Fast Break for Traders: The Week Ahead

Week of June 2, 2008

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5 Hot Picks by Sterling Smith of FuturesOne

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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S&P 500

The market looks very tired and heavy to me here, and the very sluggish trade on Friday around the 1400 level is very troubling, as is today's early action.

Japanese Yen

The Yen looks like it making a fairly substantial bottom, and trouble in the indices can lend some strength here.

Sugar

Sugar looks like it may have finally sunk to a level where either some short covering/new buying may begin to set in, but expect any climb here to be slow and laborious.

Crude Oil

While the media keeps talking about the big bull market coming to end, I see things differently and I think further upside here is more likely than not.

Gold

If we can see gold basis August hold the 900 mark I think we can see surprising upside in here, especially if the US Dollar begins weaken.

5 Hot Picks by Matt Johnson of Target Futures

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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September Euro Currency

I am cautiously optimistic that the US Dollar will find some legs against the Euro. In the July options, I would buy an ECN8 152/149 put spread for approximately 50 ticks ($625) with a 6:1 risk reward ratio. Those willing to take some additional upward risk, you can sell an ECN8 158 call to offset the cost of the put spread.

August Crude

The bears have been biding their time and are starting to smell blood in the water. In the August options, I would buy a CLQ8 115/110 put spread for approximately 120 ticks ($1200). This trade itself is 4:1, but if you can take some upward risk, sell a CLQ8 150 call for approximately the same amount to completely pay for the trade.

September US Treasury 30-Year Bond

The bond market has been beaten up badly the past few weeks, and I'm looking for a nice recovery. We can keep this one simple and buy a USN8 116 Call for approximately 26 ticks ($406).

July Beans

Trade in the July beans has been extremely congested lately, and I'm looking at this last rally as a selling opportunity. I would buy an SN8 1320/1270 put spread for approximately 15 cents ($750) and sell an SN8 1500 call for approximately 12 cents to help pay for the trade.

June Live Cattle

June Live Cattle options expire at the end of the week. The market is starting to look real toppy to me, and it offers a pretty inexpensive way to take a shot at the short side. I'd buy an LCM8 95 put for approximately 50 points ($200).

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