What’s Up, What’s Down: Higher Closes Dollar Index, Low Volume on the Dow and NASDAQ
Comments for Monday, August 4
Looking Ahead to Today By Reflecting back at Friday’s price action
SOFTS: 08/04/08
LUMBER: Closed higher following through from Thursday’s sharply higher close but near its session’s lows well off (590 pts) its highs. Lumber needs to close over 2600 basis the September contract but is showing bottoming type action.
COCOA: This market closed sharply higher and now should test its highs.
SUGAR: Closed higher in the middle of the trading range over 50 points from the high basis the October contract. Now sugar is setting up for a potential buy.
COTTON: Cotton settled sharply lower unable to close over 7500 basis the December contract, which is my critical point at this time.
COFFEE: Highest high and close in 2 weeks settling over 14000 basis the September contract, which I think is a good sign.
CURRENCIES:
Higher close for the Japanese Yen and Dollar index while lower for the Euro Fx, Swiss Franc, Canadian Dollar, British Pound and Aussie Dollar. The euro, franc, yen and Canadian Dollar continue to look lower with the latter three in critical areas to hold. The pound’s uptrend is basically over, forming a possible top at this time while the Aussie Dollar continues it slides needing the hold the 9200 area basis the September contract. The dollar index has formed a bottom and should continue higher now needing to close over 9400 but in good resistance at this time.
FINANCIALS:
Lower for the eurodollars while higher for the bonds and notes. The eurodollars are in a resistance area, starting to turn higher but nothing to get excited about. Bonds and notes are forming possible large bottoms and in neutral areas at this time.
ENERGIES:
Higher closes for crude, rbob and natural gas while lower for heating oil. All of the energies act like their tops are in place and should be sold on sharp rallies unless you are heavily funded or place options. However, even the options are pricey unless you go way out of the money. Then it’s imperative you wait for a good retracement to enter or your chances almost become too slim in most cases, as proven throughout the history of trading options.
GRAINS:
Higher closes for Minneapolis, Kansas City and Chicago wheat while lower for corn, oats, rough rice, soybeans, soymeal and bean oil. All of the wheat still looks lower overall while now in support areas. Corn’s retracement looks over with today’s sharply lower settlement as it heads towards our 550 objective basis the December contract, as we mentioned last week.
Oats also settled sharply lower with its lowest low and close since last March. Rough rice also had its lowest low and close since March with little support below. Sharply lower closes for beans and oil with meal also settling lower. Beans (Nov.) and meal (Dec.) are in critical areas to hold while bean oil had its lowest low and close since the beginning of April in the December contract.
INDICIES:
Lower closes for the cash and dow futures along with S&P’s and the Nikeii, while sharply lower for the Nasdaq. All of the indices are still in downtrends but forming potential bottoms at this time.
MEATS:
Higher for live and feeder cattle, mixed for lean hogs while lower for pork bellies. Cattle have given me a buy signal while feeders made a new contract high and close mostly from the sharply lower corn closes. Hogs also closed higher in the October contract but slightly lower in the December one. Both are close to breaking out of resistance areas to the upside but not quite. Bellies had a poor close in the February contract and are in a critical area to hold while still in a downtrend overall.
METALS:
Lower closes for copper, gold, silver and sharply lower for platinum. Copper is in a critical area hold but looks very weak. Gold also looks lower but is in a strong support area. Silver keeps holding its support but unable to sustain any rallies at this time. Platinum just looks very 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. If you would like a free booklet explaining the charts mentioned above, email Rick at ralexander@zaner.com.