What’s Up, What’s Down: Higher for Crude, Lower for Live and Feeder Cattle
Comments for Tuesday, July 29
Looking Ahead to Today By Reflecting back at Monday’s price action
ENERGIES
Higher closes for crude and heating oil along with the rbob and natural gas. All of the energies are in small bear pennants still looking lower over, but, as mentioned before, watch out for sharp retracement rallies. However, I do feel the highs are now in place for quite a while. Natural gas is just plain bearish with little support down to the 8500 area basis the September contract.
CURRENCIES
Higher for the Swiss Franc, Euro Fx, British Pound, Japanese Yen and Aussie Dollar while lower for the Canadian Dollar and dollar index. The euros have been basically trading gradually higher while the francs have been moving sideways since the beginning of May but both trying to form topping formations. The francs are still in a heavy support area and the euros just above one. The yen continues to hold at the lower end of its sideways trading range since early June while in a bear market overall.
The Canadian Dollar, after another lower close (4th in a row), now looks like it’s headed towards the 9700 area basis the September contract. The pound continues to look strong overall but is still in a bear pennant needing to hold last Thursday’s low. The Aussie Dollar settled higher this time still in a support area and, while still in an uptrend overall, is forming a possible top. Higher for the dollar index forming a possible bottom but still bearish long term.
MEATS
Lower for live and feeder cattle along with lean hogs and pork bellies. Cattle still are in a downtrend making their lowest closes in several months along with new recent lows in the August contract. The December contract couldn’t hold the 1075 area with little support until 105. Feeders continue looking lower especially in the October contract, unable to rally off falling corn prices.
Hogs closed lower again, still with a double top in the August contract while the October contract is in a strong resistance area and the December contract has been consolidating, telling me not to take a position in either direction at this time. Bellies reversed in the August contract and has little support down to the 6700 area basis the August contract, while the February contract, although also closing lower, a different market with its own chart pattern. Think of old crop versus new crop.
METALS
Higher for copper, gold, silver and platinum again. Copper gave me a sell signal yesterday but really is not in a good area to sell. Call me for details! Gold is in the mist of forming a possible top while silver is in a strong support area making it difficult to take a position that you can feel comfortable with. Platinum closed higher again but still bearish with slide no discernible support below.
All of the metals, excluding platinum, are in some what bear pennants. Either way, all of the metals should continue working lower overall.
SOFTS
LUMBER: Lumber closed lower, acting like it’s trying to bottom in a very weak market overall.
ORANGE JUICE: Orange juice closed lower for the 5th trading session in a row, needing to hold the 1100 area basis the September contract. There really is nothing underneath 1100. Obviously this is a critical price area to hold.
COCOA: Cocoa settled near its session’s lows with my next objective still being in the 2600 area.
COTTON: Cotton closed lower; still close to a buy signal. This market has been having choppy action over the last 15 trading sessions acting like its trying to bottom while consolidating. A close over 7500 basis the December contract would reverse my sell signal and a close below 7078 would reinforce it.
COFFEE: Coffee settled lower as this market seems to be in the summer doldrums but is still holding a very good support area( 14000 down to 13500 basis the September contract) so far. Really no position should be taken either way at this time but if you must, from the long side. Coffee hasn’t closed below 13500 since early June.
SUGAR: Sugar closed lower still looking lower overall.
GRAINS
Higher settlements for rough rice, oats, corn, soybeans, soymeal and soyoil while lower for Kansas City, Chicago and Minneapolis wheat. All of wheat continues to look lower, still holding their respective support areas. Although at the lower end of the range in critical areas, corn closed higher again but has good resistance right overhead and should go back down and test its recent lows soon, with my next objective, is the 550 area basis the December contract.
Oats also closed higher and has been consolidating over the last week needing to hold the 400 area basis the December contract. Rough rice settled higher again but near the low end of its session’s range, looking very weak overall. Beans, meal and oil closed higher again but continue to look lower 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 (zaner.com) a Chicago-based futures brokerage firm. Email Rick at ralexander@zaner.com or call toll-free (888) 281-4158.