Comments for Wednesday, January 6, 2010
Looking Ahead to Today by Reflecting Back at Tuesday’s Price Action
GRAINS:
Higher closes Tuesday for corn, soybeans, soymeal, soyoil while lower for Minneapolis, Kansas City and Chicago wheat along with rough rice and oats. All of the wheat have resistance at the 575 level which is a little unusual but should continue working higher overall. However, with heavy fund trading and spreading between the grains I have a feeling it won’t be smooth sailing for a while in either direction. Corn settled higher once again making its highest close since December 12th even if it was for only a quarter of a cent. Corn still has managed to stay within the 375-425 trading range (Dec.) since October. With the dollar struggling at this time and the energies breaking out to the upside, the grains shouldn’t drop too much and, if they do, they’ll probably rally back up again. The corn, for example, has been acting pretty strong in spite of weak looking fundamentals. Rice settled lower still near a possible buy signal with 14500 (Mar.) the key price level to hold. Resistance is around 15500. Oats closed lower breaking its streak of closing higher seven trading sessions in a row still in an up-trend now needing to close over 280 (Mar.). The bean complex closed higher again with the beans and meal ending up near their session’s highs. Have you noticed over the last several months that whenever meal (Mar.) settled over 310 that it always ended up sooner or later turning back down for decent size retracements? Oil made its highest high since June 3rd before settling back and closing mid-range. The bean complex has been turning higher recently preparing to continue its long-term uptrend again. I hold Buy Signals for Oats and all the Wheat contracts and Rice. Please feel free to contact me for details.
FINANCIALS:
Higher for the Eurodollar, notes and bonds. The Eurodollar made a NEW CONTACT HIGH CLOSE. The bonds and notes continue to look lower overall but both did make their highest highs and closes in a week and the bonds had in a failed bear pennant meaning possible retracement action will happen near term.
See the balance of my morning comments, including the Metals, Softs, Energies and Grains, at my website. For my complete coverage, visit my commentary page at www.markethead.com.
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.
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.