Fast Break: The Week Ahead

Week of September 24, 2007

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5 Hot Picks by Michael Levin of Platinum Trading
Michael Levin is a Consultant to Platinum Trading Solutions. He has been in the Financial markets since 1981, having been a broker and trader on the PHLX Equity Options floor in the 1980's and ran trading firms in New York in the 1990's to 2002. Mike briefly set a record in the options trading division of the US trading Championships years ago.

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Ok, getting right down to business, there are a few very good trading ideas this week:

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Energies

Ok, so I missed the crude oil rally (very impressive I must say) but I did tell you to go long Dec Nat Gas and target the $8 are from the $7.50-$7.60 area. There was some trepidation as it bounced off of $7.20 and it did rally to where I said it would, but I wouldn't give myself anything more than a B- for the trade. I would buy pullbacks on Dec Nat Gas to the $7.65 area and then like to see a run to $8.40-ish.

As for Crude oil, I have to say that I am stymied as to what to do next and will stay on the sidelines for now.

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Metals

Missed a huge rally in the metals by being too cautious and assuming the dollar would hold and therefore missed a superb rally, but at least I didn't say to go short. I am assuming there is more upside here, but again without a clear-cut "feel" for the trade I am staying on the sidelines on Gold but wouldn't mind a small short position on Dec Silver here at $13.65 with a target to bounce off of $13

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Grains

Ok, here we go, Short Dec Wheat (cbot) $8.75+ and cover if it prints $8.95. I am looking for a break below $8.30 and then a test of the $7.60 area next if we're lucky. I see too much money on the table for those who rode this move up not to take profits here.

Soybeans have had a tremendous run from the bottom of (Jan-08) $8.20 to $10 and unlike wheat, I am not the one to come in and say that the rally is done til it cracks. I am on the sidelines.

Corn has been the "red-headed stepchild" of the grain complex and I think many have been washed out and have gone on to play in other grain fields. Last weeks vault up however, may get more attention for corn and if it holds here, may provide another shot at the $4 level in the Dec month.

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Livestock

This may seem a little wild, but I wouldn't be surprised to see Live Cattle break out and run to $110 within the next month for the Dec contract. Could be a triple top breakout of biblical proportions. Heck, if wheat can rip up and soybeans and if they're using so much corn for ethanol, what's left to feed the cattle? Oh yeah, cement dust and water to fatten them up. Take em' higher!

Hogs: What an opposite move for the hogs vs. cattle. Buy the dip here anyway at $63.30 and ride those piggies back up to at least the $68 area for a quick piece of bacon.

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Indexes

I expect a lot of end of quarter window dressing this week for all of the major averages. Stay on the sidelines as volatility may tempt you to take a side, I say stay away unless you want to adhere to the old adage: Buy on Rosh Hashanah and sell on Yom Kippur. Yom Kippur passed Saturday and I'd short any rally here if I did trade.

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5 Hot Picks by Sterling Smith of FuturesOne
Sterling Smith is developer and publisher of the FuturesOne Power Index, and a 15-year market veteran. Registered as a CTA he is a noted Coffee, Sugar and Cocoa analyst. Sterling works with clients of all sizes to help improve their trading.

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Gold (Dec)

Gold has done an impressive job of holding above 700, and moreover, a key area around 710, and given the continued weakness in the US Dollar Index , I do expect this run to continue through this week.

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Cotton (Dec)

Cotton is the forgotten grain and looks like a deal compared to the rest of the grains. I am looking for to test and take out the contract highs up around 69.00. I am further looking for prices to climb well beyond that as higher prices in the other grains will feed fears of fewer acres down the road.

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Cattle (Oct or Dec)

Cattle is coming off of a pretty solid setback and looks like it is going to turn higher and I am looking at old contract highs as targets, and for it to move beyond them as well.

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Sugar (all months)

Sugar looks like it is finally moving out of its ongoing funk and may finally start to move on to higher prices.

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Orange Juice (Nov)

Orange Juice has been weak all year and I am looking for that weakness to return rather sharply this week, as it as become alarmingly overbought and is coming into heavy chart resistance around 130.00.

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Disclaimer: The Commodity Futures Trading Commission has asked us to also advise you that trading futures is not without risk. While there is opportunity for incredible wealth building, there is also the risk of losing even more than you invested. Of course, that's not unlike most other businesses. But informed traders are the best traders! Opinions expressed by Fast Break authors are not those of FutureSource.