What’s Up, What’s Down: Feeder Cattle Higher, Lower Closes for Metals
Comments for Monday, August 11
Looking Ahead to Today By Reflecting back at Friday’s price action
MEATS:
Limit up (300 points) for bellies, higher for feeder cattle while lower for live cattle and lean hogs. The October cattle now looks like it will retrace down to the 10500 area, while the December contract made a new recent low and close. I prefer to stand aside for now and look for better markets to trade at this time.
The October feeders settled slightly higher still in the heart of a strong support area but, as I’ve been saying, this has been the weakest bull market I’ve seen in a while, against falling corn (feed) prices. The October hog contract made a new contract high and close and again, while the December contract settled over 100 points higher again. Hogs (December contract) are still in basically a sideways pattern for several months but showing some signs of turning higher. Bellies settled limit bid in the February contract now showing possible bottoming signs. Still bellies are in a downtrend until we see more action higher.
METALS:
Lower for platinum, copper, gold and sharply lower for silver. New recent lows and closes for copper, god and silver with platinum in a bear pennant. Copper settled slightly lower looking very bearish at this time. Gold and silver were unable to hold critical areas.
SOFTS
LUMBER: Mixed closes for this market but forming a secondary larger bottom. Long term lumber is still in a downtrend but has given me a buy signal. A close over 260 basis the September contract would be pivotal.
COCOA: Cocoa settled sharply lower making a recent low and close dropping down to the 2700 basis the December contract, as we thought would happen. Still as long as cocoa can hold this area shorts should tighten stops, lighten up or liquidate positions.
SUGAR: This market settled lower again following through from Thursday’s reversal type action testing the 1350 area basis the October contract, as we anticipated. Cocoa is also forming a possible larger bottom but needing to hold the 1350 area.
COTTON: Cotton closed higher in a bear pennant and continuing to look lower.
ORANGE JUICE: OJ settled lower in a bear pennant, looking very bearish overall.
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.