Commodities Essential - June 23, 2011

Alert: crude, sugar, gold and corn falling together. 


Add back a long on DTO and a short on SGG;  


Adjust stop-loss levels on IAU and CORN 


I recommend FOUR things today:


For ALL subscribers … 


1) Short crude oil prices via the PowerShares DB Crude Oil Double Short Fund (DTO).  Crude oil seems to have run out of steam on its bounce higher. Additionally, there remains an overwhelming long position that likely needs to be unraveled further. Let’s get back into DTO and play for a move in crude oil down to roughly $83 per barrel. Technically crude oil looks weak.


2) Short sugar prices via the iPath DJ-UBS Sugar Subindex Total Return Fund (SGG). Unfortunately we were stopped out on our first attempt here, but I believe sugar has retraced as much additional ground as necessary. Sugar prices are already down sharply today but I think this move could be a big one.


For ONLY those subcribers already holding a position in IAU and CORN


3) Adjust the stop-loss on iShares Gold Trust (IAU). Gold has been a steady performer in the face of broad commodity market volatility. Today it’s getting hit pretty hard after failing to breach intraday highs. Let’s preserve most of our gains now, in the event today’s momentum sees follow-through, by moving our stop-loss higher.


4) Adjust the stop-loss on the Teucrium Corn Fund (CORN). Corn has gotten hit sharply over the last week. The move appears overdone and due for a bounce. Nevertheless, I think it makes sense to reduce our open risk on this position as the commodities market gets hit in unison today — corn may not be able to fend off the downside momentum. 


 ******


Trade Essentials.


DTO (Last Price: $55.95)


Buy shares of PowerShares DB Crude Oil Double Short Fund, symbol DTO, at the market. Then place an order to SELL ALL your shares of PowerShares DB Crude Oil Double Short Fund, symbol DTO, at $52.70, STOP. This order is good till cancelled. 


[Please note this is a 2x-leveraged, inverse ETN which means it will move roughly twice as fast, and in the opposite direction, as the underlying price of crude oil; for those who do not wish to take on added leverage on this bet but do wish to position for declining crude oil prices, consider SZO instead.]


SGG(Last Price: $83.06)


SELL SHORT shares of iPath DJ-UBS Sugar Subindex Total Return Fund, symbol SGG, at the market. Then place an order to BUY-TO-COVER ALL your shares of iPath DJ-UBS Sugar Subindex Total Return Fund, symbol SGG, at $90.20, STOP. This order is good till cancelled.


 


[Please note that a margin account is required in order to ‘sell short’ a position in SGG.]




IAU (Last Price: $14.88)


CANCEL AND REPLACE the order to sell all shares of iShares Gold Trust, symbol IAU, at the $13.95, STOP. NEW PRICE: Sell all shares of iShares Gold Trust, symbol IAU, at $14.80, STOP. This order is good till cancelled.




CORN (Last Price: $42.74)


CANCEL AND REPLACE the order to sell all shares of Teucrium Corn Fund, symbol CORN, at the $40.00, STOP. NEW PRICE: Sell all shares of Teucrium Corn Fund, symbol CORN, at $42.00, STOP. This order is good till cancelled.


 The market is moving quickly; I recommend you act as soon as you can on this orders.