Comments for Wednesday, October 20, 2010
Looking Ahead to Today by Reflecting Back at Tuesday’s Price Action
Futures and options trading is speculative in nature and involves substantial risk of loss. Futures and options trading is not suitable for all investors.
Thanks to China’s artificially strengthening their currency our dollar rallied sharply breaking the grain complex along with most other currencies. Don’t forget that historically speaking, this type of intervention almost never works.
Lower closes for Minneapolis, Kansas City and Chicago wheat along with oats, rough rice, corn, soybeans, soymeal and soyoil. The wheat complex has been in a trading range, albeit a wide one, since August still unable to breakout of their respective resistance areas, at least so far. Although I have a sell signal for the complex it wouldn’t hurt to consider selling near the upper end of their trading ranges and/or buy at the lower end. Wheat had previously rallied off of bullish fundamental news in Russia but now has settled into basically choppy action. Long-term the wheat has the potential to rise if the rest of the grain complex continues higher.
Corn settled lower for the fifth trading session in a row in spite of continued talk about increasing ethanol in gas 5% for cars that were built after 2007. However, I look for another rally after the dollar drops back down.
Oats also settled lower for five consecutive trading sessions and now is in a support area long with forming a potential top at this time. Rice made its best high since February before closing lower in reversal type action. The bean complex also settled lower again but still in nice uptrends.
ALSO, DON’T FORGET THE GRAINS TEND TO FILL A MAJORITY OF THEIR GAPS and there are gaps in KC wheat, corn, beans and meal so be sure take this into consideration when taking POSITIONS. BUY SIGNALS FOR OATS, ROUGH RICE, SOYBEANS, SOYMEAL AND SOYOIL. SELL SIGNALS FOR MINNEAPOLIS, KANSAS CITY AND CHICAGO WHEAT. CALL FOR DETAILS.
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. Email Rick at email@example.com.
The information in this Report and the opinions expressed are subject to change without notice. Neither the information nor any opinion expressed constitutes a solicitation by Rick Alexander or the Zaner Group of the purchase or sale of any futures or options. Futures and options trading is speculative in nature and involves risks. Spread trading is not necessarily less risky than outright positions. Futures and options trading is not suitable for all investors.