What’s Up, What’s Down: Drop in Gold Futures
Comments for Monday, December 7, 2009
Looking Ahead to Today by Reflecting Back at Friday’s Price Action
METALS:
Lower to sharply lower close last Friday for copper, gold, silver and platinum. All of the metals continue to look strong overall but were hurt by today’s action except for copper which did make a new recent high before settling lower. Gold silver and platinum made very weak closes off the action of the dollar. Silver and platinum are in support areas at this time but Monday could be a critical day for all of the metals.
GRAINS:
Higher for settlements for rough rice, soybeans, soy meal and soy oil while lower for oats, corn, Minneapolis, Kansas city and Chicago wheat. All of the wheat continues to look higher overall after closing slightly lower to lower while still BULL TRIANGLES although one sharp down day could change the technicals dramatically because the rise has been so gradual. Corn settled lower again mainly due to bean/ corn spreading today along with a widening cash basis caused by sluggish demand. A delay in the decision to possibly increase ethanol in gas back to next June has been an underlying reason lately for the selloff since buyers are holding back for, hopefully, lower prices causing a self fulfilled prophecy. We don’t know yet if this will keep a cap on the corn since the dollar and oil prices are such strong influences on corn prices. The December corn closing below 400 was not good for the bulls but a close below 400 in the March contract could prove to be more significant at this time. Rice exploded to a new CONTRACT HIGH AND CLOSE holding its gains this time. Oats made its lowest low since October 27th before rallying to settle slightly lower. Almost, but not quite, giving me a sell signal. As you can see oats have been selling off since early November. The bean complex closed very weak but the beans, meal and oil are in uptrends like the rest of the grains. However, all are approaching critical areas to hold.
ENERGIES:
Higher for the crude Friday while lower for the crude and heating oil along with the rbob. The crude, heat and rbob have been unable to penetrate crucial areas to turn these markets higher as their trend continues lower since October. Gas closed higher still in a very strong down-trend overall.
See the balance of my morning comments, including the Metals, Softs, Energies and Grains, at my website. For my complete coverage, visit my commentary page at www.markethead.com.
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. If you would like a free booklet explaining the charts mentioned above, email Rick at ralexander@zaner.com.
The information in this Report and the opinions expressed are subject to change without notice. Neither the information nor any opinion expressed constitutes a solicitation by Rick Alexander or the Zaner Group of the purchase or sale of any futures or options. Futures and options trading is speculative in nature and involves risks. Spread trading is not necessarily less risky than outright positions. Futures and options trading is not suitable for all investors.