Crude looks to close almost $4 off its intra-day high dragging prices back near $80/barrel on the December contract. Today’s low and mild support is seen at the 38.2% Fibonacci retracement level at $79.85. Next support is seen at $78.50 followed by $77.25. We’re expecting prices to trade down and have advised light short futures exposure in December and January $5 bear put spreads. Even with Crude and the distillates losing 4-5% today natural gas managed to keep its ugly head above water. Could a bottom be in the making? Indices as of this post are off 1-1.25% Most of you know we’ve been calling for a correction…could this be day one. Some clients remain short via November and December put options thinking selling could intensify in the coming sessions. The 50 day MA gave way in cocoa today with prices off by 1.50%. We’re expecting another 2-4% lower from here. Cotton was lower by 2.74%, aggressive traders could start gaining bearish exposure again. Coffee posted a four week high gaining nearly 3% today. Hold off on shorts for a few days to see if the August highs are challenged. Lumber rolled over and appears like prices may re-visit the trend line that has held since the summer lows; that would drag January back near $230. Clients have NO exposure. (more)
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