From the category archives:

Forex Trading System

Searching for the Fair Value on the Dollar

December 15, 2009

The LFB submits:

Forex Trader Note: Usd weakness may hit on the strength of risk tolerance in the global market, with 1105 being the main price point to monitor on S&P futures trade. A daily close on either side of that may determine direction for the upcoming global sessions.

Questions on Usd strength will continue until fair value is found off the economic calendar this week, for the next two weeks the calendar is packed with red flag releases. Look for the mixed momentum in the forex pairs to continue, and therefore to be ready to bank near-term targets on most trades taken until the 4 hour trends and momentum reads get aligned.

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Today in Commodities: A Pause Before the Next Surge

December 14, 2009

Matthew Bradbard submits:

Same old story in Crude, prices slightly lower on today’s session. We think Crude is a buy and have advised clients to buy March $5 call spreads. In the January contract we feel a move to $76 is possible in the coming weeks. Continued cold weather and a mega energy deal today helped natural gas move 3% higher today. Immediate support is seen at $5.10 and then $4.80 in the January contract with resistance at $5.40 and then $5.50. We will be looking at buying a 40-60 cent dip for clients.

Sugar is higher by an additional 5% today; that marks a 3 day run of over 13%. Ideally you heeded our advice and bought the break-out. We expect a challenge of the September highs about 1 penny higher in the March contract. Big moves in the OJ and coffee markets as well; OJ traded to a 15 month high and coffee appreciated by 2.25%. Soft commodities could be the surprise bullish sector in 2010.

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The Dollar Risk Trade and Its Players

December 14, 2009

Greg Feirman submits:

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done.

John Maynard Keynes

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U.S. Dollar Up, Oil Down

December 13, 2009

Jason Kelly submits:

It’s the trade we’ve been watching for a while. At the beginning of this month, the dollar looked far too hated for its downtrend to continue. The dying dollar was largely responsible for the commodities boom on an elementary level, and elementary analysis was all we needed to think oil stood a good chance of moving lower.

The strong jobs report on Dec. 4 is what cracked the dollar’s descent. Even though the dollar extended that up move only modestly last week, it has so far this month bounced up from 15-month lows. That, in turn, sent oil down some $8 per barrel. Last week was particularly good for those short oil. We hold a half-sized position hedge against an oil price decline, and the hedge surged 13.5% last week.

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Today in Commodities: Rallying Alongside the Dollar

December 11, 2009

Matthew Bradbard submits:

After 8 days of selling, Crude is now oversold with the daily stochastic at 10 & 15 in the January contract. Clients have been advised to buy March $5 call spreads as we expect a $5 move higher in the coming weeks. Natural gas is too volatile for our liking currently. We will be looking to buy if prices come down 50 plus cents from current levels at the beginning of 2010.

Nice followthrough in sugar as a breakout is confirmed; sugar has appreciated 8.5% in the last 2 sessions to trade to its highest level in 7 weeks. Clients are positioned long March and May, we’ve suggested futures and options. Play the breakout in equities expecting a 5% move in the direction of the breakout.

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