What’s Up, What’s Down: Crude Oil Down, Lumber Down, Coffee Up High
Looking Ahead to Today By Reflecting back at Wednesday’s price action)
ENERGIES:
Reports Today: EIA GAS STORAGE. Lower closes for the crude and heating along with the RBOB and natural gas. All of the energies continue to look higher. Natural gas still has a KEY REVERSAL and now has a failed bull pennant so it must be watched closely at this time.
CURRENCIES:
Higher closes for the Canadian Dollar, British Pound, Aussie Dollar, Swiss Franc and Euro Fx while lower for the Japanese Yen and dollar index. The euro and franc continue their sideways pattern since May. Generally the longer the sideways pattern the greater the breakout when it occurs. The yen has been working lower since its highs back on March 17th showing little signs of turning around. The Canadian Dollar settled higher again still needing to close over 9900 and still forming a possible bottom. The Aussie Dollar had its second highest close acting like it will test its highs. The pound is still close to a buy signal and starting to turn higher overall. The dollar made its lowest close in 2 weeks looking weak and should test the 7300 area soon.
INDICES:
Reports Today: GDP (Q1 ’08). JOBLESS CLAIMS. Higher closes for the Nikkei, cash dow, S&P’s and Nasdaq while slightly lower for the dow futures. All of the indices continue to look lower overall with the S&P’s and Nasdaq in bear flags.
GRAINS:
Reports Today: EXPORT SALES. CENSUS CRUSH. Higher to sharply higher closes for Minneapolis, Kansas City and Chicago wheat along with corn, oats, soybeans, soymeal and bean oil while sharply lower for rough rice again. Minneapolis, KC and Chicago wheat continue to look higher overall and Minneapolis wheat needing to close over 11000 basis the July contract and September over 10000 .
Corn, while still bullish, is showing some retracement signs and needs to hold 700 basis the July contract and 738 basis December. However, both should test their contract highs according to the long term technical trend. Oats had a great close and should test their recent highs. Also oats have been making higher highs and lows since the end of May. Rough rice gapped and settled sharply lower again and now act like they will test the 18000 area basis the July contract. Soybeans, meal and oil settled strong still looking higher overall but showing some topping action. However the beans and meal broke out of their bear flags to the upside.
MEATS:
Mixed for live cattle while lower for lean hogs, feeder cattle and pork bellies. Cattle continue to look higher overall and now in a larger bull pennant while the feeders could go either way in its present area needing to take out its last high of 11500. There is support around the 11250 area basis the August contract. Hogs gapped and closed weak again making its lowest close since the end of March now making a triple bottom. Bellies also had a poor close making its lowest low and close since the beginning of April and unable to hold the 9300 area basis the August.
METALS:
Lower for gold, copper, platinum and silver. Copper still looks higher but has strong resistance up to 400 basis the July and September contracts. My next price objective is still 390. Gold settled lower still needing to take out its previous high of 912.5 while forming a potential bottom. Silver also closed lower basically in sideways action for the last couple of months making lower highs and high lows and now at the lower end of its range. Platinum also settled lower again starting to look toppy again but basically not going anywhere since the beginning of April.
SOFTS 06/26
LUMBER: Lumber closed lower in the September contract making its second lowest close again while the July contract looks much better technically but needing to hold the 240 area.
ORANGE JUICE: Orange juice closed lower with good support above 11000(Sept) but still in a bear market overall.
COCOA: Cocoa settled lower but very bullish overall.
COTTON: Cotton closed higher again still forming a large potential bottom and needing to continue holding the 8000 area basis the December contract.
COFFEE: Coffee had its highest high and close since March 17th basis the September contract again looking very bullish at this time. Coffee’s next objective is 15500.
SUGAR: Sugar closed slightly lower dipping below 1250 but bouncing back. Sugar needs to continue holding the 1250 area basis the October contract to sustain its upward momentum.
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 or call toll-free (888) 281-4158.