Another Wave Of Unleaded?
Dave Landry will be on
vacation until next week. Futures Editor Marc Dupée will be writing the
Futures Outlook in his absence. Dave returns Wednesday.
While
Unleaded gasoline
(
HUM1 |
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PowerRating) may pullback from its lofty levels and
make good on its Turtle Soup Plus One
Sell setup, the bigger picture pattern suggests that this may be only wave
three of a five-wave Elliot wave pattern. The upside and intense uncertainty in
this Momentum-5
List leader will remain until at least Memorial Day, the official beginning
of the summer driving season. Note that this contract at the NY Merc is the
deliverable grade for the “reformulated,” cleaner burning gasoline,
mandated by environmental law in certain metropolitan areas. Any spot shortages
or refining glitches like we had today at two refineries –particularly in
reformulated grades — could continue to pump the shortage-scare rally.
In the grains, Momentum-5
List member soy meal
(
SMN1 |
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PowerRating) led the bean complex with its
seventh gain in six days to close at a two-month high. Look for soybeans
(
SN1 |
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play catch up to meal and for soybean oil
(
BON1 |
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contract low and make good on its Turtle Soup Plus One Buy
setup.
July wheat
(
WN1 |
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PowerRating) could move back into a choppy,
multi-week consolidation band after three down days that have left it somewhat
over sold (in the very short-term) at a
New 10-Day Low. This contract triggers a Pullback From Highs
setup above the high of today’s low bar, above 274 1/2.
In currencies, June
Canadian dollars
(
CDM1 |
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PowerRating)Momentum
play. One of the significant features Mark Boucher looks for in markets with
runaway potential is a combination of at least five thrusts, laps, or gaps
within a 21 day period. (Five consecutive up-closes also count as a runaway
indicator, which this contract has recently achieved). Although currencies gap
regularly because they are influenced by around-the-clock Forex trading, the
Canuck buck has logged more than this critical mass of signals and could, thus,
turn into a runaway market. The CDM1 is also on the Multiple Days Low
Volatility List, hinting it is ready to make a larger-than-normal move as
volatility here reverts to its mean.
In the softs, cocoa
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CCN1 |
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PowerRating) is a big picture
head and shoulders and descending triangle. But the 950-960 support has been
difficult to crack. Selling could knife the contract lower if cocoa closes
significantly below this level.
Coffee
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KCN1 |
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PowerRating) got knocked off the
Momentum-5 List for Monday, but upside interest in this contract remains, as
shorts are exiting ahead of the Brazilian winter to avoid getting caught short
in any freeze scares.
Cotton
(
CTN1 |
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PowerRating) has been basing at contract
lows, but has failed to fall below 45.00. At this level, look for a dip to tag
the April 30 low, but then to move back up in a Turtle Soup Buy reversal. These
occur in the same day (rather than on the following day as in the TS+1
reversals) so set alarms for this setup.