WTI contract expiry and Gold weakness

Expiry of K9 options now out of the way, SFOT reckons M9 options would be a bit trickier given the open interest in June is historically much larger than May. Large layers of calls out to 60 and puts down to 40, with the biggest open interest at $50 again combining both calls and puts. The expiry of K9 futures in 2 days time may present some wild move in K9/M9 spread. It has broken through -$2 and looking likely to move higher still. SFOT will stay slightly long of some of these spreads as he still sees potential for an upside squeeze.

Gasoline cracks in the US has been the star recently and readers will know this is one trade SFOT likes to have on, either on its own or vs Jet cracks /other middle distillates. The situation has not changed, and a buy on dip strategy will be applied in this trade.

Jul09 Rbob Crack

Less of oil, but more of Gold and USD strength this morning vs EUR which catches the eye. SFOT owns some small units of Gold but now that it has broken the 10day moving average, and hearing from sources end user demand isn't there makes him tentative to buy more here. Buying no dip is NOT one strategy to be applied here at this moment. Perhaps a rally back above the 10day moving average would give him a little more comfort to add to the length.

This will be the last post this month as SFOT will be away in an island state near the equator for 2 weeks. Yes, sunshine, good food etc. However, he may check in occasionally the next 2 weeks and perhaps post an odd piece if he does get more inspiration from the sunny island. In the mean time, good luck and good trading