What’s Up, What’s Down: Higher Energies, Lower Dollar Index

Comments for Tuesday May 5, 2009


Higher for the Canadian Dollar, British Pound, Aussie Dollar, Swiss Franc, Euro Fx and Japanese Yen while, conversely, lower for the U.S. Dollar Index. The euro and franc are both forming potential bottoms and, while both are closer to buy signals, I still don’t have them. Therefore, I would stand aside until I get my buy signals or they turn back down. The yen closed higher this time but is still in a downtrend overall, with lower lows and lower highs. The Canadian Dollar closed higher nine out of the last ten trading sessions including today making another new recent high and close The pound also settled higher again trading over15000 area basis the June contract before settling at 14961. It hasn’t closed over 15000 since January 9th which psychology would be extremely bullish.

The Aussie Dollar closed higher again making its highest close since last October once again continuing to be the strongest of all the currencies overall. The dollar index settled lower in narrow trading needing to hold the 8400 area. The last two weeks of action has hurt the dollar which is now poised to continue its downtrend unless it hold the area just mentioned as it made a recent low and close. I am holding Buy Signals for the Canadian & Aussie Dollar and British Pound. Please feel free to contact me for details.

U.S. Dollar Chart


Higher for the eurodollars, notes and bonds this time. The eurodollar still has a minor double top but is also in the smallest possible bull pennant in a bull market. The bonds settled higher now in a small bear pennant looking very weak. The notes also are in a small bear pennant but still holding the lower end(12000) of a key support area which means stand aside at this time. I am maintaining my Sell Signal for Bond futures.

10-Year T-Note Chart


Higher for crude oil and heating oil along with the rbob and natural gas again. Crude had a strong close again but still in a resistance area. It needs to take out and close above 5750 basis the July contract to turn this market higher. It does look like that is going to happen but I’ve learned over the years not to assume anything! Heating oil made its highest high and close in 2 weeks again and has been basing overall since the middle of February but, on the other hand, is in good resistance up to 14900 basis the June contract along with trending down since March 24th. Therefore stand aside in what has been a choppy market along with the other energies. The rbob closed sharply higher breaking out of its consolidation area to its highest high and close since the middle of last November also giving me a buy signal. Natural gas had a strong close again still in a major downtrend along with also being in a resistance area.

Gasoline Futures Chart


Higher closes for soybeans, soymeal and soyoil while lower for Minneapolis, Kansas City and  Chicago wheat along with corn, rough rice and oats. It’s not surprising the wheat retraced after such strong action on Friday. Actually, the lows of KC and Chicago wheat were good places to take long positions since that were the beginning of their support areas. Corn also closed lower but has a double bottom at 370 basis the July contract that can’t be ignored. Corn has been held up by the rest of the grain complex and, although I do have buy signal, needs to close over 418.

Rice made a recent high before selling off to close lower in minor reversal type action. Rice has been in a minor uptrend since the middle of March really needing to close over 135 basis the July contract to be worth looking at. Oats have been basing since the middle of February but really going nowhere since the middle of February. Stand aside for now. The bean complex settled strong again with beans, meal and oil all making recent highs and closes again looking very bullish. In my opinion the beans are the one grain that should be in a bull market because of the acreage taken away for corn and wheat over the last couple of years. I am bullish on Wheat, Corn and the Soy Complex. You can call or email me to learn where I am placing Buy Signals and related details.

Soybean Futures Chart

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.