Trading Grains? Pay Close Attention to the U.S. Dollar
Comments for Friday, November 6, 2009
Looking Ahead to Today by Reflecting Back at Thursday’s Price Action
CURRENCIES:
Higher closes Thursday for the Japanese yen and dollar index while lower for the Euro fx, Swiss franc, British pound, Canadian and Aussie dollar but no changes technically. The euro and franc settled down but are still in long-term up-trends forming huge potential tops. The yen closed a few ticks higher continuing to be a sell unless settling over 11200 basis the December contract. The Canadian dollar closed lower now at the top of a good support (9000-9400) area while still forming a large potential top. The pound closed slightly lower now in a larger BULL TRIANGLE which means it should continue its up-trend overall. The Aussie dollar closed lower while in a long-term up-trend. Finally, the dollar settled slightly higher still in a long-term down-trend making lower highs and lows for at least six months. There also is good resistance over 7700. I hold Buy Signals for the Euro, Swiss and Can$; Sell Signals for the Yen, Aussie$ and US Dollar Index.
FINANCIALS:
Higher settlements yesterday for the eurodollar, notes and bonds but no changes technically. The Eurodollar made another new contract high and close while my sell signals are still in place for the notes and bonds with both possibly in larger potential topping formations at this time.
GRAINS:
Lower closes for Minneapolis, Kansas City and Chicago wheat, rough rice, oats, corn, soybeans, soymeal and soyoil. All of the wheat continue to show bottoming signs and should only be played from the long side at this time although it has been a struggle to go anywhere. Call for details. DON’T FORGET WHEN TRADING THE GRAINS AT THIS TIME YOU MUST PAY CLOSE ATTENTION TO THE DOLLAR! The reason that I’m mentioning this now is now is because the dollar had been showing signs of bottoming and, if it does, could put a lid on grain rallies in the near future. Corn closed weak this time with some fund selling still in a short-term up-trend looking toppy at this time once again after today’s action. We’ll continue looking at the dollar’s weakness for guidance but there still should be a record crop being harvested and that can’t be ignored. Rice had another strong close (7 trading sessions in a row) making its highest high and close since November ’08 once again. Oats settled higher again still in a long-term up-trend now in a BULL PENNANT but having choppy action over the last month. Oil settled higher but beans and meal closed lower. Oil continues to look higher while beans and meal have been chopping around over the last month with a higher bias. Buy Signals for Corn, Oats, Soybean Oil and Rice.
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.