Free Investing

Hickey and Walters (Bespoke) submit:
The stock market is up about 65% since the 3/9/09 low, but oil has actually outperformed stocks over this time period with a gain of 72.64%. Below we highlight the performance of ten major commodities over the last year. As shown, copper is up the most with a gain of 108%, while orange juice ranks second with a gain of 101%. Of the three main precious metals, platinum is up the most at 50%, followed by silver at +33.73%, and then gold at +22.16%. Even natural gas is up since the March 9th, 2009 low with a gain of 16%. Wheat and corn are the only commodities shown that are down over the last year. Corn is down 11%, while wheat is down 18.27%.click to enlargeComplete Story »

Matthew Bradbard submits: The phrase 'March Madness' is coined for the college basketball tournament, but I think it is an accurate description of what to expect as a trader this month. At its highs today, oil was less than $3/barrel from making new highs on the year. Being bearish for the last 1-2 weeks has made our clients no money, but we still feel a trade to $75/76 is imminent. We are not disputing a trade in summer is likely up to $90, but first, a correction. We still favor $5 put spreads. Natural gas should finish down 3.5-4.0% lower on the week. That is not too bad! Clients have a small long position in April futures and June call spreads, and at the moment are all under water. We expect the next 2 weeks to be better to us in energies; that means crude down and natural gas up. Complete Story »

Andrew Horowitz submits: Volume is one of those indicators that cannot be ignored. It does not show an overbought or oversold signal and it does not oscillate. What it does do is provide a measure of conviction for a market and a better reading on investor sentiment. Most recently, it almost seems that there is an apathetic mood as investors are awaiting for equity markets to break one way or another. During that time (since December 2009), volume has been tapering off, unless it is a down day and sellers appear all too ready to dump shares.Complete Story »

Paco Ahlgren submits: This technical analysis video suggests the silver market may be in for some short-term consolidation, and even a period of slight downturn. I believe there are a few reasons for the potential pullback we see in this technical analysis video:Complete Story »

John Dalt submits:Big news yesterday as Ben Bernanke, Federal Reserve Chairman, testified before the House Financial Services Committee. Smooth talking Ben told us that lower interest rates would be held for an extended period. This was manna to the markets as traders bid equities higher on a cheap dollar. News crept onto the trading floor that the Treasury’s auction of $42 billion dollars in five-year bonds did not go as well as expected. Bernanke states that interest rates will stay low for an extended period while the economy recovers. Five-year bonds sell at a higher interest rate. Hum. Investors bought $44 billion in two-year notes on Tuesday aggressively, when the stock market was falling. This flight to quality held interest rates down. The longer term bonds did not do as well on Wednesday, pushing interest rates higher.Complete Story »

Cliff Wachtel submits: Many key risk assets, including the S&P 500, the EUR/USD, and crude oil are again approaching multi-month resistance levels on

• more ‘less bad’ news from the US
• some positive news from China and Australia
• earnings reports that showed overall revenue as well as earnings improvement
• A new calm about the EU debt crisis as the EU and world agree to take another look on March 16th.

Overall summary key eventsComplete Story »

Andrew Wilkinson submits: ConocoPhillips (COP) – A short strangle employed in the May contract on ConocoPhillips this afternoon suggests one investor expects shares of the underlying stock to remain range-bound through expiration. COP’s shares are down 1.25% to $49.29 with approximately thirty minutes remaining in the trading session. The trader ‘copped’ a strangle play by selling 3,000 puts at the May $46 strike for a premium of $1.77 apiece in combination with the sale of 3,000 calls at the May $52.5 strike for an average premium of $1.13 each. The investor responsible for the transaction pockets a gross premium of $2.90 per contract, and keeps the full amount of premium if ConocoPhillips’ shares trade within the confines of the strike prices described through expiration in May. The short position undertaken in both calls and puts leaves the trader vulnerable to potentially devastating losses should COP-shares swing dramatically in the next few months. Losses accumulate for the investor if shares rally above the upper breakeven price of $55.40, or if the price of the stock plummets through the lower breakeven point at $43.10, ahead of expiration day. Potash Corp. of Saskatchewan, Inc. (POT) – Fertilizer and feed products manufacturer, Potash Corp., attracted bullish options traders this afternoon. POT-shares are up 0.75% today to $114.01 just ahead of the closing bell, which contributes to the more than 14.50% rally in the price of the underlying stock since February 5, 2010, when shares stood at $99.36. Optimistic trading patterns appeared in the March contract where one investor established a ratio call spread. The transaction involved the purchase of roughly 4,500 calls at the March $125 strike for a premium of $1.77 apiece, marked against the sale of about 9,000 calls at the higher March $135 strike for an average premium of $0.52 each. The net cost of the ratio spread amounts to $0.73 per contract. Maximum potential profits of $9.27 per contract pad the investor’s wallet if Potash’s shares rally sharply by 18.50% over the current day’s price to reach $135.00 by March expiration. Shares must increase at least 10.25% before the investor breaks even on the spread at a share price of $125.73. Complete Story »

Matthew Bradbard submits: We wanted confirmation before taking a stance in crude, and with prices convincingly higher today we are thinking the recent shakeout may be all the bears get. Today’s move carried prices back above the 200-day moving average, and at the highs we traded to the 40-day moving average. As long as April can hold above $76 on a closing basis, we suggest light long exposure via futures in April or call spreads in June. We’ve yet to make a move for clients but the June $80/85 is a spread we may be interested in; today the price is $2000... stay tuned. RBOB was higher by 3% today; clients are long June expecting a trade to $2.15/2.20. We are interested in buying May natural gas for clients on a further correction. A trade closer to $5 most likely gets them in the trade.Indices are back above the 100-day moving average as of the settlement today. As suggested in our commentary this morning, we would use the current rally to trade out of longs, establish hedges or for the speculator to get short. Clients started buying June ES 1000 puts today for $1450/per.Complete Story »

Hard Assets Investor submits: By Brad ZiglerThere are a lot of disappointed investors wondering why silver hasn't done a better job catching up to gold. You can see their predicament in a chart plotting silver's relative strength. Think of it as a gold/silver ratio turned upside downComplete Story »

Matthew Bradbard submits: Is there a bubble in China? I do not think so as it relates to commodities, but expect volatility as they will be absent from the markets next week. Though past performance is not indicative of future results, I recall last year big swings and would expect the same this year. All things being equal, volatility is already present so just a heads up.As for the markets: Oil finished lower but pared its losses. Our clients have no exposure but we will be buying dips in the weeks to come, given the opportunity. A trade below $70 should be bought! We like the action in natural gas today. In the next 2 weeks we will be looking to gain long exposure in the May contract for clients via options and futures. In years past, when natty bottoms in mid-winter we’ve seen a trade higher into late April (15 out of the last 19 years). Past performance is not indicative of future results.Complete Story »