We have a number of shorts on commodities, thinking a setback is due. A failed rally... say it is not so! Crude looks to close higher on the day but below $82 and $1 off its high. We remain convinced a 5-7% correction is right around the corner. Forget the fundamentals and technicals; throw it all out the window and just recognize that even in a bull market, it is healthy to get corrections. In the last 5 weeks Crude has moved almost 19% higher without any significant correction; it is time.

Buying is starting to emerge in natural gas. We have been early to this trade but have held our guns thinking a short squeeze could lift April futures back over $5 in a hurry. Clients are long April futures and June $5/5.50 call spreads.

One year ago today, equity markets bottomed and a vicious rally ensued - but are we any better off than we were at that time? The lack of new buying in oil above $80 hints of a correction to come. Yesterday we made a new high and failed, and today we saw a lower high and lower low, so I smell correction. Clients own $5 put spreads thinking of a trade to $76/75 in the coming weeks.

We hate to talk our position but we think natural gas is a BUY. Clients own a light long in April futures and June $5/5.50 call spreads. It is my opinion that this trade is too crowded for the shorts and if we do start to trade higher, a short squeeze could happen.

The phrase 'March Madness' is coined for the college basketball tournament, but I think it is an accurate description of what to expect as a trader this month.

At its highs today, oil was less than $3/barrel from making new highs on the year. Being bearish for the last 1-2 weeks has made our clients no money, but we still feel a trade to $75/76 is imminent. We are not disputing a trade in summer is likely up to $90, but first, a correction. We still favor $5 put spreads. Natural gas should finish down 3.5-4.0% lower on the week. That is not too bad! Clients have a small long position in April futures and June call spreads, and at the moment are all under water. We expect the next 2 weeks to be better to us in energies; that means crude down and natural gas up.