 | | 5 Hot Picks by Matthew Bradbard of MB Wealth |
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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.
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With more expected bad news in the housing market and further credit troubles in coming weeks, we are advising a short in the British pound. We suggest getting short as the pound approaches 2.0000. This strategy has worked in recent weeks and believe will continue to work moving forward. Buy the 1.95 June puts for approximately $750 looking for a double on a move in the futures back to last week's lows and potentially beyond. We like the 1.95 strike because that's where the open interest is; you have 46 days before expiration, out of the gate starting with a 29% delta. |
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We like being long corn for clients, but have little reservation being that prices are at record levels. That being said, we suggest for less aggressive traders to be long new crop 'December' and short old crop 'July'. Last week the trading range was 6-11 cents on the spread, you should look for an entry this week anywhere from 7-9 cents. This trade should be good for approximately 15 cents as we look for the spread to widen in coming weeks. On improved weather that allows farmers into the fields, or fund selling if corn does stage a pullback, we would advise covering the short July position and holding the December long looking to potentially make money on both
legs. On exiting one leg on a pullback, December should be well supported around the $5.85 level. |
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Look for an entry to get long July soy meal between 340 and 345 with a stop at 332. If you prefer to trade without stops but want to implement some form of risk management, one could sell the 400 July calls for $1000. With this approach you have approximately 2 months of protection, unfortunately you have a 28% delta working against you on the way up, but you have collected $1000 on a move against you. We expect to see prices run higher and fill the gap from 3/6 at 372 and make their way back to the March highs. |
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We are recommending that dips be bought in October sugar. Although the daily chart looks over bought, the weekly chart looks good, and the fact that the last 3 weeks we have seen higher highs and higher lows we would recommend being long. The historical seasonal pattern from April into July is a strong uptrend and we anticipate that to be the case in 08'. For less risk adverse traders that may not want to be only net long futures, you could sell the 1400 call and use that premium to buy the 1400 put for October. This would cost just over $100 in premium. This would allow you to weather any volatile movement and have some downside protection if sugar prices were
to move south. The quandary though with that protection, is on a move to the upside you have limited your profit potential. |
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If you have heard the saying 'buy the rumor sell the fact' that is how we would recommend approaching June live cattle. We believe that the recent advance in cattle prices were in anticipation of S. Korea buying US beef again and now that they have re-opened their borders we expect prices to back off. Remember that demand is only one side of the equation and with cattle producers loosing on average $200-250 per head, in upcoming weeks we're expecting for more supply to come on the market as producers cannot continue to loose money. Sell cattle looking for gaps at 91.75 and 90.15 to be filled in upcoming weeks. Initially we are looking for a pullback in prices to
the consolidation level around 90.50 we saw in late march. As we garner some momentum we are looking for an eventual test of 87-88 and ultimately new lows. As opposed to putting in a stop and running the risk of getting jigged out of the trade, traders could sell the 92 put for approximately $900. If the market confirms a top and starts to move lower, we would advise buying back the put at a loss. The last time the Williams % R was at these levels in late February, cattle prices were at 96; 30 days later they were 9 cents lower at 87 at $400 per penny.
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
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| | 5 Hot Picks by Arc Capital Management |
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 Arc Capital Management is an independent brokerage and consulting firm offering firms both hedging and speculative services in futures, OTC and the foreign exchange markets. Arc associates combine for over 50 years of experience providing professionals in financial, agricultural and energy markets with traditional services as well as cutting edge electronic execution, customized research packages and full service professionals. |
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Florida trees have just started to show signs of fruit thanks to the recent rains and we could see some warmer than normal temperatures. Of course when there's no news someone has to bring up the citrus greening threat which has not happened and there are no current signs of this disease issue. None the less, low volume and the citrus greening talk have given a modest pop to the market but fundamentals have not changed and remain weak. We have seen good selling volume around 122.50 in July and expect that to continue this week with the next resistance level around 128.00. Without a change in fundamentals we expect to see producers selling into rallies this week. -
Petillo |
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With more and more media coverage of commodities, even the general public has had time to learn that BIG SIGNIFICANT, HIGH VOLUME DIPS are the time to buy. This, in addition to the tremendous amount of new hedge funds waiting for an opportunity to enter markets and the lack of confidence in our Stock Markets -- put more and more dollars below and behind our commodities. Early Friday was a perfect example -- weak spec liquidation met with big dollars below on heavier than normal volumes. We expect buyers at every pullback in crude and the sector this week. - Hazelcorn |
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Although Argentinean producers continues to battle with the government regarding beef exports and grain issues, the Argentinean government has tentatively agreed to extend beef exports and progress is being made in negotiations. With corn finding a comfort level around $6.00+ a bushel and volatility decreasing in grains and June live cattle futures running into technical resistance around 9300 and 9525 we could see traders selling into any rally this week. - Petillo |
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The lack of bullish news and the looming reality that we have an extremely large global wheat crop in the ground are contributing to the downward trend. Expectations for the week to come are varied. We are in a critical time in the wheat market weather wise in that there are crop damage reports coming in due to record rainfall in the Midwest and below average temperatures predicted for the next 10-12 days. The actual effect of these conditions remains to be seen. If we do experience above average rainfall and get a period of frost bearing temperatures, the wheat crop could be damaged extensively, similar to the situation we had last year. It could bring some longs
back in to the market as supply issues will be drifting back in to horizon. If the lack of bullish or supportive news remains we could easily see more of the speculative longs come out of the wheat market. Some things to keep in mind as we progress into the crop year are not only weather and supply and demand issues but also what is going on in the currency markets. If the dollar continues to make record lows in the weeks to come as it has this week there could be more interest generated for commodity markets bringing more money into the markets even if fundamentals may not be there to support it. This would continue to paint the extreme volatility picture we have been seeing but could
provide some opportunities for those with a watchful eye. - Anderson |
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December corn has almost reached the $6.40 range that I have been talking about since December of '07. That being said the way that I will look at this market is through calendar spreads. This week I like Dec '09 over Dec '08. The spread has been as high as .50c '08 over '09 when I looked at it last month and today I see it as 30c. There is a great chance that our ending stocks to yearly usage will be below 10% and this time next year closer to 4%. Add this to the cost of planting corn as high as it is; $150 to $175 an acre for fertilizer alone as of today makes for a bullish scenario. What price will it take for a farmer to grow Corn next year? $7.00 to $8.00 is my
feeling. We are still paying over $3.75 a gallon of gas here in Chicago and you get about 2.8 gallons of ethanol per bushel of corn. Right now we 10% of the gas is ethanol and that may be climbing. $3.75 x 2.8 = $10.50 per bushel value to an ethanol guy before the $.50 kick back from the government for mixing it in. Is $10.00 CORN around the corner? Look at Dec '09 under Dec '10 at only .10c premium now moving up to as much as .50c. - Sweeney |
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