What's Up, What's Down: Oil Futures Drop, Dollar Index High

Comments for Tuesday, September 2
Looking Ahead to Today By Reflecting back at Friday’s price action

CURRENCIES:

Higher for the Japanese Yen and dollar index while lower for the Aussie Dollar, the Canadian Dollar, Euro Fx, British Pound and Swiss Franc. All of the currencies continue to look lower. New recent lows and closes for the euros, francs and Aussie Dollar while the pound made a new contract low and close for the fourth trading session in row. The Canadian Dollar's upward momentum was hurt by today's action but is in a strong support area at this time. The yen made a new recent high and close giving me a buy signal. The dollar, conversely made a recent high and close as it continues its upwards trend. Should continue higher overall now in a larger bull flag than yesterday.

FINANCIALS:

Unchanged for the eurodollars while the bonds and notes made new recent highs before settling low telling me to take profits on long positions. Therefore liquidate, lighten up and/or tighten stops. The eurodollars are still in a resistance area trading sideways with small daily ranges for quite a while, while the bonds and notes continue to look higher overall but could be hurt by today's reversal type action.

ENERGIES:

Lower closes for crude and heating oil along with the rbob and natural gas in relatively quiet action ahead of the long Labor Day weekend. The crude, heat and rbob are still forming potential bottoms but I still feel all of their long term tops are in place. The natural gas continues to look lower overall.

GRAINS:

Higher for rough rice, oats and bean oil, unchanged for soybeans while lower for corn, soymeal, Minneapolis, Kansas City and Chicago wheat. Minneapolis wheat along with KC and Chicago wheat are still in support areas but now at the lower end. Although overall action has been sideways all wheat, especially Minneapolis, are in critical areas to hold.

Corn closed lower again and could retrace to the 550 area or rally up to the 650 if its potential buy signal off a possible bottoming formation happens. Like wheat, corn is in a critical area to hold. Oats settled higher but look like they're in a bear flag in a weak market. Rough rice settled sharply higher with a new recent high and close. Rice basis the November contract needs to close above 1900 it to continue its upward momentum. The bean complex needs to take out its recent highs to possibly turn around its downtrends.

INDICES:

Sharply lower closes for the cash and Dow futures along with the S&P's and Nasdaq. The overall trend for the indices is basically sideways until it breaks out of their consolidation patterns one way or the other. However, my buy signals are still in place even if I've had much stronger ones in the past!

Rick Alexander has been a broker and analyst in the futures business for over thirty years. He is a Vice-President for Sales and Trading at the Zaner Group (www.zaner.com) a Chicago-based futures brokerage firm. If you would like a free booklet explaining the charts mentioned above, email Rick at ralexander@zaner.com.