What’s Up, What’s Down: Dollar Sharply Up, All Metals Down
Comments for Friday, May 2 (reflecting back at Thursday’s price action)
ENERGIES:
Lower to sharply lower closes across the board. All of the energies look toppy but I only have a sell signal in the heating oil although crude oil and the rbob also could be sold on sharp rallies. The natural gas technical formation looks much cleaner forming a possible top.
CURRENCIES:
Sharply higher close for the dollar index and lower to sharply lower closes for the Japanese Yen, British Pound, Canadian Dollar, Euro Fx, Swiss Franc and Aussie Dollar. The euro now has given me a sell signal joining the franc and yen which all look to continue lower. The pound continues in a sideways pattern looking like it’s trying to bottom out.
The Aussie Dollar still acts like it will test its highs and technically looks the best.
The Canadian Dollar has been slowly making higher lows since March 31st but its possible bottoming was hurt by today’s action. It has strong resistance over 100 and has been in a sideways market overall since the end of January. The dollar index closed higher giving me a weak buy signal but a buy signal nevertheless.
MEATS:
Lower to sharply lower closes across the board this time. New recent highs and closes for cattle, feeders and hogs. With today’s action I’m removing all buy signals which you should have been in before anyway. June cattle gapped and settled lower but is still in potential large bottoming formation. Feeder cattle were unable to hold 107.50 making this market susceptible to retracing down to the 106.25 area. Hogs are now in a support area needing to hold the 70.00 area basis the June contract. This market is also forming a possible huge bottom.
Bellies are still in what looks like a down channel while trying to form a bottom overall.
METALS:
Copper and platinum settled sharply lower while gold and silver closed lower. All of the metals made recent lows and closes. Copper has now given me a sell signal to go along with the rest of the metals.
SOFTS
LUMBER: Lumber settled lower again following through from Wednesday’s sharply lower close. Lumber still could be forming a possible bottom but acts like it will test its lows.
ORANGE JUICE: Orange juice closed lower again but still has very strong support underneath and should work its way higher overall.
COCOA: Cocoa closed sharply lower ending any buy signals and whereby longs should have liquidated below 2725.
COTTON: Cotton settled unchanged to lower but making its lowest low since last year again this time givng me a sell signal.
COFFEE: Coffee had its lowest low and close since last November and more importantly settling below 13,000 basis the July contract. There is nothing but resistance all the way up to 14000 for this market.
SUGAR: Sugar had its lowest low and close since last December looking very weak.
INTEREST RATES:
Higher closes for the eurodollars and bonds while lower for the notes. All of the financials continue to look lower overall but the bonds and eurodollars are trying to form bottoms at this time. The bonds seem to be forming a possible bottom at this time.
INDICIES:
Reports released today: Unemployment, Factory Orders. Sharply higher closes across the board. All of the indices though continue to look higher overall making new recent highs and closes across the board.
GRAINS:
Sharply higher corn, higher for oats, sharply lower for rough rice, soybeans, bean meal and bean oil while lower for Minneapolis, Kansas City and Chicago wheat. New recent lows and closes for all wheat as they continue downward but all are still in support areas. Corn settled higher still looking like it will test its highs. Oats rallied to close 19 1/2 cents higher easily settling over 400 basis the July contract. The next objective would now be around the 425 area since oats are turning back higher especially if it can take out 413 which was the last high. Rough continued its ‘free fall’ settling 115 1/2 cents lower because of continued expanded limits. The next support area is around 200 basis the July contract. The bean complex also closed sharply lower continuing its downtrend for beans, meal and oil.
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.