ZM railled in the last 15mins of trading and closed just over 270 so will will look to exit the position when the market reopens at 6pm this evening for about a 2 point loss if we move any higher.
Set stop loss @ 271.3 above today's high.
Thursday, March 18, 2010
Swing Futures Entry
We are going short 1 Soymeal contract (ZM) @ 268.8
Stop is a close above 269.8
Target is @ 244.8
The short-term positive news in the market appears to be temporary in nature and traders see the possibility of larger than expected plantings for all crops this spring if the weather permits. July soybean selling resistance comes in at 966 with 940 3/4 and 893 as support. July meal selling resistance comes in at 265.90 and with 246.60 as next downside objective. July oil buying support is back at 38.58.
The outlook for a steady flow of new crop soybeans on the world market along with weakness in the energy markets helped to pressure soybeans overnight. Traders were surprised with the strong gains in soybeans and the complex yesterday with July soybeans jumping 40 cents off of Monday's lows. Some shipping concerns in Brazil and ideas that Argentina producers may be unwilling to sell soybeans at a cheap level helped to spark aggressive short-covering and new fund buying yesterday. Southern Brazil looks wet over the near-term but dryness from Parana north should help boost harvest activity into early next week. Argentina rains should slow early harvest but could be seen as beneficial to late filling crops. There was more discussion about shipping delays at Brazilian ports but some sources are indicating that the delays are minimal at the port of Santos and well within the normal range at the port of Paranagua. Basis levels at the Gulf were mostly steady to lower yesterday due to slowing demand. Meal posted a moderate gain on oil, continuing the sharp correction that began on Monday. Key growing areas in Malaysia are expected to see lower palm oil production ahead due to dry weather with production cuts of 10-15% noted as a possibility in the impacted areas. Traders are also keeping a close eye on dry conditions in parts of China. Japan has turned more to China for meal imports due to higher prices and a tighter supply out of India this year. Massive imports of soybeans by China have left meal supply high. Traders continue to discuss snowmelt flooding issues in the northern Midwest and the early melt may give the ground time to dry ahead of planting season. However, cold and wet weather returns to the Midwest early next week and again later next week and an active weather pattern looks to persist through the end of the month. Traders will keep a close eye on weekly export sales news today after last weeks 8-year low in soybean sales due to cancellations from China.
Stop is a close above 269.8
Target is @ 244.8
The short-term positive news in the market appears to be temporary in nature and traders see the possibility of larger than expected plantings for all crops this spring if the weather permits. July soybean selling resistance comes in at 966 with 940 3/4 and 893 as support. July meal selling resistance comes in at 265.90 and with 246.60 as next downside objective. July oil buying support is back at 38.58.
The outlook for a steady flow of new crop soybeans on the world market along with weakness in the energy markets helped to pressure soybeans overnight. Traders were surprised with the strong gains in soybeans and the complex yesterday with July soybeans jumping 40 cents off of Monday's lows. Some shipping concerns in Brazil and ideas that Argentina producers may be unwilling to sell soybeans at a cheap level helped to spark aggressive short-covering and new fund buying yesterday. Southern Brazil looks wet over the near-term but dryness from Parana north should help boost harvest activity into early next week. Argentina rains should slow early harvest but could be seen as beneficial to late filling crops. There was more discussion about shipping delays at Brazilian ports but some sources are indicating that the delays are minimal at the port of Santos and well within the normal range at the port of Paranagua. Basis levels at the Gulf were mostly steady to lower yesterday due to slowing demand. Meal posted a moderate gain on oil, continuing the sharp correction that began on Monday. Key growing areas in Malaysia are expected to see lower palm oil production ahead due to dry weather with production cuts of 10-15% noted as a possibility in the impacted areas. Traders are also keeping a close eye on dry conditions in parts of China. Japan has turned more to China for meal imports due to higher prices and a tighter supply out of India this year. Massive imports of soybeans by China have left meal supply high. Traders continue to discuss snowmelt flooding issues in the northern Midwest and the early melt may give the ground time to dry ahead of planting season. However, cold and wet weather returns to the Midwest early next week and again later next week and an active weather pattern looks to persist through the end of the month. Traders will keep a close eye on weekly export sales news today after last weeks 8-year low in soybean sales due to cancellations from China.
Today's Market Guidance
Financial Overview:
Most markets are showing a bit of corrective action in the early going today and that weakness is thought to be the result of fresh Greece debt concerns. Apparently some Greek officials are concerned that debt payments will be so high, that austerity efforts will be unable to return Greece to a steady fiscal condition and that news serves to send some bulls to the sidelines. However, the equity markets were cheered by the news of muted inflation in the US from the prior trading session, as that could allow the US to stick with a low rate environment for a longer period of time. Apparently the market isn't overly concerned about the lack of forward progress in the US economy, as patently weak data earlier this week was largely discounted. However, the market will be presented with a long list of US data today and given the breadth of the data flows today, one might expect a series of back and forth gyrations on the charts. Given the persistent upward bias on the charts recently, one has to leave the bull camp with the edge, unless the brunt of the data comes out weak and then one might expect a nominal corrective setback on the charts.
DOW:
The June Mini Dow comes into the Thursday morning trade in a slight corrective posture. Up trend channel support in the June Mini Dow is seen all the way down at 10,499 today and that support rises to 10,525 on Friday. Closer-in support in the June Mini Dow is seen at 10,632 and we would expect that level to support prices today, unless there is a definitively weak reading from the scheduled report front. Traders might also begin to watch for the markets reaction to the health care reform end game, as that issue could cause a noted reaction in equity prices.
The rally brought the market to a new contract high. Momentum studies are trending higher but have entered overbought levels. The market's close above the 9-day moving average suggests the short-term trend remains positive. With the close over the 1st swing resistance number, the market is in a moderately positive position. The near-term upside target is at 10760. The market is approaching overbought levels with an RSI over 70. The next area of resistance is around 10724 and 10760, while 1st support hits today at 10634 and below there at 10580.
S&P:
The S&P comes into the early morning action today with some moderate technical damage on the charts. Unfortunately the June S&P doesn't have solid chart support until 1154.80 because of the sharp compacted gains forged at the beginning of the week. We would suggest that the S&P really needs something positive from the early data today just to shift the bias away from the downside. In fact, we would suggest that the S&P needs an ongoing claims decline in excess of 30,000 just to erase fresh concerns off the Greek debt issue.
A new contract high was made on the rally. Studies are showing positive momentum but are now in overbought territory, so some caution is warranted. The close above the 9-day moving average is a positive short-term indicator for trend. The market setup is supportive for early gains with the close over the 1st swing resistance. The near-term upside target is at 1171.87. The 9-day RSI over 70 indicates the market is approaching overbought levels. The next area of resistance is around 1166.75 and 1171.87, while 1st support hits today at 1155.25 and below there at 1148.88.
NASDAQ:
Not surprisingly the June Nasdaq is also starting the Thursday morning trade off in a choppy posture. Critical support in the June Nasdaq today is seen at 1928.50, with up trend channel support not seen until 1906.75. Since the Nasdaq has not seen the typical flow of favorable tech sector news this week, it really needs some help from the US claims data in order to throw off what could be the beginning of a weak 2-3 day corrective setback.
Bonds:
Equities are showing some initial weakness today off reports that Greek officials are doubtful of any aid coming from fellow EU members and that in turn has provided a slight flight to quality lift for US Treasury prices. With the Treasury market basking in the news of muted inflation from the PPI report yesterday, the fear of rates rising in the US is temporarily put on the back shelf and that leaves an upward price bias in place. In looking forward, the market will be faced with another US inflation reading this morning, this time from the consumer level (CPI) but that report has tended to be less volatile than the PPI report. Estimates for the US CPI call for a minimal up tick and unless there is a surprise result, the CPI data should be overshadowed by initial and ongoing claims readings. With Treasury bonds managing another new high for the move overnight and in turn reaching the highest level since December 8th, one could suggest that trade now needs definitively supportive data to 'markedly' add to this week's gains. While some estimates are calling for a minor improvement in the Philly Fed Manufacturing survey this morning, we suspect that data will be of limited importance unless the readings come in well off expectations. All things considered, the bull camp does look to retain a slight edge off Greek uncertainty and also because of the muted US inflation track. Therefore, to take control away from the bull camp, probably requires a big decline in ongoing claims, which in turn prompts the trade to begin to fear the next monthly payroll reading. However, with the Philly Fed, Chicago Fed and Conference Board all scheduled to come out with data this morning in the wake of the US claims data, the trade could be over exposed to 2nd and 3rd tier data and that in turn could reduce the magnitude of price reactions today. We suspect that the net impact of the avalanche of US data this morning, will leave the trade with the opinion that the US economy lacks definitive direction and that should leave the bulls with minimal control. In fact, with the Fed reiterating their intention to leave interest rates low earlier this week, the bull camp will continue to get the benefit of the doubt in the face of non descript data. If there is a surprise number today, it will likely come from either the CPI or ongoing claims and therefore the trade should take the early numbers as the primary indicators of the Thursday trading session. While two Fed members are scheduled to participate in a panel discussion this morning, we doubt that the Fed will change its stance so soon after the most recent FOMC statement release. Close-in support in June bonds is seen at 117-28 and at 117-05 in June Notes. In order to break down below close-in support, probably requires a bigger than expected ongoing claims decline!
US Dollar:
The Dollar is seeing a weak initial bid off renewed Greece debt concerns. However, seeing a rise in Gross UK borrowings and partially upbeat economic views from Japan have served to tamp down global slowing fears and that has served to temper the upward bias in the Dollar. However, it would seem like the Non Dollar currencies and a host of physical commodity markets are coming off a euphoria wave that seemed to be fostered by the US Fed stance, anecdotal global growth talk and because of benign US inflation readings. If the US numbers today rekindle some uncertainty toward the US recovery pace, that could in turn tamp down optimism for 'risk' associated trades (Non Dollar currencies) and that logically leaves the Dollar with a fresh bid. In short, slowing and uncertainty favor the Dollar and in the early Thursday action, the Dollar would seem to be set up for at least a modest short covering bounce. On the other hand, we suspect that the Dollar will be unable to generate much in the way of aggressive upside momentum and that could mean that resistance of 80.50 could be fairly solid.
Gold:
April gold comes into the opening today close to unchanged levels, but still well above the level where the market was earlier this week. Overnight ranges have been small, as many players may be waiting for U.S. economic numbers later this morning. The trade expects some spillover guidance from the currency markets, in the wake of the US data flows this morning. However, seeing renewed Greek debt concerns overnight might leave the Dollar well bid this morning and that has led some gold traders to suggest that something positive is needed from the US numbers this morning or the bear camp in gold might be able to regain a foothold. The gold market is probable seeing some support from World Gold Council statements overnight, which touted 'strong demand' for gold ahead. The WGC also suggested that they expected Central Banks to be players in their strong demand forecast and that is likely to be seen as a fresh bull argument. The WGC didn't leave out many demand sectors in their rosy outlook, as they also hinted at improved jewelry demand. While the gold market hasn't paid that much attention to classic demand side stories lately, the WGC dialogue probably gives the bull camp some fresh confidence into what could be a fairly active trading session ahead.
Silver:
The May silver contract comes into the action this morning mostly sitting on unchanged levels. It is possible that silver is garnering some support from up beat World Gold Council gold demand forecasts, but it is also clear that silver and other physical commodity markets are being put off balance somewhat because of renewed Dollar strength. It goes without saying, that renewed Greek debt concerns have rekindled currency related pressure in silver and with an extremely active US report slate today, traders should be braced for some increased silver price volatility. One might point to another rise in silver exchange stocks overnight as a negative development, but given the breadth of outside market news ahead and the favorable World Gold Council predictions of solid gold demand, it is possible that minimally negative supply side news in silver will be given limited credence today. With the markets seemingly questioning the pace of the US recovery, the heavy flow of US scheduled news today is likely to take on added importance to the silver trade.
Crude Oil:
Crude oil has seen a lower trade overnight with the market giving back a good portion of the previous day's gains on profit taking tied to a stronger Dollar, macro economic doubts and concerns that china will take further steps to tighten monetary conditions that could undermine the global recovery in oil demand. The price direction in crude oil has been closely tied to the ebb and flow in the dollar and most of the selling in crude oil this morning looks to be currency connected. Oil markets have fallen back as the Dollar gained upside traction on fresh concerns that Greece will have difficulty securing an aid package from the European Union. Safe haven demand for the dollar jumped as it still appears that European leaders are in disagreement on whether to provide funding to Greece and investors have scaled back risk at crude oil's expense. As long as the Greece situation remains unresolved, doubts about the pace of the global economic recovery could undercut optimism for a recovery in oil demand. In fact, it looks as if oil demand confidence has also been undermined by reports that the government has instructed banks in China to stop lending to property developers which further raises concerns that tightening liquidity conditions in China could slow the global recovery in oil demand. Oil market sentiment may have also been dented by reports that a major Russian oil company is continuing to supply oil despite an ongoing legal battle that threatened to prevent oil exports to Western countries. Profit taking in crude oil may have also been inspired by the EIA reporting crude oil stocks rose for the seventh straight week and May crude oil stalling out near the upper end of the market's recent price range. With speculators already holding near a record net long position in this market, we suspect a stronger optimistic view toward a recovery in oil demand will need to take hold and perhaps more importantly a weaker move in the Dollar in order to raises investor risk appetite and provide a fresh incentive to buy crude oil up at these high levels. Today's reports on consumer inflation and jobless claims will provide fresh economic insight. Since oil prices are being so strongly influenced by the direction in the dollar, oil markets will need the economic or political news flow to undermine the strength in the dollar in order to avoid additional profit taking and reverse the oil market's course to the upside. Despite the price weakness overnight, oil markets have generally had an upward price bias as profit taking breaks have so far lacked any follow through while lower oil price have continued to attract fresh buyers. If the currency connected pressure subsides, we suspect bullish confidence in the oil markets could quickly return since yesterday's EIA report showing a decline in gasoline stocks, total product demand up 3.5% and refinery operations edging lower certainly improves the market's fundamental setup. But oil market direction continues to hinge on the Dollar. If yesterday's low fails to hold in crude oil, look for more aggressive chart based selling that could pressure May crude oil back towards $81.16. On the other hand, don't be surprise to see May crude oil reverse course to the upside if the Dollar starts to back peddle.
Natural Gas:
May natural gas has edged lower overnight as the market continues on its stair step decline towards a test of the $4.00 price level. The market's extreme oversold condition leaves natural gas vulnerable to a technical correction. But any price bounce in natural gas would likely be short lived since weak demand and rising supply expectations also leaves the market without a bullish catalyst right now that would be strong enough to create a solid price floor. With winter heating demand fading, the natural gas market needs to see stronger industrial fuel demand in order to offset signs of higher domestic production being reflected in the steady rise in the US drilling rig count. But a patchy economic recovery suggests industrial fuel use will be slow to recover. Today's reports on consumer price inflation and jobless claims will provide more economic insight, but we suspect the storage report is likely to have more of an impact on market direction. Natural gas remains under pressure from a mild temperature outlook for the rest of the month and concerns that an early start to spring could quickly build natural gas storage back to burdensome levels. In fact, a lack of heating demand last week has most traders expecting to see a 28 bcf decline in storage which would be less than the 42 bcf draw seen last year and significantly below the 5 year average draw of 65 bcf. Unless the demand outlook for natural gas starts to improve, downside price risk will remain in place.
Most markets are showing a bit of corrective action in the early going today and that weakness is thought to be the result of fresh Greece debt concerns. Apparently some Greek officials are concerned that debt payments will be so high, that austerity efforts will be unable to return Greece to a steady fiscal condition and that news serves to send some bulls to the sidelines. However, the equity markets were cheered by the news of muted inflation in the US from the prior trading session, as that could allow the US to stick with a low rate environment for a longer period of time. Apparently the market isn't overly concerned about the lack of forward progress in the US economy, as patently weak data earlier this week was largely discounted. However, the market will be presented with a long list of US data today and given the breadth of the data flows today, one might expect a series of back and forth gyrations on the charts. Given the persistent upward bias on the charts recently, one has to leave the bull camp with the edge, unless the brunt of the data comes out weak and then one might expect a nominal corrective setback on the charts.
DOW:
The June Mini Dow comes into the Thursday morning trade in a slight corrective posture. Up trend channel support in the June Mini Dow is seen all the way down at 10,499 today and that support rises to 10,525 on Friday. Closer-in support in the June Mini Dow is seen at 10,632 and we would expect that level to support prices today, unless there is a definitively weak reading from the scheduled report front. Traders might also begin to watch for the markets reaction to the health care reform end game, as that issue could cause a noted reaction in equity prices.
The rally brought the market to a new contract high. Momentum studies are trending higher but have entered overbought levels. The market's close above the 9-day moving average suggests the short-term trend remains positive. With the close over the 1st swing resistance number, the market is in a moderately positive position. The near-term upside target is at 10760. The market is approaching overbought levels with an RSI over 70. The next area of resistance is around 10724 and 10760, while 1st support hits today at 10634 and below there at 10580.
S&P:
The S&P comes into the early morning action today with some moderate technical damage on the charts. Unfortunately the June S&P doesn't have solid chart support until 1154.80 because of the sharp compacted gains forged at the beginning of the week. We would suggest that the S&P really needs something positive from the early data today just to shift the bias away from the downside. In fact, we would suggest that the S&P needs an ongoing claims decline in excess of 30,000 just to erase fresh concerns off the Greek debt issue.
A new contract high was made on the rally. Studies are showing positive momentum but are now in overbought territory, so some caution is warranted. The close above the 9-day moving average is a positive short-term indicator for trend. The market setup is supportive for early gains with the close over the 1st swing resistance. The near-term upside target is at 1171.87. The 9-day RSI over 70 indicates the market is approaching overbought levels. The next area of resistance is around 1166.75 and 1171.87, while 1st support hits today at 1155.25 and below there at 1148.88.
NASDAQ:
Not surprisingly the June Nasdaq is also starting the Thursday morning trade off in a choppy posture. Critical support in the June Nasdaq today is seen at 1928.50, with up trend channel support not seen until 1906.75. Since the Nasdaq has not seen the typical flow of favorable tech sector news this week, it really needs some help from the US claims data in order to throw off what could be the beginning of a weak 2-3 day corrective setback.
Bonds:
Equities are showing some initial weakness today off reports that Greek officials are doubtful of any aid coming from fellow EU members and that in turn has provided a slight flight to quality lift for US Treasury prices. With the Treasury market basking in the news of muted inflation from the PPI report yesterday, the fear of rates rising in the US is temporarily put on the back shelf and that leaves an upward price bias in place. In looking forward, the market will be faced with another US inflation reading this morning, this time from the consumer level (CPI) but that report has tended to be less volatile than the PPI report. Estimates for the US CPI call for a minimal up tick and unless there is a surprise result, the CPI data should be overshadowed by initial and ongoing claims readings. With Treasury bonds managing another new high for the move overnight and in turn reaching the highest level since December 8th, one could suggest that trade now needs definitively supportive data to 'markedly' add to this week's gains. While some estimates are calling for a minor improvement in the Philly Fed Manufacturing survey this morning, we suspect that data will be of limited importance unless the readings come in well off expectations. All things considered, the bull camp does look to retain a slight edge off Greek uncertainty and also because of the muted US inflation track. Therefore, to take control away from the bull camp, probably requires a big decline in ongoing claims, which in turn prompts the trade to begin to fear the next monthly payroll reading. However, with the Philly Fed, Chicago Fed and Conference Board all scheduled to come out with data this morning in the wake of the US claims data, the trade could be over exposed to 2nd and 3rd tier data and that in turn could reduce the magnitude of price reactions today. We suspect that the net impact of the avalanche of US data this morning, will leave the trade with the opinion that the US economy lacks definitive direction and that should leave the bulls with minimal control. In fact, with the Fed reiterating their intention to leave interest rates low earlier this week, the bull camp will continue to get the benefit of the doubt in the face of non descript data. If there is a surprise number today, it will likely come from either the CPI or ongoing claims and therefore the trade should take the early numbers as the primary indicators of the Thursday trading session. While two Fed members are scheduled to participate in a panel discussion this morning, we doubt that the Fed will change its stance so soon after the most recent FOMC statement release. Close-in support in June bonds is seen at 117-28 and at 117-05 in June Notes. In order to break down below close-in support, probably requires a bigger than expected ongoing claims decline!
US Dollar:
The Dollar is seeing a weak initial bid off renewed Greece debt concerns. However, seeing a rise in Gross UK borrowings and partially upbeat economic views from Japan have served to tamp down global slowing fears and that has served to temper the upward bias in the Dollar. However, it would seem like the Non Dollar currencies and a host of physical commodity markets are coming off a euphoria wave that seemed to be fostered by the US Fed stance, anecdotal global growth talk and because of benign US inflation readings. If the US numbers today rekindle some uncertainty toward the US recovery pace, that could in turn tamp down optimism for 'risk' associated trades (Non Dollar currencies) and that logically leaves the Dollar with a fresh bid. In short, slowing and uncertainty favor the Dollar and in the early Thursday action, the Dollar would seem to be set up for at least a modest short covering bounce. On the other hand, we suspect that the Dollar will be unable to generate much in the way of aggressive upside momentum and that could mean that resistance of 80.50 could be fairly solid.
Gold:
April gold comes into the opening today close to unchanged levels, but still well above the level where the market was earlier this week. Overnight ranges have been small, as many players may be waiting for U.S. economic numbers later this morning. The trade expects some spillover guidance from the currency markets, in the wake of the US data flows this morning. However, seeing renewed Greek debt concerns overnight might leave the Dollar well bid this morning and that has led some gold traders to suggest that something positive is needed from the US numbers this morning or the bear camp in gold might be able to regain a foothold. The gold market is probable seeing some support from World Gold Council statements overnight, which touted 'strong demand' for gold ahead. The WGC also suggested that they expected Central Banks to be players in their strong demand forecast and that is likely to be seen as a fresh bull argument. The WGC didn't leave out many demand sectors in their rosy outlook, as they also hinted at improved jewelry demand. While the gold market hasn't paid that much attention to classic demand side stories lately, the WGC dialogue probably gives the bull camp some fresh confidence into what could be a fairly active trading session ahead.
Silver:
The May silver contract comes into the action this morning mostly sitting on unchanged levels. It is possible that silver is garnering some support from up beat World Gold Council gold demand forecasts, but it is also clear that silver and other physical commodity markets are being put off balance somewhat because of renewed Dollar strength. It goes without saying, that renewed Greek debt concerns have rekindled currency related pressure in silver and with an extremely active US report slate today, traders should be braced for some increased silver price volatility. One might point to another rise in silver exchange stocks overnight as a negative development, but given the breadth of outside market news ahead and the favorable World Gold Council predictions of solid gold demand, it is possible that minimally negative supply side news in silver will be given limited credence today. With the markets seemingly questioning the pace of the US recovery, the heavy flow of US scheduled news today is likely to take on added importance to the silver trade.
Crude Oil:
Crude oil has seen a lower trade overnight with the market giving back a good portion of the previous day's gains on profit taking tied to a stronger Dollar, macro economic doubts and concerns that china will take further steps to tighten monetary conditions that could undermine the global recovery in oil demand. The price direction in crude oil has been closely tied to the ebb and flow in the dollar and most of the selling in crude oil this morning looks to be currency connected. Oil markets have fallen back as the Dollar gained upside traction on fresh concerns that Greece will have difficulty securing an aid package from the European Union. Safe haven demand for the dollar jumped as it still appears that European leaders are in disagreement on whether to provide funding to Greece and investors have scaled back risk at crude oil's expense. As long as the Greece situation remains unresolved, doubts about the pace of the global economic recovery could undercut optimism for a recovery in oil demand. In fact, it looks as if oil demand confidence has also been undermined by reports that the government has instructed banks in China to stop lending to property developers which further raises concerns that tightening liquidity conditions in China could slow the global recovery in oil demand. Oil market sentiment may have also been dented by reports that a major Russian oil company is continuing to supply oil despite an ongoing legal battle that threatened to prevent oil exports to Western countries. Profit taking in crude oil may have also been inspired by the EIA reporting crude oil stocks rose for the seventh straight week and May crude oil stalling out near the upper end of the market's recent price range. With speculators already holding near a record net long position in this market, we suspect a stronger optimistic view toward a recovery in oil demand will need to take hold and perhaps more importantly a weaker move in the Dollar in order to raises investor risk appetite and provide a fresh incentive to buy crude oil up at these high levels. Today's reports on consumer inflation and jobless claims will provide fresh economic insight. Since oil prices are being so strongly influenced by the direction in the dollar, oil markets will need the economic or political news flow to undermine the strength in the dollar in order to avoid additional profit taking and reverse the oil market's course to the upside. Despite the price weakness overnight, oil markets have generally had an upward price bias as profit taking breaks have so far lacked any follow through while lower oil price have continued to attract fresh buyers. If the currency connected pressure subsides, we suspect bullish confidence in the oil markets could quickly return since yesterday's EIA report showing a decline in gasoline stocks, total product demand up 3.5% and refinery operations edging lower certainly improves the market's fundamental setup. But oil market direction continues to hinge on the Dollar. If yesterday's low fails to hold in crude oil, look for more aggressive chart based selling that could pressure May crude oil back towards $81.16. On the other hand, don't be surprise to see May crude oil reverse course to the upside if the Dollar starts to back peddle.
Natural Gas:
May natural gas has edged lower overnight as the market continues on its stair step decline towards a test of the $4.00 price level. The market's extreme oversold condition leaves natural gas vulnerable to a technical correction. But any price bounce in natural gas would likely be short lived since weak demand and rising supply expectations also leaves the market without a bullish catalyst right now that would be strong enough to create a solid price floor. With winter heating demand fading, the natural gas market needs to see stronger industrial fuel demand in order to offset signs of higher domestic production being reflected in the steady rise in the US drilling rig count. But a patchy economic recovery suggests industrial fuel use will be slow to recover. Today's reports on consumer price inflation and jobless claims will provide more economic insight, but we suspect the storage report is likely to have more of an impact on market direction. Natural gas remains under pressure from a mild temperature outlook for the rest of the month and concerns that an early start to spring could quickly build natural gas storage back to burdensome levels. In fact, a lack of heating demand last week has most traders expecting to see a 28 bcf decline in storage which would be less than the 42 bcf draw seen last year and significantly below the 5 year average draw of 65 bcf. Unless the demand outlook for natural gas starts to improve, downside price risk will remain in place.
Rut Tracker Up to Date
Ok, the tracker is all up to date. It has been a tough start to the system. We have had to make two adjustments within the first month of launch. This is outside what is to be expected, but will happen when the market makes a strong move in one direction. We will start chipping away at those losses when the market gets back to a regular up and down flow. This is a neutral system that works best with some push and pull. So when the market trends with no pull back all we can do is play defense till the get a chance. Hang in there and we'll start getting those nickle buy back soon.
Rut Roll Update
Just bought the Apr 710/720 call spread back for 1.95 Debit.
Sold 2 Apr 730/740 @ 0.50 Credit
Sold IWM Apr 67/68 call spread @ 0.62 Credit
I will have the tracker will all orders updated soon.
Sold 2 Apr 730/740 @ 0.50 Credit
Sold IWM Apr 67/68 call spread @ 0.62 Credit
I will have the tracker will all orders updated soon.
Rut Open Update
As we get closer to the open the futures are looking weaker so I am going to wait and see how we open. If we begin to sell off I will hold off on the roll. We are right at the point were if we go higher we need the roll but if we back off we don't. I'd like to get through ex tomorrow without rolling to bank that weekend theta. So we will hold for the first 30mins to 1 hour and see how the day looks moving forward.
Rut Roll
Good morning, we will be rolling our Apr 710/720 call spread up this morning to the 730/740 layer. I will let you know the prices I get. We will also place a limit order to sell our IWM debit spread for 0.70 which is half the max profit. IF the RUT continues to move higher we will open a new debit spread to hedge off additional risk.
Subscribe to:
Posts (Atom)
Posts
