether it is a technical bounce or on the weather, energies were well bid today. As of this post Crude is up 2.50% and has broken out of the descending triangle that has existed since the beginning of May. As long as August remains above $78 we will start working long futures in Crude next week and should have some more bullish option suggestions. Resistance is seen at $80.40 followed by $82.80. $4.70 appears to be the line in the sand in natural gas so we should have some bullish suggestions next week…stay tuned. Clients were advised to cover their shorts in the S&P today, locking in a profit ahead of the G-20 meeting. We will be looking to re-establish shorts on a dead cat bounce closer to 1100 in the S&P… stay tuned. Treasuries' inverse relationship to equities should continue; on a rally in stocks we would look to exit clients bond puts. A trade near 124′00 in September would fetch a small profit.Complete Story »