Weekly Update: June 5, 2013

Weekly Update:  June 5, 2013

 

Commodity Watch:

Trading in important commodities has been mostly range bound over the past week… 

Gold and silver remained stuck near important technical levels at $1,400 and $22.50, respectively.  Even though the US Dollar has weakened recently, bulls can’t seem to gather enough steam to push precious metals higher. 

Natural gas dropped on the week, trading from $4.20 mmBtu last Wednesday, down to $4.00 today.  Remember, weekly EIA natural gas inventory data comes out tomorrow at 10:30 AM ET.  The $3.90 area remains a strong level of technical support for natural gas.  Watch for strong buying interest from investors if the market hits that area.

Corn continued its choppy multi-week trading in the $6.50- $6.60 a bushel range.  The USDA has their WASDE report coming out June 12, next Wednesday.  Corn will likely remain stuck in this trading range until the WASDE data hits the headlines.

Keep a watchful eye on your e-mail inbox in coming days as our next trading opportunity will likely present itself soon!

Let’s go over our sole open position, WTI crude, in our position updates…

 

Portfolio Recap

. . . . US Oil Fund (USO) July 2013 $33 Puts

West Texas Intermediate (WTI) crude is still stuck in a choppy trading range between $97 and $92 a barrel.  Even though the Dow had one of its largest selloffs in weeks (-212 points today), crude managed to hold above $93. 

The bullish resilience displayed by oil this week is partly due to a bullish EIA storage report that came out earlier today.  What’s more, a new surge in Middle East tensions is helping keep bears at bay.

However…

Barring a Middle East “event”, it’s still likely that crude breaks to lower prices in coming weeks.  With US supplies near multi-decade highs, there’s simply too much crude available for WTI to be priced in the mid-$90 a barrel range.

As a result, let’s keep holding our July USO $33 puts… 

Remember, we want WTI crude to move lower.  Technical resistance is at $97.50, while support is at $90 and $85.

 

Category: Commodity Trading