Weekly Outlook for Commodities from Odom & Frey

Commodities continue to consolidate as we have mentioned in recent issues.  We are now seeing even the leader, crude oil, back off from its highs.  While we do not in anyway think the overall bull is dead we do suspect he is tired and looking for a mid summer nap.  Freddie and Fannie seem to have weathered the storm that we saw last week and confidence in the overall markets seems to be coming back.  Overall we are looking for more firming in the Dollar with continued consolidation across commodities as a whole.�
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Crude Oil:
Oil did have the “break” we warned about.  It does look like it was enough to “shake out” the weak hands.  We are now buyers of dips again and are looking for a retest of the old highs and the probability of pushing through 150 remains higher than the probability of pushing back below 100.  Between tensions in the Middle East and Africa, and continued increases in overall demand, there are more underlying reasons for the price to rise than fall. (…)

Weekly Outlook for Forex from Odom & Frey

This week all eyes are focused on The BOE.  Will they follow the lead of the ECB or continue to be the lapdog of the FOMC?  We expect the ladder, while wishing for the former as we feel that is the right thing to do.  We have a number of other important reports coming out both this week and next.  The overall tide against the Dollar continues to put in a bottom and we do feel that continuing to buy dollars on bounces is the overall best place to be.  We cannot yet say that the absolute low for the Dollar is in but we suspect that if it is not already in that it is close. (…)

Weekly Outlook for Commodities from Odom & Frey

This week we are seeing signs that some of the froth in commodities may finally be coming out.  While we remain long term bulls of the overall commodity sector, we feel at this time that many of the commodities are overbought or in the case of energy, in a bubble.  That is not to say that some markets, crude oil in particular, can’t keep going higher.  But we expect the overall CRB index to at least begin to consolidate, if not roll over.  Bottom line here is that it is time to be defensive as the “easy trend following money” is likely to have passed.�
Crude Oil:
Crude oil closed last week near the 145 level but opened this week and almost immediately fell to test 140.  Five Dollar moves in crude oil used to be a massive day but now it’s just an average day.  We still see signs that we could spike above 150 before topping but we are getting very close to a near term high if we are not already there.  Longs need to lock in gains and protect paper profits now.  This is not the time to be greedy.  We are exiting longs and in some cases even buying puts this week.�
Natural Gas:
The break we warned about in last weeks issue looks to be happening this week.  The August contract would have to close below 12.50 to signify a break in trend so wait for that before attempting to short.  This could just be another dip to buy so those with a high degree of risk tolerance can look to buy this dip with stop and reverse orders below 12.50.�
S&P500:
This market is still trying to hold support near the 1250 level.  While we may head fake below that level a bit this week, but we still feel that buying this dip is smarter than chasing it lower.  We are working stops from 1245 down to 1234 on longs that were taken between 1255-1275.  Our target remains at 1325.  Again buying dips this year has been harder to stomach, but it has still worked more times than not.�
Bonds:
Bonds have continued to rally as stock investors run for cover.  We do feel that the short term bounce in bonds is all but over and are now exiting the remaining long 112 and 113 calls we recommended two weeks ago.  At the same time we are now looking to buy the September 115 puts.  We are buying these puts with a trade weight of 50% of the position that was taken on the long calls two weeks ago.  In other words if you went long 10 calls with us two weeks ago we suggest you exit them now if you haven’t already, and then buy 5 Sept. (…)

Weekly Outlook for Forex

General Comments:
This week we have both a large amount of data coming out and a shortened week here in the States due to the 4th of July holiday on Friday.  All eyes remain fixed on Crude Oil.  The market very much expects Triche to raise rates later this week in an effort to slow inflation.  At this point it looks as if they will follow through with that and if they do we expect to see the Euro retest the old highs.  Bottom line is simply waiting to see how the rest of the world begins to battle inflation.  Bumbling  Bernanke and company tried to down play inflation in their statement last week.  This is just plain ludicrous and shows what kind of a dream world he lives in.  Even a person living in a cave knows that inflation is rampant and only getting worse.  I realize it is their job to lie to us, but for the love of god, do they really think that all of us are that stupid? (…)

Weekly Outlook for Commodities

The FOMC did nothing as expected.  Really not much they can do but sit by and watch the destruction happen and wonder why.  As if they were not the cause.  The reason we are in this mess is simple.  The devaluation of the Dollar is the culprit.  Never in the history of recorded time has devaluing a currency helped the long term prospects of the underlying economy and yet Bumbling Bernanke and company feel that they have the power to rewrite history.  Mr. (…)

Weekly Outlook for Forex

This week we are looking squarely at the summer doldrums.  Markets are drifting more than anything else.  We do not expect any abrupt change interest rate policy out of any major Central Bank anytime soon, so we do feel that many markets are currently a bit out of step with that idea.  That presents us with a number of opportunities this week.  While many markets have expanded their respective ranges we do not expect immediate follow through in most cases.  So our overall plan for the week is to fade many of the moves we saw last week as those extreme levels are tested again. (…)

Weekly Outlook for Commodities

What a difference a week makes….. (…)

Weekly Outlook for Forex

O&F FOREX News & ViewsBy: Head Trader, Derek Frey

June 9, 2008

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General Market Comments:

This week we continue with a full schedule of upcoming data announcements. (…)

Weekly Outlook for Forex

This week we have a virtual tsunami of data coming out.  We have 4 major central bank interest rate decisions starting on Tuesday with the RBA.  Then on Wednesday we have the RBNZ, followed by both the ECB and BOE on Thursday.  We end the week with Friday’s NFP report here in the US so we expect to see a ton of activity this week.  The main theme is still a Dollar that is trying to stabilize in the face of continued inflationary pressures.  Most analysts expect none of the central banks to move rates so it does seem that we have entered into a global pause which could last the balance of this year.  Any surprises would likely be on the side of cutting not hiking.  Overall this pause does point favor continued stabilization of the Dollar.  We continue to be Dollar buyers on dips. (…)

Weekly Outlook for Commodities

Commodities are trying to hold onto the gains they have had as you can see in the CRB index.  The CRB is building a bull flag on the daily charts.  However, we do not see immediate upside follow through any time soon.  We remain biased to expecting a pullback in commodities in the near term.  This is partially due to the stabilization we have seen in the Dollar as well as the fact that upside momentum in commodities is slowing considerably. (…)