What’s Up, What’s Down: Crude Down, Minneapolis Wheat Up, Platinum Up
Comments for Tuesday, May 13 (reflecting back at Monday’s price action)
ENERGIES
Lower closes across the board with the crude, RBOB and natural gas making new contract highs first while the heating oil is in a bull pennant. All of the energies still look higher overall.
CURRENCIES
Higher closes for the Euro Fx, Canadian Dollar, British Pound and Aussie Dollar while lower for the Swiss Franc, Japanese Yen, Canadian Dollar and U.S. Dollar index. The euro broke out of its down channel, now forming a possible bottom, while the Franc and Yen also are trying to form small bottoms at this time.
The pound made a new recent low again before settling higher, still looking very weak although in a support area at this time. The Canadian Dollar closed higher again moving gradually higher overall since the beginning of April and is near the upper end of its trading range. The Aussie Dollar closed higher still, acting as if it will test its highs while in a triangle pattern. The U.S. Dollar index closed lower again but is in a larger bull flag, still looking higher overall.
INTEREST RATES
The bonds closed unchanged while the Eurodollars and notes settled lower. The Eurodollars are trying to bottom but have strong resistance at the 9750 area basis in the June contract, while the bonds and notes are in the process of forming possible bottoms and must be watched closely. I’m close to buy signals for both of them.
INDICES
Today’s Economic Releases: Retail Sales, Business Inventories. Higher to sharply higher closes across the board. All of the indices still continue to look higher overall.
GRAINS
A sharply higher close for Minneapolis wheat, higher for Chicago wheat, unchanged for soymeal , while lower for corn, soybeans, bean oil, oats and rough rice. All wheat continues to look lower overall but has held its nearest support areas so far. Only Minneapolis wheat is in a rounding bottom formation. Corn made a new contract high again before closing slightly lower. Corn settled very weak but is in a strong support area, still looking to move higher overall.
Oats closed lower once again but still looks as if it’s in a bull triangle. There is a double top at a 425 basis in the July contract. I don’t feel this will hold, but it looks more important each day it’s still there. The 450 area is still my next objective. Rough rice closed lower, breaking its higher closes streak, but is in a bull pennant, meaning it should continue higher and probably test the 240 area basis in the July contract. The bean complex closed unchanged to lower but should continue moving higher in at least the short term.
METALS
Higher closes for copper, silver and platinum while slightly lower for gold. Copper settled higher but is in a bear pennant looking lower and I’m still close to a sell signal. Gold is still forming a possible bottom but silver is flattening out and its potential bottom formation is fading. Platinum exploded higher meaning it must be watched closely for a buy signal that still hasn’t happened.
SOFTS 05/13
LUMBER: Lumber settled mixed but is in a good support area with a bottom formation in place and should work higher.
ORANGE JUICE: Orange juice closed higher this time and that has formed a nice-looking bottom. This market should continue higher overall.
COCOA: Cocoa slightly higher again but still hasn’t broken through its resistance area basis in the July contract. This market is bullish overall but is having choppy action and needs to close over 2800 or it could correct down to the 2600 area.
COTTON: Cotton settled higher from the crop production and supply/demand but is still looking lower overall However, this still is not a good area to go short, and it could retrace back to the 7500 area basis in the July contract.
COFFEE: Coffee closed higher again with resistance all the way up to 14000. This market still looks lower overall but a close over 13500 basis in the July contract would start to turn this market around.
SUGAR: Sugar settled slightly higher but is in a bear triangle looking lower overall.
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 ralexander@zaner.com.