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| 5 Hot Picks by Bill Borkowski of Dorman Trading | |
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 Bill Borkowski is a retail broker at Dorman Trading, LLC. A 12 year veteran of the futures markets, Bill has traveled around the country doing the seminar circuits. Bill works with clients of all kinds, offering support to online as well as full service traders. |
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The Treasury market is weak this morning on news that the U.S. Government will be increasing investment in Citigroup from 7.8% to 40%. This stock conversion plan seems to take the U.S. government one step closer to nationalizing certain U.S. banks. This week the Treasuries need to auction off $94 billion in fresh debt supply, and unless more safe haven buying occurs this week in the BOND markets the BOND market appears to be heading lower. With the Fed appearing to be backing away from directly purchasing long term debt and U.S. government borrowing this year on pace to approach 2.5 trillion in 2009, take your shots on shorting BONDS on any market rallies in 2009.
TRADE: Consider going long April 30 YEAR BOND 118 Puts at 1 basis point ($1000). Risk $600-$750 on the trade and trail up your risk on a break lower. |
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April GOLD has seen a tremendous rise up over the last month and a half. April GOLD has rallied from $805 on 1/15 to just above $1,000 ($1007) on Friday. With the March options in the METALS going off the board tomorrow afternoon, the GOLD complex should try to defend the $1,000 price at least for a few more days and maybe make a quick push to the $950 level before getting enough energy to push above $1,000 again. TRADE: Consider going short the April GOLD or MINI GOLD contract right in this area ($995) and consider risking the trade above $1,004 ($1,200 risk on gold, $400 on Mini GOLD). Consider taking profits first at $955 with the second level at $933.
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The STOCK market is trading lower again this morning as traders are uncertain on what the government will try to do next to prop up these markets. Banking stocks rallied overnight on the news that the U.S government was going to invest more capital into Citigroup to keep it afloat for the time being. While the temporary nationalization of certain U.S. banks can\not be ruled out, this step taken by the government may be enough to start to put some confidence back in the markets. Also, on Friday the consumer prices report showed a rise for the first time in six months which could alleviate some deflationary fears as well for the short term. With the market over sold
and 750 acting as a solid support level, consider going long the MINI S&P at the current level (753.00). Consider risking the trade below 743.00 with the first target around the 780.00 level and the next target at 816.00. |
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March U.S. DOLLAR was under pressure initially last night on the news of the U.S. government increasing its stake in Citigroup. Also pressuring the DOLLAR are rumors that the Treasury is trying to find private funding for automaker financing. With a more detailed bank rescue plan possibly coming out this week, the U.S. DOLLAR could continue to fall down with the lack of safe haven buying that it has seen lately. TRADE: Consider going short U.S. DOLLAR at the current level 87.35, risking the trade to 87.86. 1st target on the trade is 8638, with the main target down at 8559. |
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Like the GOLD, we are interested in the short side of SILVER. This market is now arguably in position to repeat one of the greatest moves in SILVER in many years. You need to go back to 1980 to find a set up like this. In the coming days we will look to sell the SILVER against the highs. We are currently recommending the use of the MINI contracts whenever possible. The swings and overall volatility in the markets has made us reconsider the benefits of trading the full size contract. With the Silver trading in 50 plus cent ranges day to day, one must consider the risk of trading a full 5000 ounce contract. With that in mind, we will indeed use the mini contract; look
to short the May mini SILVER as close to the highs this week as possible. Consider placing the stop above 1480.00. Trail the stop down as the markets declines and keep the profit objective open.
***** Futures and Options Trading is speculative and involves substantial risk of loss. |
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| 5 Hot Picks by Sterling Smith of FuturesOne | |
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 Sterling Smith is developer and publisher of the Strategic Traders Index, and a 17-year market veteran. Registered as a CTA he is often quoted by the Wall Street Journal, Down Jones News, Bloomberg, Reuters, and has been a frequent guest of WFLD Fox News Chicago. Sterling works with clients of all sizes to help improve their trading.
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Gold is in a solid up trend, but failed to hold 1000 thus far. Many studies are overbought at these levels, so some degree of correction can be expected. I am moving more towards a more bullish stance, as gold has been able to rally even when the dollar climbs. Look for corrections as buying opportunities. | |
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| Bonds have been in a somewhat wide consolidation period for most of the month, and until we see some real news involving the banking system I am looking for this pattern to continue. |
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The cash Dow Jones Industrial chart looks exceptionally weak, and with several stocks trading below $10, this should not come as a surprise. What becomes of GM, Citicorp, and Bank of America will weigh heavily here. The S&P chart is no picture of health here either, but at least it is not trading underneath major support. A stronger day here today can lead to some bottoming ideas. The NASDAQ remains channel bound, but I still think the likelihood is more to the upside than the downside. |
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| While we are a bit off the lows, the overall trend remains weak, and it is my general thought that on the front month contract $30 is more likely than $50 in the long haul. I am looking for continued range bound trading. |
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| Sugar continues to meander higher, in fits and starts, and I am thinking that as an appetite for risk begins to return to the marketplace, sugar can benefit. |
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