What’s Up, What’s Down: Crude Oil Down Sharply Along with Heating Oil, RBOB, and Natural Gas
Looking Ahead to Today By Reflecting back at Monday’s price action
ENERGIES
Sharply lower closes for crude and heating oil along with the RBOB and natural gas. All of the energies continue to look strong overall but, of course, potentially highly volatile at all time highs. Even sharp corrections mostly likely will be a small percentage of the overall move.
CURRENCIES
Higher closes for the Swiss Franc, Euro Fx and Canadian Dollar while lower for the Japanese yen, British Pound, Aussie Dollar and the dollar index. The euro and franc continue to look higher at this time but losing a little steam while the yen was hurt again by today’s action but still has a buy signal although a weak one after the last two trading sessions. The Canadian Dollar settled higher but is still acting like its retracement rally might be over. The Aussie Dollar also closed lower again but this time with a failed bull pennant. Now it’s starting to look toppy and bulls should be careful. The pound closed lower again following through from Thursday’s sharply lower close. Now the pound is in a good support area but still looks higher overall also looking toppy. The dollar index settled lower this time still looking weak overall but does have some bottoming signs showing up at this time.
MEATS
Lower closes for live and feeder cattle along with lean hogs and pork bellies again. Cattle broke down sharply out of a bear flag now giving me a sell signal. Feeders have little support down to the 11000 area basis the August contract and are slipping in spite of sharply lower corn prices which tells me feeders are too high priced at this time. Hogs also closed lower in a very weak market but does have a large gap at 7235 basis the August contract. However, this market shows no sign of rallying at this time even with sharply lower corn prices. Bellies gapped and closed down its 300 point daily limit making a new contract low and close.
METALS
Lower for copper, gold, silver and platinum again. Platinum has given me a sell signal while copper is starting to look toppy. Gold and silver still look bullish overall but feel lower at this time and may retrace further down.
SOFTS 07/08
LUMBER: Lumber closed higher again still trying to bottom in what is still a bear market.
ORANGE JUICE: Orange juice rallied sharply higher before closing lower in what looks like minor reversal type action. Tuesday’s action could be important to see if there is much, if any, follow through lower.
COCOA: Cocoa gapped and settled sharply lower again with little support down to 2800. Obviously its bull move is over at least for now after today’s follow through from last Thursday’s action.
COTTON: Cotton also closed sharply lower for the 6th trading session in a row unable to hold its support around the 7500 area basis the December contract. This was the lowest close since last December.
COFFEE: Coffee settled sharply lower now close to its support area of14000 basis the September contract. For now its bull move is over but can be bought down to 13500 if you so desire to take a long position. This should be good for at least a retracement rally because coffee has dropped to hart the last couple of trading sessions.
SUGAR: Sugar also dropped along with most of the other softs following through from Thursday’s reversal type action. There is little support down to the 1300 area.
INTEREST RATES 07/08
Higher closes for the eurodollars, bonds and notes. New recent high for the bonds and buy signals for the eurodollars and notes.
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.