What’s Up, What’s Down: Crude Oil Up, Copper Down, Hogs Down
Comments for Tuesday, June 3 (reflecting back at Monday’s price action)
ENERGIES:
Higher closes for crude and heating oil along with the RBOB and natural gas. The crude and heat are still bullish overall but with potential topping formations. However the RBOB and natural gas at the moment look like they’re going to test their contract highs.
CURRENCIES:
Higher closes for the Swiss Franc and Japanese Yen while sharply lower for the British Pound and lower for the Canadian Dollar, Aussie Dollar and dollar index. The euro has been losing some steam with no direction at this while the franc is trying to bottom. Although higher today the yen continues to work gradually lower overall with support around the 9400 area basis the June contract. The Canadian Dollar gave me a sell signal ending its upward bias for the moment. The Aussie Dollar settled higher well off the session’s lows acting like it will test its contract highs. The pound is forming a possible bottom after settling sharply lower bouncing off a resistance area. The dollar is trying to bottom but still is bearish overall.
MEATS:
Lower top sharply lower closes for pork bellies, lean hogs, live and feeder cattle. Cattle still looks ok today although not holding a bull flag but the feeders were really hurt by today’s action. Hogs sold off sharply still holding a critical area (7550 basis the July contract) so far. Bellies settled lower also really in a trading range since the first week in April.
METALS:
Higher closes for silver, gold, and platinum while slightly lower for copper. All of the metals act like they’ll continue to work lower overall with silver, gold and platinum in bear flags. Copper continues to look lower at this time making its lowest low since March. Gold is in a support area but looks lower overall. Silver is in a critical area to hold and platinum is forming a possible top.
SOFTS 06/03
LUMBER: Lumber closed lower for the 4th trading session in a row and is in danger of ruining a nice looking bottom. 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!
ORANGE JUICE: Orange juice settled higher and a close over 110 basis the July contract would help give this market a chance to turn around and rally up to the 120 area..
COCOA: Cocoa settled higher again trading over 2800 basis the July contract but now needing to close over it.
COTTON: Cotton had its lowest low and close since the end of last August again having broken out of a bear pennant to the downside.
COFFEE: Coffee closed sharply lower well off its session’s highs but still chopping around in its sideways pattern since the middle of March trading mostly between 13000 and 14000.
SUGAR: Sugar rallied sharply but sold off to settle in the middle of its trading range today but still higher. Sugar is trying to bottom but still very bearish overall.
INTEREST RATES
Higher closes for the bonds, notes and eurodollars with the notes leading the way. The eurodollars are still in a consolidation pattern and shouldn’t be traded until we see a good breakout in either direction. The bonds and notes are still bearish with heavy resistance overhead.
INDICES
Reports Today: Factory Orders. Sharply lower closes for the cash and Dow along with the S&P’s and Nasdaq while lower for the Nikkei. The S&P’s look heavy but the Nasdaq and Nikkei still act like they’re going to test their recent highs. The Dow still looks the weakest.
GRAINS
Today we had a nice mixed bag of closes. A sharply higher settlement for corn while higher for Kansas City and Chicago wheat along with soybeans, meal and soyoil. Sharply lower for rough rice along with lower for Minneapolis wheat and oats. Overall the wheat continues to look lower with only Minneapolis showing some signs of possible bottoming action but has flattened out. Corn settled sharply higher making its highest high and close in 14 trading days possibly ending its downward retracement. Oats settled lower still needing to hold the critical 375 area.
Oats have been moving lower since the first week in May. Rough rice settled sharply lower and is in a bear pennant looking very weak overall and needing to hold the 180 area basis the July contract. The bean complex settled sharply lower but still holding up overall. However, the beans and meal are near critical areas to hold and the bean oil is in a good support area. Bean oil needs to hold the 600 area. However, the entire bean complex has been in a consolidation mode since basically March.
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.