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I'm going to give an update on my gold futures trade, in which I have a long position dating back to Dec 28, 2012.
I am still long in the gold market. I used the December 2013 contract for this trade, because my analysis is for a multi-month dynamic and I want to have the flexibility of staying in this trade for a multi-month time frame.
I bought gold in late December 2012, at 1666 on the Dec 2013 contract. The Dec '13 contract trades about 8 points higher than the April contract, which is currently the front/high-volume contract in the gold months.
Last week we saw a lot of volatility in gold prices. We saw gold going up and gold going down somewhat dramatically over a few days in a row. Although this is strange behavior, and some people interpret these types of swings as bearish, I am still quite bullish in this market. I am still anticipating a rise in prices, and so, I am holding my long position in this market.
We still do need to see prices breaking and closing above the 1700 level to attract more public and institutional interest. However, I do believe that the real-deal bigwigs have been, and are, bulking up their positions at these prices.
All this being said, I am prepared to exit my position in the face of dramatic negative changes. I don't marry trades, I just court them.
In other markets, I am still somewhat bullish in sugar futures. Prices seem to be stagnating with a seemingly bearish bias. However, I just can't help but feel instinctively bullish in this scenario.
There are three main reasons for this. First, we are, generally, in a lower price range. At least, we are taking into consideration the last 2 to 3 years of price activity.
Second, prices are behaving somewhat quietly, calmly, eerily. This is often so characteristic of that famous phrase "the calm before the storm". Quite often before dramatic price movements we see what appears to be cool slow price action. This is by no means a reason to rush out and buy. However, it is a reason to keep one's eyes open. And I've got my eye on this market.
Third, I can't help but feel a bullish in sugar due to certain fundamental factors. We keep hearing about sugar surpluses and acreage increases, but those aren't the fundamentals I'm referring to. Something is telling me to keep an eye on this market, with a long interest in mind.
Crude oil is looking bearish to me right now. I do believe we will see crude oil prices go down somewhat soon. I am currently looking for selling opportunities, and I am anticipating one within weeks.
I am still long and bullish in gold futures. I am looking to short crude oil soon. I am keeping my eye on sugar, as I am passively bullish in this market.
****UPDATE, 2013-02-04: I am also now watching cocoa futures for a buying opportunity, as I am bullish in that market and it seems the time may be almost upon me to trade this.
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