What’s Up, What’s Down: Crude Oil Sharply Up, Same for Heating Oil, RBOB, and Natural Gas
(Looking Ahead to Today By Reflecting back at Wednesday’s price action)
ENERGIES:
Reports Today: EIA Gas Storage. Sharply higher closes this time for the crude and heating oil along with the RBOB and natural gas. The heating oil made a new contract high close and look like they’ll test their highs along with the crude oil, RBOB and natural gas.
CURRENCIES:
Higher for the British Pound, Euro Fx, Swiss Franc, Japanese Yen, Canadian Dollar and Aussie Dollar while lower for the dollar index. The euro has been in a sideways pattern since the beginning of May now trading around the middle of the range. The euro is tough to call right now but is potentially forming a top while consolidating. The franc has also settled into a sideways pattern and, like the euros, has a gradual downward bias overall The yen has been working lower since its highs back on March 17th now making a new low since last January before settling higher in minor reversal type action. The Canadian Dollar settled higher as expected after Tuesday’s reversal type action but still is bearish overall. This looks like reversal type action and should be higher on
Wednesday. The Aussie Dollar also settled higher but is in a bear pennant looking lower. The pound also closed higher hanging on to a possible bottoming formation in an overall bear market. The dollar obviously closed lower but still close to a buy signal.
INTEREST RATES:
Higher closes for the eurodollars, bonds and notes. The eurodollars continue to look bearish along with the notes and bonds with the euros now in a bear flag.
INDICES:
Reports Today: Business Inventories, Jobless Claims, Retail Sales. Sharply lower closes for the cash and dow futures along with the S&P’s and Nasdaq while lower for the Nikkei. The cash and dow futures along with the S&P’s still look lower overall and now I have a sell signal for the Nasdaq while the Nikkei is losing steam but still holding overall.
GRAINS
Reports Today – Export Sales: Limit up closes for Minneapolis, Kansas City and Chicago wheat along with corn, soybeans, soymeal and oats while sharply higher for rough rice and bean oil. Minneapolis has been in a sideways pattern but at least eliminating its minor bias to the downside. Corn made a new all-time contract high and close for the 5th day in a row with no end in sight so far. Oats are now turning back higher but still in roughly a 50 cent trading range since the beginning of April and need to close over 425 basis the July contract unless I get a different type of formation.
Rough rice settled sharply higher with and expanded daily trying to form a bottom. Soybeans made a new recent high before selling off to close a few cents lower. Beans and bean oil made new recent highs since March and meal made a new contract high and close.
MEATS:
Higher to sharply higher closes for live cattle, higher for pork bellies while unchanged to higher for lean hogs. Cattle had a huge trading range today making a new contract high but settling back to midrange at the close. This is a very bullish market but I don’t know what kind of affect today’s action will have in at least the short term. Feeders closed sharply lower due to grain prices closing limit up(sharply higher). The next support area for the August contract is around 10750. Hogs made a new recent low before settling higher slightly higher in the July contract but is in a bear pennant looking very weak with little support below. Bellies also closed higher breaking out of a bear pennant to the upside setting up a possible retracement to the 7500 area basis the July contract
SOFTS 06/12
LUMBER:Mixed closes for lumber today still holding its lows trying to base. There is heavy support down to the 240 area basis the July contract. A close over 250 basis the July contract would be nice and above 260 look awfully good! Lumber has been basing since April but is now closing in on a critical area(240-July) to hold.
ORANGE JUICE: Orange juice closed lower and still has a double topped at 11700 basis the July contract but is in a bull pennant and test the 12000 area.
COCOA: Cocoa made a new recent high acting like it will test contract highs.
COTTON: Cotton closed strong with good resistance over 7000 area basis the July contract. This is still a bear market but now is forming a possible bottom.
COFFEE: Coffee closed lower this time in a continuing choppy market. This market is still in a sideways pattern since the middle of March trading mosly between 13000 and 14000 basis the July contract.
SUGAR: Sugar settled sharply higher making its highest high and close in 2 weeks. Now sugar is forming a possible bottom after today’s action but still long term bearish.
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.