 | | 5 Hot Picks by John Garrity of Manduca Trading |
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Since his arrival in Futures and Options in 1995, John Garrity has served as an equity raiser, currency analyst, and has trained hundreds of clients in the art of trading. Mr. Garrity provides all of his clients with a fundamental and technical analysis on various markets by writing a daily Garrity Report that is e-mailed twice each trading day. Mr. Garrity comes from a family with over 30 years of experience in the agricultural markets. His Father trades at the Chicago Mercantile Exchange in the Meats. |
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We are running out of Wheat! Corn was the market of 2006. Wheat is the market of 2007. Look at Corn now compared to the exuberance of 2006. What goes up eventually comes down. Picking tops and bottoms in Commodities nowadays is suicide. There seems to be more volatility than there used to be. I have a trade idea and it is a low cost trade, depending on your commissions and fees! December Wheat is at 950. Sell the December Wheat 940/960 call spread for $450 credit and buy the December Wheat 800/put also for $450 debit. It sounds too good to be true. There is a catch. There is a limited risk of $1000 per strategy. If December Wheat at option expiration expires above 960 you will lose $1000
per strategy. Your potential on this trade is unlimited. Let's say December Wheat retreats 50% of what it has rallied this year, that would be about 720. This would be a profit of about $4000 per strategy. This strategy is like picking a top. Although Wheat could go up to 1102 in a few weeks and be trading around 720 at Thanksgiving. The good thing about this strategy is you could weather the storm, because you know your risk is limited to $1000 no matter how high Wheat goes. |
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The December Eurocurrency is incredibly too high and due for a correction. Again this is picking a top! Why do I continue to do this, maybe I'm an annalist. How about buying the December Eurocurrency(ECZ7) 138/136 put spread for $225 with potential of $2500. A pretty good Risk vs. Reward. I believe this market is a little overextended and due for a pull back. There are a few gaps to fill on the downside. Last year at this time the Euro had a swift break going into October. Over the years, I have noticed the Eurocurrecy strongest around Xmas. I think it will have a good break now, before rallying to new highs around Xmas. If the ECZ7 settles below 13600 at expiration you will make $2500 -
$250 = $2250 per spread, not including commission and fee's. |
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Let's go with the trend this time. How about buying the December Corn(CZ7) and selling May8 Corn(CK8) around 26 1/2 premium to CK8. I am going to risk about $200 per spread or 30 1/2 cents premium to CK8. I believe this spread could tighten to around 10 cents premium to CK8 or a profit of about $825. It looks like Corn could be turning and heading higher. |
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This has been a bull market all year. We have had a nice break, so I believe this could be a good dip to buy. November Dairy(DAX7) is around 1716. This market is thin, so you don't want to play without protection. Place a stop loss at 1649. Your risk is about $1340 per contract. My objective is around 2015 or a profit of about $6000 per contract. There is a seasonal buy on Dairy this time of year. My brother Tim, who fills some of the Option paper in the Pit, is long. I hope he's right! |
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Sugar looks like it is finally turning! I would like to enter a Bull Spread in Sugar. I would like to buy March Sugar(SBH8) and sell July Sugar(SBN8) around 5 premium to SBH8. I anticipate this spread to widen. My objective is for SBH8 prices to be at least 100 points over July Sugar by expiration or a profit of $1000+. I would risk about $335 per spread or 25 premium to SBN8. There is a Seasonal buy from now until the beginning of the year. If you want to buy a Call Option, the January Sugar 1050/call for only $250. This Option has plenty of time and is relatively close to the $.
* References to seasonal tendencies are solely for informational purposes and should not be deemed as the sole reason for putting on a trade, as there are numerous factors that can negatively influence profitability even if the seasonal tendency occurs in the future. Not all accounts enter and exit trades at the same levels, therefore the reported profits or losses are an approximate average of all trades taken and are not adjusted for commissions or fees. |
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| | 5 Hot Picks by Lee Gaus of EFG Group |
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 Lee Gaus has thirty years of experience in the commodities industry. In 1992, Lee established EFG Group along with his two partners who are long-time friends. Since then, Lee has traveled the U.S. conducting seminars and trading meetings for retail traders and commodity offices. |
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The seasonal rains have yet to appear in the Brazilian coffee areas. Until these rains appear, coffee prices will have a bias to move higher. |
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The acreage expansion in Brazil is such that sugar prices will have a tough time rallying until that crop is threatened. |
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It appears there is a considerable amount of global money looking for a home. Relatively low U.S. interest rate vehicles make the U.S. Stock market look attractive. |
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It appears the corn crop is increasing in size beyond earlier expectations. Until this glut of corn is harvested and stored, U.S. corn prices will have a tough time sustaining a rally in the short term. |
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What appears to be an ever tightening World Supply Demand continues to push prices higher, as the world appetite for wheat is not backing off. Until we can show that we will have enough wheat to meet the demand, prices will maintain their bias to move higher. Price has to perform its function of rationing existing short supplies. |
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