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| 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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I like the looks of a Bull spread in Crude Oil. Buying the June Crude Oil 100/110 Call Spread for $1200 with gross potential of $10K. You could also sell the 70/120 Strangle for a credit of about a $1000, bring the cost down to only $200. If CLM8 settles between 110/120 you will make about $10K. Keep in mind if you sell the 70/put and the 120/call you are naked on each and have unlimited risk on each. It might not be a bad idea to put stop losses on each just in case Crude Oil has a $20 move either way. |
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This is probably the most oversold Commodity out there right now. Just about every other Commodity has made an upward move over the last few years. This would be bucking the trend. Buy the March Lumber, currently around 222.00 and buy the March Lumber 220/put for about $800. Your risk is about $1000 per contract. Your potential is unlimited. |
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I like the looks of a Bull Spread. Buy March Corn (CH8) and sell December Corn (CZ8), currently around 11 cents premium to CZ8. I see support around 22 cents premium to December, so I would risk about $600 per spread. We are going with the trend on this spread. I see resistance around 9 cents premium to CZ8. If this is taken out I believe March Corn prices should go over December prices. If we see the farmers planting more Corn this year, due to the high price they can receive, they could flood the market with Corn and that should pressure New Crop or the December contract. I wouldn't be surprised to see this spread widen to 50 cents premium to CH8 if this happens. This would be a profit
of about 3K per spread. |
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It might be a little early to talk about Hurricane season, but if it should hit I want to be on board. Orange Juice prices have dropped about 50% since last year at this time. I want to be long in Orange Juice coming into the Hurricane season. The November Options should give us enough time. Sell the November OJ 140/130 Put spread for a credit of $600. Use that credit to buy the November OJ 160/call for $900 debit. Your cost would be about $300 per strategy. Your risk would be about $1500 per strategy. If November OJ settles below 130.00 at the end of October you will lose about $1500. Your potential on this strategy is unlimited with the 160/call. Let's say OJ heads back to 200.00, you
would gross about $6K per strategy. |
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I don't believe these prices. I remember Bean Oil trading around 1600 a few years ago! This trade is bucking the trend. Sell the December Bean Oil 54/60 call spread for a credit of about $1200 or 200 points. Use that credit and buy the December Bean Oil 48/put for $1200. This trade would require $0 in Premium. You have risk of 600 points or $3600, the difference between the 54 and 60 Calls. Your potential is unlimited. Let's say Bean Oil has a 50% retracement from the low's of about 1600, this would be about 3500. If this happened your 48/put would go into the money by 1300 points for about $7800 in gross profit. |
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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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I continue to look for dips in the grains and oilseeds to buy, but given a choice I suggest one consider a long position in soybeans. If we get a chance again around the $12.05 level in the March I think it deserves some consideration. My models suggest that it will take a close on Thursday below 11.66 to turn the short-term model lower, and a close below 10.66 on Friday to reverse the longer-term model. |
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I think March Cotton also deserves consideration from the long side of the market. I suggest one consider buying March Cotton during the early part of the week at 6892 stop. This recommendation will be voided if March Cotton closes below 6683. My models suggest that it will take a close on Thursday below 6491 to turn the short-term model lower, and a close below 6554 on Friday to reverse the longer-term model. |
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I want to take a look at selling the March Aussie Dollar around the 8800 level. My models suggest a close above 8966 on Friday to reverse the longer-term model. |
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I want to take a look at buying the March Swissy around the 9080 level. My models suggest that it will take a close on Thursday below 8812 to turn the short-term model lower, and a close below 8681 on Friday to reverse the longer-term model. |
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I suggest one take a hard look at March Bonds from the long side around last weeks low. My models suggest that it will take a close on Thursday below 114.16 to turn the short-term model lower, and a close below 94.25 on Friday to reverse the longer-term model.
There is risk in trading futures and options. Use of contingent orders such as "stop loss" or "stop limit" orders which are intended to limit losses to certain amounts may not be effective because market conditions may make it impossible to execute such orders. |
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