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| 5 Hot Picks by Matt Johnson of Target Futures |
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 In the futures industry since 1996, Matt Johnson got his start working with retail clients. In 2000 he established Cytrade Financial, L.L.C., and independent introducing broker registered with the CFTC and NFA member. Matt manages the firm and offers his brokers and clients trading suggestions primarily using futures options. For more information on Matt's trading, please visit www.targetfutures.com. | |
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| Not much has changed since my last recommendation of short ECH8 back in mid January. Despite two large Fed rate cuts, the dollar has managed to hang in there. I'm still looking for a strong dollar rally in the near future. I like buying an ECH8 147/145 put spread for approximately $750. Those willing to take some upward risk can sell a 151 call to make the net cost of the trade almost zero. |
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| The bulls seem to be in hiding for the moment, but you can never count them out. Use this nice break of $90 as a buying opportunity. I like a CLH8 91/94 call spread for approximately $650 with an almost 5:1 risk reward ratio. Puts are also starting to get on the expensive side (perhaps a sign of further downward movement). Selling an 84 put would bring in approximately $400 to help pay for this spread. |
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Beans in the teens! But will they continue? Look for beans to run out of gas in the $13.00-13.20 area, and use this opportunity to establish short positions. March options with about 3 weeks to go until expiration offer some excellent opportunities for lower premiums. SH8 1260 puts should open for around 15 cents today ($750). On any kind of 20-30 cent break, sell a lower strike put for approximately the same amount to lock in the "free trade." |
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I like to be optimistic for US equities, but I fear that the post Fed recovery has been too far, too quickly, and we will again take a look at the low 1300's in the near future. Trading the short side, you must be very quick to take profits, but I believe there will be more opportunities for the bears. With only two weeks to go until expiration, February options are very tempting. Poor option writers have a terrible time with this extreme market volatility, but it's an opportunity for option buyers. ESG8 1360 puts are trading at approximately $650 currently. Keep this trade simple, but again, take profits quickly on a sharp break or sell a lower strike to lock in
profits. |
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| Hog market has been on a sharp rally over the past week or so, and I think it’s due for a bit of a pull back. April Lean Hog Options have over 70 days to go until expiration, so plenty of time for the trade to develop. LHJ8 60 Put for approximately $300 looks like a real deal. |
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| 5 Hot Picks by Sterling Smith of FuturesOne |
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| 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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| Coffee looks to be heading towards a perfect storm for a rally.. an improving technical picture, improving fundamentals and being "cheap" relative to other commodities. I am looking for some upside fireworks this week. |
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| It too appears to be improving steadily and I am looking for the upside there to continue there as well. |
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| Bonds/notes/Eurodollars are very over bought, and stable to firmer action in the stock market should help these work lower.
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| May cotton, if it can avoid falling though support, looks ready to start working higher. |
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| The Giants upsetting New England gives some rise to the old Super Bowl theory says we should see a firmer stock market. I am looking for the market to be stable to higher this week. |
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