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Market *PIC*

The buying that we saw late last week was obviously option expiration related. However commercial buying is well represented on the way down, crowded in July and scattered in the forwards but of good size and extending to Dec19. Systems will show themselves at around 8:00 as sellers. For trading purposes it really doesn’t matter if the market goes up or down but for the longer term the present picture is very familiar. Those that sold when the market was rallying are now buyers. I continue to believe that the burden is on these particular shorts but only the market will tell. For now, although lower, the market doesn’t seem to be dropping so easily, We’ll see at 8:00. It also appears that stops were hit when the market broke 119.00. This could be a sign of things to come if we head lower. The mentality, imo, is to start thinking about buying based on the activity of current market participants, longer term of course. But we’ll see if we close below Nagual’s volatility system level. Spreads are on the defensive. JulSep is -2.30 bid for small quantity but July is still the lead month and the more the funds sell the more they’ll have to roll. The frost spread SepDec is -3.55 bid and hasn’t seen this lower level. RC seems to be holding steadier than KC as the arb is 39.35 in July. Spreads there are slightly softer. USDBRL closed at around 3.5982 and the Real should be steadier as the day goes on if the $ is the only factor which is down today against all currencies except the ¥. COP is 2836.67 +2.50. Although the $ is weak most markets are depressed today. This, I feel, is relevant to KC, at least for the present. Bond futures are lower, as are metals and crude. Sugar is unchanged but cocoa and cotton are lower. Equities are slightly higher.

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Market *PIC*
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