 |
| 5 Hot Picks by Drew Klein of Greenrush Capital |
|
|
 Drew Klein is Principal of Greenrush Capital Management LLC, an introducing brokerage outside of Los Angeles, California. Drew has been a member of the National Futures Association in good standing since 2001 and has worked for some of the largest options firms on the West Coast. Greenrush specializes in managed accounts, full-service retail brokerage, and self-directed trading for the more sophisticated client. Drew is the editor of Greenrush Capital Research, which is available on a subscription basis but is
complimentary to all clients trading with Greenrush Capital. | |
|
|
|
|
|
| Stocks headed into the weekend with significant losses and major technical chart damage. Monday should be a critical day for global equities in determining our direction over the short-term. We look for the S&P and the Dow to take out the January lows at some point over the next 6 weeks. Look for profit-taking to spill into all commodity markets if the equities move down sharply over the next few weeks. |
|
|
|
|
|
The short end of the curve still looks very strong while we continue to favor fading the long bond. Clients are strongly suggested to maintain length in December 2008 Eurodollars as well as looking for June T-Bond resistance at the 119-08 level. If it blows through there, we could see a retest of the 120-25 area, just below January highs. We prefer using 10 year / 30 year spreads to ride the bond bear over the longer-term. Be aware that a new tick system is now being used in the 30-year bond and the 5-year note. |
|
|
|
|
| Over-extension in the commodities markets may be an illusion -there exists no technical barrier for either gold or platinum. Silver and Palladium remain well below their respective record high nominal prices. Rest assured, the markets can and will correct. As they have in the past, corrections will probably be vicious and short-lived. Use these limited opportunities as a way to continue to increase exposure to the metals sector.
|
|
|
|
|
|
Fundamental reality and technical overextension may become evident in the energy markets over the very short run. Further violence in the Middle East combined with Papa Chavez beating his war drum in Venezuela can spike this market at any time. If crude can close above 103.50, basis the April contract, we could pop to the mid-108 area. Not that we can't be long both, we think precious metals will outperform the energy sector in 2008. |
|
|
|
|
Planting season begins March 1st, and seasonally this is the time to look for weakness, specifically in corn and wheat. The trend remains your friend, except at the end, and it would be a little nutty to call a top here. At the same time, we are looking for some stability to come back into the Dec Corn / Dec Wheat spread, and a prospective bull spread trade opportunity in old crop-new crop soybeans.
DISCLAIMER - THE RISK OF LOSS IN TRADING COMMODITIES CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. PAST PEFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.FUTURES & FUTURES OPTIONS TRADING IS COMPLEX AND CAN EXPOSE YOU TO UNLIMITED RISK. NONE OF THE TRADES DISCUSSED TAKE INTO ACCOUNT FEES, COMMISSIONS, OR SLIPPAGE, ALL OF WHICH CAN NEGATIVELY IMPACT YOUR TRADING RESULTS. ALL TRADE CONSIDERATIONS LISTED BELOW ARE MERELY IDEAS THAT ARE SUBJECT TO CHANGE BASED ON MARKET FACTORS. CONSIDERATIONS MAY HAVE NOT YET BEEN AND MAY NEVER BE EXECUTED BY GREENRUSH CAPITAL MANAGEMENT, LLC. 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. INFORMATION PROVIDED IS COMPILED BY SOURCES BELIEVED TO BE RELIABLE. GREENRUSH CAPITAL OR ITS PRINCIPALS ASSUME NO RESPONSIBILITY FOR ANY ERRORS OR OMISSIONS AS THE INFORMATION MAY NOT BE COMPLETE OR EVENTS MAY HAVE BEEN CANCELLED OR RESCHEDULED. ANY COPY, REPRINT, BROADCAST OR DISTRIBUTION OF THIS REPORT OF ANY KIND IS PROHIBITED WITHOUT THE EXPRESS WRITTEN CONSENT OF GREENRUSH CAPITAL MANAGEMENT, LLC. | |
|
|
|
|
|
| 5 Hot Picks by Matthew Bradbard of MB Wealth |
|
|
Matthew Bradbard is from New England and studied Finance at Northeastern University & the University of Sydney. He has been a member of the NFA since 2000. Matthew Bradbard founded and remains President of MB Wealth Corporation. Subsequent to establishing MB Wealth, he worked at various brokerages over his tenure in commodities. Matthew Bradbard has helped identify and develop several trading strategies in numerous commodities markets for his clientele. He has always been a hands-on broker with proficiency in fundamental as well as technical analysis. Over the years he has cultivated relationships with floor traders, farmers, grain marketers, and end users.
| |
|
|
|
|
|
| I believe the saying goes "the trend is your friend." Overnight July Soy meal hit a new contract high, advancing approximately $50 off the lows back in late January which represents a 16% move in just over 30 days. We are recommending scaling into longs anticipating that this run higher still has legs. Use a stop below 370 and look for 400 to be penetrated in the not too distant future. |
|
|
|
|
|
We are trying to catch a falling knife in April Lean hogs and may be a bit early but getting long with a call option seems worthy of a trade. Both RSI and stochastics show an oversold market and when it turns we feel it will move higher like a sling shot. We expect the gap formed from last Monday's open to be filled on a move higher in coming days to weeks. Additionally all of the fund money that is finding its way into commodities has yet to move into livestock and when it does you better be long or you will be wrong. Buy the 61 calls; Friday's settlement was 155 points ($620) plus commissions and fees. Look for this to go intrinsic when the gap is filled and be
trading roughly at 300 points ($1200). |
|
|
|
|
|
Although this contradicts "playing the trend" sometimes it pays to be a contrarian. This is essentially a $300 lottery ticket that will most likely expire worthless, but feel it's worth the risk. Look to buy the 150 March Euro put that expires this Friday, one day after the ECB meeting. We are under the impression that the latest appreciation in the Euro and the rout in the dollar is a bit over extended. Look to pay approximately 25 points in premium ($300) for an option that has a 20% delta. Once filled, place an order to liquidate at 72 points ($900), which would be a 3:1 return on your money before commissions and fees. You would need to see a volatile move to
about 149 to get filled on the profit objective. |
|
|
|
|
|
We want to be long cotton as we see this as one of the best trades in commodities
currently. The problem is buying right now is tough as prices have advanced 12
cents in the last 2 weeks. A 12 cent move represents $6,000 per contract so this
is significant. As opposed to just closing your eyes and buying we would recommend
getting long December 08 while simultaneously selling May 08. The current spread
is about 5 1/2 cents to the December and we could easily see this get to an 8-10
cent premium. Charting the spread you are very close to getting buy signals from
stochastics and MACD. Why we like this is, if prices were to move lower in the
short term one could lift the May short book a profit and hold onto the December
contract once they felt the pullback had run its course. We ultimately feel that
with the lack of acreage and potential drought conditions to come December cotton
could trade above $1.00. |
|
|
|
|
By no means are we bearish gold but we are anticipating a healthy correction. Not only is gold overbought, the media is touting how great gold is which generally helps markets find a temporary top. Furthermore if selling in the stock market persists, investors may need to sell their gold to cover margins in equities; which has been a common theme in recent stock market sell-offs. The ensuing correction should not be viewed as the top in gold but it would only encourage us to get long looking for much higher prices as we feel inflation is going to become a more serious threat in coming months. Buy the April 950 put; Friday's settlement was $1610 you should be able to get it done
for $1350/1450 assuming the market is not too crazy. To make it less expensive but also compounding the risk you could sell an April 1050 call for roughly $800 which would mean the trade would cost roughly $700 and you would have 23 days to see gold pullback. We are looking for a violent move of $50, some odd dollars when in fact it happens. The question is, will we see $1000 before this correction occurs?
Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Before trading MB Wealth recommends that you should carefully consider your financial position to determine if commodity trading is appropriate for you. All funds committed should be purely risk capital. Past performance is no assurance of future trading results. There are no assurances of market outcome stated, everything stated above are our opinions. Calculations of profit and loss have not factored in commissions and fees. | |
|
|
