Crude will close down about $1.50 on the day and about $6 off its highs intra week highs. The fact that prices did not break down and heavy buying came in below $70/barrel this correction may be close to over. Clients are still holding their May call spreads and are under water but we expect this trade to be profitable. We have NO opinion here until the dust settles. We have no long or short exposure in natural gas with clients. We started to buy June RBOB call spreads this week and will most likely be adding to this position in the coming weeks.

We expect to see a rally in Indices to start next week. That being said, we’re not saying to get long, but rather to use this rally to exit positions or to sell; ideally we get a window of 1105/1115 in the ES and SP to sell.

Disappointing inventory news - and oil still held up well, only down 25 cents on the day. Use $76 as support in the March contract; our objectives on the upside are $78.25 and then $79.60-$80. Depending on how tight your stops were on natural gas, you may have been stopped at a profit; prices traded 1-2 cents lower than yesterday. We suggest on a trade above $5.75 to take remaining futures off and to exit your call spreads.

We are still waiting for a trade up to 1105/1115 to be a seller in ES and SP for clients; until then no action taken. We are looking for a way to get short Treasuries pricing out a variety of time frames in both futures and options…stay tuned. Continue to scale into shorts in 2011 Euro-dollars.

Crude oil has advanced almost $5 off its lows in the last 2 sessions trading back above $77. Ideally you are already positioned to take advantage of this and further upside. In the March contract we see $80/barrel this week if not next. On that we would tighten up stops and start looking to lighten up on your positions. Natural gas was a gainer as well but to a lesser extent only gaining marginally. Needless to say prices have made higher highs and higher lows for the last 3 sessions and we see more. We suggest trailing stops to just below today’s low. In March on a trade to $5.75 we would exit a portion of longs. Contact us for more specifics. The April call spreads should have gained, we will have exit orders to come on further upside. Indices were higher by over 1% as of this post; still we want more upside before selling on behalf of clients. See recent posts…we suggest using 1105/1115 in the ES & SP as a sell window.

We advised taking profits on all cocoa shorts today; after a 9% move lower in 9 sessions we may get a bounce. Sugar was higher but the calendar spreads (long July/short March) picked up for the second day in a row. Clients have gotten back approx. $1100 per spread and will be showing a profit on another day like today. We expect there to be another 75-100 ticks in the spread ($840-1120).OJ was higher by a nickel intra-day closing 1.50 cent higher on the day. A trade above $1.50 in May should get clients their objective on their May back ratio spreads.