Today in Commodities: The Fat Lady Sings

Matthew Bradbard submits: The indices trading higher should mean the dollar and Treasuries down and most commodities up. That is how we have positioned clients as you can read below. Oil is thru $76 trading near a one month high. The momentum is up but if you are not already long we would not suggest fresh entries at these levels.

Matthew Bradbard submits: For the time being indices are in the driver’s seat and as long as stocks are moving higher RISK is on. A falling dollar should also lend support. Oil made a higher high and higher low today but as we posted in our weekly commentary we need to see a settlement above $76 in July to think higher trade is ahead. Longs already in the market should remain long as long as the 9 day MA holds; current level $73.50 in July.

Matthew Bradbard submits: If and when new highs are made and new lows are forged investors must react. Understand the cure for low prices is lower prices and the cure for high prices is higher prices. November Crude is above the 50 day MA for the first time since August 12th. In the last 2 weeks prices have advanced nearly $7/barrel. We have moved our upside objectives to $82 followed by $84.50 in the November contract.

Matthew Bradbard submits: Regardless of the color of the book, traders did not like what they saw today. Crude traded below the 50 day MA but did manage a close above that level; in September at $76.30. We would be selling rallies if forced into the market, still thinking there is more down side. By the conclusion of the week we would expect an attempt at $74 in the lead month.

Matthew Bradbard submits: The direction the markets move this week will likely determine where prices go the next several months. We suggest booking profits on longs in crude thinking we could get a set back. We would rather be on the sidelines wanting in the market than in the market wishing clients were on the sidelines. Prices are getting over bought and have failed to make it to higher ground in recent sessions.

Matthew Bradbard submits: Though we expect no change in rates tomorrow, volumes have dried up in recent sessions; perhaps after 2:15 tomorrow investors/traders will be back at work. Crude oil should settle lower again today; on a breach of the 9 day MA at $77.50 expect a challenge of the 20 day MA at $75.50. If our assessment is correct, expect the distillates to give back as well. This could all change on tomorrow's inventory report or an overreaction on the Fed decision.

Matthew Bradbard submits: After making a new high Crude failed and closed almost $2 off its’ intra-day high. We suggest exiting all remaining longs as we suspect a set back. We anticipate a challenge of at least the 20 day MA; in August that level is $75.15. We’re not suggesting getting short but rather moving to the sidelines. Natural gas finally filled the gap we’d been calling for today; at $5.865 on the August contract.

Matthew Bradbard submits: In case you were not aware the FOMC is meeting today and tomorrow so stay alert as even inaction can be a market mover. We’ve advised aggressive clients to scale into longs in Crude futures and to gain bullish options exposure; today some clients bought May $95/100 bull call spreads. The 100 day MA held today just above $86 and the trend line comes in just below that level.