Wild swings and crazy volatility is becoming commonplace commodity wide. These markets are choppy and trend less so one must really monitor their positions on an intra-day basis. Crude oil will finish higher on the day but it remains a sell on rallies market near $80 in my estimation.

We maintain that a move to $76/75 is likely in the coming days to weeks. Stops should be in place just above $81 in case we are wrong on April futures. Options traders are positioned in May $75/70 put spreads.

Natural gas looks to me like a stretched rubber band that is about to “snap” 30-50 cents. We suggest scaling into April futures and purchasing June $5/5.50 call spreads. Since equities bottomed 17 days ago they’ve advanced roughly 6-8%; today’s prices are slightly above where we projected resistance to be but we still think by selling into this rally you will look smart 2-4 weeks from now.

Clients have short exposure in the S&P via futures and options and are currently under water. Textbook reversal in May sugar today lifting prices back above the critical 200 day moving average, closing 1 1/2 cents off the intra-day lows. Only the 3rd lower session in cotton in the last 3 weeks but prices could quickly trade back to 74/75 cents in the May contract. Assume an interim top was made yesterday just under 85 cents. Mixed bag in agriculture today.

I’m hearing that the recent swings are attributed to some big funds unwinding spreads. We suggest buying dips and though we could see some back and fill in the short run we expect Ag’s to be higher across the board 30-60 days from now. If longs have profits tighten up stops and then re-enter from lower levels. Stops were run in live cattle today; we suggest selling into this strength.

The 9 day moving average continues to support; 91.80 in April. Upside breakout in the metals today with April gold trading to a 7 week high. Next resistance is seen between $1155/1160. As long as the dollar remains contained we should see that level challenged this week. We would then look for an exit door being that would mean prices have advanced 10% in 1 month. We started to work out of longs for clients today. May silver closed just above the 50 day moving average trading above $17/ounce for the first time since late January. On a move to $17.30/17.60 we would recommend lightening up and booking profits on open positions. We do not think the upside is over in gold and silver but if our targets are hit we would step to the sidelines and re-evaluate, most likely buying the next dip in the coming weeks.

The Dollar has yet to bust the 20 day moving average but if it does we should see 79.50 in the March contract. That level is currently 80.35. Clients are still holding April Euro calls expecting 1.38/1.39. With some of the money clients took off the table in gold they were advised to buy June Yen puts. We are looking for a move back near 1.10 in the next 2 weeks.

Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.