Monday, March 8, 2010
Today's Market Guidance
Financial Overview:
The S&P did manage another new high for the move today and in the process that index reached the highest level since January 20th. While the bear camp hopes that the US economy will come back into question soon, the monthly payroll readings on Friday at least temporarily calmed the double dip recession chatter. International equity prices were temporarily cheered on the Greek situation, off suggestions from the French President who suggested that the EU would stand behind their troubled member state. However, the markets still seem to be a bit on edge into the Monday trade, perhaps because there still isn't a visible means of support for Greece from the EU. Apparently a number of noted technical traders are touting a major decline ahead, but those predictions might be getting added air time today because today is exactly 1 year since the ultimate sub-prime low. In looking forward, the scheduled data flow will be reduced today and that could turn the focus of the trade toward internal corporate news and perhaps away from the big picture analysis. At least in the early going today, there would not appear to be a reason to take control away from the bull camp, especially if the market sees the ongoing liquidation of various AIG components, as a sign that the US government is successfully unwinding its financial mess.
DOW:
The March Mini Dow did manage a fresh new high for the move overnight but it failed to take out the January 21st high. The path of least resistance appears to be pointing upward today, unless Washington disrupts the party with more political fighting on the health care reform plan. Regardless of the compromises being made on health care the stock market from time to time has worried that reform will serve to raise their employee expenses. The Commitments of Traders Futures and Options report as of March 2nd for Dow Jones Index $5 showed Non-Commercial traders were net long 20,974 contracts, an increase of 5,717 contracts. The Non-reportable traders were net long 2,861 contracts, an increase of 1,331 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 23,835 contracts. This represents an increase of 7,048 contracts in the net long position held by these traders. Therefore, the Mini Dow has become long enough, to be considered technically overbought.
Rising stochastics at overbought levels warrant some caution for bulls. The market's close above the 9-day moving average suggests the short-term trend remains positive. The market's close above the 2nd swing resistance number is a bullish indication. The next upside objective is 10666. The 9-day RSI over 70 indicates the market is approaching overbought levels. The next area of resistance is around 10637 and 10666, while 1st support hits today at 10503 and below there at 10398.
S&P:
The March S&P did manage a fresh new high for the move before giving back some ground early this morning. The bulls point to the 1147 level as critical resistance zone and potentially as a target, while the bull camp is hopeful that the S&P will fail at close-in support of 1133.90. The Commitments of Traders Futures and Options report as of March 2nd for S&P 500 Stock Index showed Non-Commercial traders were net short 68,358 contracts, a decrease of 1,026 contracts. The Non-reportable traders were net long 60,085 contracts, an increase of 3,636 contracts. Non-Commercial and Non-reportable combined traders held a net short position of 8,273 contracts and that represents a decrease of 4,662 contracts in the net short position held by these traders. With the Spec position as of last Tuesday net short, it would appear that the S&P has the most technical buying capacity of the Mini Dow, Nasdaq and S&P.
Momentum studies are trending higher but have entered overbought levels. A positive signal for trend short-term was given on a close over the 9-bar moving average. There could be more upside follow through since the market closed above the 2nd swing resistance. The near-term upside target is at 1150.81. With a reading over 70, the 9-day RSI is approaching overbought levels. The next area of resistance is around 1145.62 and 1150.81, while 1st support hits today at 1128.38 and below there at 1116.32.
NASDAQ:
The Nasdaq was unable to carve out a fresh new high for the move in the overnight action and that gives off the impression of an intermediate top on the charts. The Commitments of Traders Futures and Options report as of March 2nd for Nasdaq Mini showed Non-Commercial traders were net long 63,673 contracts, an increase of 24,598 contracts. The Non-reportable traders were net long 2,626 contracts, an increase of 5,548 contracts, which represents a change from a net short to net long position. Non-Commercial and Non-reportable combined traders held a net long position of 66,299 contracts. This represents an increase of 30,146 contracts in the net long held by these traders and that could suggest that the Nasdaq has become somewhat overbought with a sharp post COT report rally. The trend might remain up as long as the March Nasdaq manages to hold above close-in support of 1877.
Bonds:
The US Treasury market did manage another fresh new low for the move in the overnight trade, before partially rejecting that weakness. Clearly the better than expected US Non Farm payroll reports from last Friday morning yanked the rug out from under the Treasury market and that pressure was initially given an added push from favorable Greece views in Europe this morning. However, with a number of international equity markets giving back their early gains, the US Treasury market is potentially set to see some light return speculative flight to quality buying. However, the Greece situation would seem to be on a favorable track this morning, as the French President indicated that the EU would stand behind Greece. Clearly, the Treasury market might need to see some uncertainty from the Greece situation to keep attention off $74 Billion of impending US supply later this week. With only a third tier private employment trend survey scheduled for release today, and the market fresh off the monthly US jobs figures, we suspect that the trade will give the scheduled data flow today little attention and that should leave ranges narrowed in Treasuries today. While there would not appear to be much in the way of solid support in June bonds until the even number 116-00 level, it is possible that the market could initially respect closer-in support of 116-16. In June Notes there might be little in way of solid support until the 116-20 level over the coming two trading sessions, with closer-in support today seen at 116-26. The Commitments of Traders Futures and Options report as of March 2nd for U.S. Treasury Bonds showed Non-Commercial traders were net short 98,064 contracts, a decrease of 3,223 contracts. The Non-reportable traders were net short 32,293 contracts, a decrease of 25,497 contracts. Non-Commercial and Non-reportable combined traders held a net short position of 130,357 contracts. Since the bonds rallied aggressively after the COT report was measured, and then gave back all of those gains we suspect that the net short positioning of the Specs comes into the action today only slightly larger than the March 2nd readings. The Commitments of Traders Futures and Options report as of March 2nd for US Treasury 10 Year Notes showed Non-Commercial traders were net short 81,104 contracts, a decrease of 31,998 contracts. The Non-reportable traders were net long 4,404 contracts, an increase of 9,322 contracts, which represents a change from a net short to net long position. Non-Commercial and Non-reportable combined traders held a net short position of 76,700 contracts. This represents a decrease of 41,320 contracts in the net short position held by these traders and that would seem to leave the Note market technically capable of more near term downside action. Given the lack of definitive first tier economic data today, the Treasury market will probably take most of its guidance from the action in the equity markets. Up trend channel support in June bonds is seen at 116-09 today, with similar up trend channel support in June Notes pegged at 117-02.
US Dollar:
The Dollar continues to suffer from a lack of flight to quality anxiety in the marketplace. With the French President voicing support for Greece in the overnight headlines and the overall headline flow relatively thin on the Greece situation that would seem to leave the Dollar facing further flight to quality long liquidation pressure. The Commitments of Traders Futures and Options report as of March 2nd for US Dollar showed Non-Commercial traders were net long 38,076 contracts, a decrease of -400 contracts. The Non-reportable traders were net long 3,203 contracts, an increase of 19 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 41,279 contracts, which represents a decrease of 381 contracts in the net long position held by these traders. Therefore the Dollar was somewhat overbought as of the COT positioning early last week and that probably justifies a measure of ongoing long liquidation selling ahead in the US Dollar. In order for the Dollar to breakout below the 80.00 level, probably requires news of a support mechanism for Greece or patently favorable US economic readings. However, for the Dollar to simply test the 80.00 level probably won't require anything fresh from the headlines.
Gold:
While the bull camp would like to garner some outside market support from the favorable copper, platinum and palladium price action overnight, there does seem to be a distinction this morning between precious and quasi industrial metals markets in the early Monday trade. Some gold traders Are upbeat off the favorable Greece comments from the French President overnight, while others remain skeptical that the Greek debt situation can be fully placed in the rear view mirror. However, the Euro is showing some strength this morning and the overall macro economic outlook seems to have remained positive from last Friday's morning's US news and that could help to underpin the bull case today, especially in the face of a low US data environment. On the other hand, the bear camp can probably point to an ongoing loss of non farm payroll jobs in the most recent jobs report, as a sign that the US economy still remains mired in some form of slowdown. The Commitments of Traders Futures and Options report as of March 2nd for Gold showed Non-Commercial traders were net long 222,905 contracts, an increase of 11,084 contracts. The Non-reportable traders were net long 45,973 contracts, an increase of 6,381 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 268,878 contracts. This represents an increase of 17,465 contracts in the net long position held by these traders.
Silver:
Unfortunately the bull camp in silver market isn't paying that much attention to classic supply side developments lately, as the trade continues to see evidence of very strong demand for silver coins from the US Mint. Apparently January sales for silver coins at the Mint reached over 3.5 million ounces, which was apparently a fresh monthly record for silver coins sales from the Mint. One could also noted that daily silver exchange stocks declined by 252,000 ounces at the end of last week, but that kind of news is probably considered insignificant. Silver appears to be partially happy with the Greece situation this morning but perhaps the trade is a little disappointed with the choppy two sided action in global equity markets. For the time being, silver might continue to behave like a classic physical commodity market that is hopeful of a recovery, even if that recovery might be considered somewhat anemic. The Commitments of Traders Futures and Options report as of March 2nd for Silver showed Non-Commercial traders were net long 30,890 contracts, an increase of 3,994 contracts. The Non-reportable traders were net long 10,797 contracts, a decrease of -2,416 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 41,687 contracts. This represents an increase of 1,578 contracts in the net long position held by these traders.
Crude Oil:
Crude oil saw a firmer trade in the early overnight action, but the market has backed away from overnight highs. Although the market seems to have embraced a better macro economic view with last week's employment news raising optimism for a recovery in fuel demand, crude oil also looks increasingly vulnerable to profit taking up at these price levels. April crude oil reached the highest price level since January 12th in the overnight trade with the market gaining on residual strength following last week's US employment news showing a smaller than expected decline in payrolls suggesting economic conditions are improving the outlook for a recovery in oil demand. Indications last week that China would maintain an accommodative monetary and fiscal policy and news overnight that China plans to build two more strategic oil reserve bases suggest oil demand from the world's second largest consumer will remain strong. While the uptrend puts April crude oil on course to eventually retest the January high, the market is also running into tough overhead resistance near $82.50. Daily technical indicators have risen to an overbought extreme while the March 2nd COT report with options for crude oil showed funds increased their net long position in crude oil to 171,789 contracts which is under stated since the market has rallied another $2.73 per barrel since the report was measured. As a result, the net long position of the funds is likely a lot closer to the record net long level of 208,733 contracts reached in January of this year. We are also concerned the rally in crude oil could stall since there are no major economic indicators being released today to provide a fresh flow of positive news. In fact, we suspect oil market direction will likely to be closely tied to the ebb and flow in the Dollar today. Oil markets gained as the dollar edged lower overnight after the French President said the European countries would help Greece manage its debt. But oil markets have back peddled from overnight highs in tandem with the dollar recovering from overnight lows and we suspect more aggressive chart based profit taking in April crude oil will be seen if last Friday's close fails to hold. If the Dollar gains upside traction this session, we suspect April crude oil is at risk for a fall back to the $80.78 to $80.47 price range. On the other hand, in order for April crude oil to make a move above $82.50 this session will likely require a sharp break in the dollar and perhaps a strong rally in equities in order to offset the oil market's overbought technical condition and inspire fresh speculative buying up at these high price levels.
Natural Gas:
Natural gas was pushed to a new low for the move in the overnight trade with a warmer temperature outlook raising supply side concerns since a weak economic recovery suggests industrial fuel demand will likely be slow to return. April natural gas was pushed to a new contract low undermined by some private weather forecasters predicting temperatures to reach into the high 40's and even 50's over the next two weeks raising concerns that winter heating demand will be cut short. Despite signs that economic conditions are improving, the market still lacks confidence that industrial fuel demand will be strong enough to offset rising output this spring since producers have steadily raised the number of drilling rigs in operation, up 21 last week to a new one year high. The market is in a well entrenched down trend and eventually we see April natural gas falling back to the $4.15 to $4.00 price range. The March 2nd COT report with options also shows a bearish setup for natural gas with funds increasing their net short position to 79,279 contracts while small traders remain net long 31,464 contracts. However, in the near-term there is some technical risk for short position holders since daily indicators show April natural gas has fallen to an oversold extreme leaving the market vulnerable to a short covering bounce. But the fundamental setup suggests technical corrections in natural gas will be short lived. In fact, we suspect trend following funds will be aggressive sellers of natural gas at higher price levels, especially since their current net short position is well below the record net short level held in July 2008 leaving the market with ample selling capacity.
The S&P did manage another new high for the move today and in the process that index reached the highest level since January 20th. While the bear camp hopes that the US economy will come back into question soon, the monthly payroll readings on Friday at least temporarily calmed the double dip recession chatter. International equity prices were temporarily cheered on the Greek situation, off suggestions from the French President who suggested that the EU would stand behind their troubled member state. However, the markets still seem to be a bit on edge into the Monday trade, perhaps because there still isn't a visible means of support for Greece from the EU. Apparently a number of noted technical traders are touting a major decline ahead, but those predictions might be getting added air time today because today is exactly 1 year since the ultimate sub-prime low. In looking forward, the scheduled data flow will be reduced today and that could turn the focus of the trade toward internal corporate news and perhaps away from the big picture analysis. At least in the early going today, there would not appear to be a reason to take control away from the bull camp, especially if the market sees the ongoing liquidation of various AIG components, as a sign that the US government is successfully unwinding its financial mess.
DOW:
The March Mini Dow did manage a fresh new high for the move overnight but it failed to take out the January 21st high. The path of least resistance appears to be pointing upward today, unless Washington disrupts the party with more political fighting on the health care reform plan. Regardless of the compromises being made on health care the stock market from time to time has worried that reform will serve to raise their employee expenses. The Commitments of Traders Futures and Options report as of March 2nd for Dow Jones Index $5 showed Non-Commercial traders were net long 20,974 contracts, an increase of 5,717 contracts. The Non-reportable traders were net long 2,861 contracts, an increase of 1,331 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 23,835 contracts. This represents an increase of 7,048 contracts in the net long position held by these traders. Therefore, the Mini Dow has become long enough, to be considered technically overbought.
Rising stochastics at overbought levels warrant some caution for bulls. The market's close above the 9-day moving average suggests the short-term trend remains positive. The market's close above the 2nd swing resistance number is a bullish indication. The next upside objective is 10666. The 9-day RSI over 70 indicates the market is approaching overbought levels. The next area of resistance is around 10637 and 10666, while 1st support hits today at 10503 and below there at 10398.
S&P:
The March S&P did manage a fresh new high for the move before giving back some ground early this morning. The bulls point to the 1147 level as critical resistance zone and potentially as a target, while the bull camp is hopeful that the S&P will fail at close-in support of 1133.90. The Commitments of Traders Futures and Options report as of March 2nd for S&P 500 Stock Index showed Non-Commercial traders were net short 68,358 contracts, a decrease of 1,026 contracts. The Non-reportable traders were net long 60,085 contracts, an increase of 3,636 contracts. Non-Commercial and Non-reportable combined traders held a net short position of 8,273 contracts and that represents a decrease of 4,662 contracts in the net short position held by these traders. With the Spec position as of last Tuesday net short, it would appear that the S&P has the most technical buying capacity of the Mini Dow, Nasdaq and S&P.
Momentum studies are trending higher but have entered overbought levels. A positive signal for trend short-term was given on a close over the 9-bar moving average. There could be more upside follow through since the market closed above the 2nd swing resistance. The near-term upside target is at 1150.81. With a reading over 70, the 9-day RSI is approaching overbought levels. The next area of resistance is around 1145.62 and 1150.81, while 1st support hits today at 1128.38 and below there at 1116.32.
NASDAQ:
The Nasdaq was unable to carve out a fresh new high for the move in the overnight action and that gives off the impression of an intermediate top on the charts. The Commitments of Traders Futures and Options report as of March 2nd for Nasdaq Mini showed Non-Commercial traders were net long 63,673 contracts, an increase of 24,598 contracts. The Non-reportable traders were net long 2,626 contracts, an increase of 5,548 contracts, which represents a change from a net short to net long position. Non-Commercial and Non-reportable combined traders held a net long position of 66,299 contracts. This represents an increase of 30,146 contracts in the net long held by these traders and that could suggest that the Nasdaq has become somewhat overbought with a sharp post COT report rally. The trend might remain up as long as the March Nasdaq manages to hold above close-in support of 1877.
Bonds:
The US Treasury market did manage another fresh new low for the move in the overnight trade, before partially rejecting that weakness. Clearly the better than expected US Non Farm payroll reports from last Friday morning yanked the rug out from under the Treasury market and that pressure was initially given an added push from favorable Greece views in Europe this morning. However, with a number of international equity markets giving back their early gains, the US Treasury market is potentially set to see some light return speculative flight to quality buying. However, the Greece situation would seem to be on a favorable track this morning, as the French President indicated that the EU would stand behind Greece. Clearly, the Treasury market might need to see some uncertainty from the Greece situation to keep attention off $74 Billion of impending US supply later this week. With only a third tier private employment trend survey scheduled for release today, and the market fresh off the monthly US jobs figures, we suspect that the trade will give the scheduled data flow today little attention and that should leave ranges narrowed in Treasuries today. While there would not appear to be much in the way of solid support in June bonds until the even number 116-00 level, it is possible that the market could initially respect closer-in support of 116-16. In June Notes there might be little in way of solid support until the 116-20 level over the coming two trading sessions, with closer-in support today seen at 116-26. The Commitments of Traders Futures and Options report as of March 2nd for U.S. Treasury Bonds showed Non-Commercial traders were net short 98,064 contracts, a decrease of 3,223 contracts. The Non-reportable traders were net short 32,293 contracts, a decrease of 25,497 contracts. Non-Commercial and Non-reportable combined traders held a net short position of 130,357 contracts. Since the bonds rallied aggressively after the COT report was measured, and then gave back all of those gains we suspect that the net short positioning of the Specs comes into the action today only slightly larger than the March 2nd readings. The Commitments of Traders Futures and Options report as of March 2nd for US Treasury 10 Year Notes showed Non-Commercial traders were net short 81,104 contracts, a decrease of 31,998 contracts. The Non-reportable traders were net long 4,404 contracts, an increase of 9,322 contracts, which represents a change from a net short to net long position. Non-Commercial and Non-reportable combined traders held a net short position of 76,700 contracts. This represents a decrease of 41,320 contracts in the net short position held by these traders and that would seem to leave the Note market technically capable of more near term downside action. Given the lack of definitive first tier economic data today, the Treasury market will probably take most of its guidance from the action in the equity markets. Up trend channel support in June bonds is seen at 116-09 today, with similar up trend channel support in June Notes pegged at 117-02.
US Dollar:
The Dollar continues to suffer from a lack of flight to quality anxiety in the marketplace. With the French President voicing support for Greece in the overnight headlines and the overall headline flow relatively thin on the Greece situation that would seem to leave the Dollar facing further flight to quality long liquidation pressure. The Commitments of Traders Futures and Options report as of March 2nd for US Dollar showed Non-Commercial traders were net long 38,076 contracts, a decrease of -400 contracts. The Non-reportable traders were net long 3,203 contracts, an increase of 19 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 41,279 contracts, which represents a decrease of 381 contracts in the net long position held by these traders. Therefore the Dollar was somewhat overbought as of the COT positioning early last week and that probably justifies a measure of ongoing long liquidation selling ahead in the US Dollar. In order for the Dollar to breakout below the 80.00 level, probably requires news of a support mechanism for Greece or patently favorable US economic readings. However, for the Dollar to simply test the 80.00 level probably won't require anything fresh from the headlines.
Gold:
While the bull camp would like to garner some outside market support from the favorable copper, platinum and palladium price action overnight, there does seem to be a distinction this morning between precious and quasi industrial metals markets in the early Monday trade. Some gold traders Are upbeat off the favorable Greece comments from the French President overnight, while others remain skeptical that the Greek debt situation can be fully placed in the rear view mirror. However, the Euro is showing some strength this morning and the overall macro economic outlook seems to have remained positive from last Friday's morning's US news and that could help to underpin the bull case today, especially in the face of a low US data environment. On the other hand, the bear camp can probably point to an ongoing loss of non farm payroll jobs in the most recent jobs report, as a sign that the US economy still remains mired in some form of slowdown. The Commitments of Traders Futures and Options report as of March 2nd for Gold showed Non-Commercial traders were net long 222,905 contracts, an increase of 11,084 contracts. The Non-reportable traders were net long 45,973 contracts, an increase of 6,381 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 268,878 contracts. This represents an increase of 17,465 contracts in the net long position held by these traders.
Silver:
Unfortunately the bull camp in silver market isn't paying that much attention to classic supply side developments lately, as the trade continues to see evidence of very strong demand for silver coins from the US Mint. Apparently January sales for silver coins at the Mint reached over 3.5 million ounces, which was apparently a fresh monthly record for silver coins sales from the Mint. One could also noted that daily silver exchange stocks declined by 252,000 ounces at the end of last week, but that kind of news is probably considered insignificant. Silver appears to be partially happy with the Greece situation this morning but perhaps the trade is a little disappointed with the choppy two sided action in global equity markets. For the time being, silver might continue to behave like a classic physical commodity market that is hopeful of a recovery, even if that recovery might be considered somewhat anemic. The Commitments of Traders Futures and Options report as of March 2nd for Silver showed Non-Commercial traders were net long 30,890 contracts, an increase of 3,994 contracts. The Non-reportable traders were net long 10,797 contracts, a decrease of -2,416 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 41,687 contracts. This represents an increase of 1,578 contracts in the net long position held by these traders.
Crude Oil:
Crude oil saw a firmer trade in the early overnight action, but the market has backed away from overnight highs. Although the market seems to have embraced a better macro economic view with last week's employment news raising optimism for a recovery in fuel demand, crude oil also looks increasingly vulnerable to profit taking up at these price levels. April crude oil reached the highest price level since January 12th in the overnight trade with the market gaining on residual strength following last week's US employment news showing a smaller than expected decline in payrolls suggesting economic conditions are improving the outlook for a recovery in oil demand. Indications last week that China would maintain an accommodative monetary and fiscal policy and news overnight that China plans to build two more strategic oil reserve bases suggest oil demand from the world's second largest consumer will remain strong. While the uptrend puts April crude oil on course to eventually retest the January high, the market is also running into tough overhead resistance near $82.50. Daily technical indicators have risen to an overbought extreme while the March 2nd COT report with options for crude oil showed funds increased their net long position in crude oil to 171,789 contracts which is under stated since the market has rallied another $2.73 per barrel since the report was measured. As a result, the net long position of the funds is likely a lot closer to the record net long level of 208,733 contracts reached in January of this year. We are also concerned the rally in crude oil could stall since there are no major economic indicators being released today to provide a fresh flow of positive news. In fact, we suspect oil market direction will likely to be closely tied to the ebb and flow in the Dollar today. Oil markets gained as the dollar edged lower overnight after the French President said the European countries would help Greece manage its debt. But oil markets have back peddled from overnight highs in tandem with the dollar recovering from overnight lows and we suspect more aggressive chart based profit taking in April crude oil will be seen if last Friday's close fails to hold. If the Dollar gains upside traction this session, we suspect April crude oil is at risk for a fall back to the $80.78 to $80.47 price range. On the other hand, in order for April crude oil to make a move above $82.50 this session will likely require a sharp break in the dollar and perhaps a strong rally in equities in order to offset the oil market's overbought technical condition and inspire fresh speculative buying up at these high price levels.
Natural Gas:
Natural gas was pushed to a new low for the move in the overnight trade with a warmer temperature outlook raising supply side concerns since a weak economic recovery suggests industrial fuel demand will likely be slow to return. April natural gas was pushed to a new contract low undermined by some private weather forecasters predicting temperatures to reach into the high 40's and even 50's over the next two weeks raising concerns that winter heating demand will be cut short. Despite signs that economic conditions are improving, the market still lacks confidence that industrial fuel demand will be strong enough to offset rising output this spring since producers have steadily raised the number of drilling rigs in operation, up 21 last week to a new one year high. The market is in a well entrenched down trend and eventually we see April natural gas falling back to the $4.15 to $4.00 price range. The March 2nd COT report with options also shows a bearish setup for natural gas with funds increasing their net short position to 79,279 contracts while small traders remain net long 31,464 contracts. However, in the near-term there is some technical risk for short position holders since daily indicators show April natural gas has fallen to an oversold extreme leaving the market vulnerable to a short covering bounce. But the fundamental setup suggests technical corrections in natural gas will be short lived. In fact, we suspect trend following funds will be aggressive sellers of natural gas at higher price levels, especially since their current net short position is well below the record net short level held in July 2008 leaving the market with ample selling capacity.
Rut Spread Updates.
Well with the markets big move on friday we will be forced to close our Apr 690/700 call spread for a loss. We already have a spread at 710/720 so we are not able to roll this one up. Putting a working order in to buy back the 690/700 @ $2.25 debit. This might need to be pushed up if the we don't get filled and the market continues to move higher.
We are also going to put an order in to open up a new put spread. Sell 2 Apr 590/580 put spreads for a limit of $0.50.
We are also going to put an order in to open up a new put spread. Sell 2 Apr 590/580 put spreads for a limit of $0.50.
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