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| 5 Hot Picks by Phil Flynn of Alaron | |
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| Phil is Vice President, Energy and General Market Analyst with Alaron Futures and Options and is one of the world's leading energy market analysts. His market commentary, fundamental and technical analysis, and long-term forecasts are sought by industry executives, investors and media worldwide. |
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It is a star spangled spectacular in commodities this week ahead of the Forth of July Weekend. As the US stock market is on its way to having the worst June since the great depression, oil seems to be a proxy for all that is wrong with the world economy. There seems to be a sense that no matter how high oil goes it won't matter on the demand side in places like China and India. It does not matter if it is true or not. Now that Oil has closed over $140 a barrel it seems to be signaling a long-term move to $148. | |
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| Natural gas has been hot but with the temperatures cooling off so too might the natural gas. Still, with oil flying it may find strength. Look to sell August gas at 1360 look for a break to 1280, if it hits 1280 first go long there with a stop at 1220. | |
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A $4.00 print in heating oil seems to suggest that this market wants to test the contract highs of near $4.05. Still, with the high volatility it should give you a chance to pick it up cheap. Buy August Heating oil at 36500 targets $4.05.
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| It will be fireworks in Corn. No knee high by the Forth of July, in fact we do not know if Corn will get replanted. Cool weather followed by floods means Corn will be in short supply. | |
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| Sept Bonds are getting ready to rumble. The long end of the curve looks like a safe spot to hide some money. Safety buying in Bonds should continue until the 117 handle, then look for a correction back to about 11400. | |
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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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| The September Yen has broken out since last week's FOMC meeting. In the August options which are based on the September futures, I like a JYQ8 97/100 Call spread for approximately 50 points ($625) with a 6:1 risk reward ratio. You can sell a JYQ8 92 Put for approximately 35 points to help pay for the trade. | |
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| Once bitten, twice shy, but I'm still looking for a healthy correction in the crude market. I like a CLQ8 133/128 Put spread for approximately 100 points ($1000) with a 5:1 risk reward ratio. You can sell a CLQ8 160 Call for approximately 80 points to help pay for the trade. | |
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September US Treasury 30-Year Bond
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| Continued weakness in the equities market has given the treasury market some legs, but I'm starting to look at the short side as the equities recover. We'll keep this one simple and buy a USQ8 115 put for approximately 50 ticks ($781.25) and risk 30 ticks on the trade. On a break in the market, look to sell a USQ8 113 Put against your position. | |
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The USDA numbers this morning were generally bearish especially for corn with acreage almost 2 million acres higher than expected. But there are still plenty of opportunities for crop damage in the months ahead, and I'm looking at this as another buying opportunity. I like a CU8 780/880 Call spread for approximately 25 cents ($1000) with a 4:1 risk reward ratio. To help pay for the position, you can sell a CU8 670 Put for approximately 14 cents. | |
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I'm going to be cautiously optimistic in the US equities market. I like an ESN8 1310 Call for approximately 14 points ($700) risking half of that. On a rally, look to sell a 1340 or 1350 Call for approximately the same price to lock in a free trade.
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