What’s Up, What’s Down: Higher Gold Futures, Energies Sharply Lower
Comments for Monday, October 27, 2008
Looking Ahead to Today By Reflecting back at Friday’s price action
MEATS:
Although Friday saw a higher close for lean hogs, the settlement was lower for pork bellies while sharply lower for live and feeder cattle for the second trading session in a row. Cattle and the feeders both made new contract lows and closes with the January feeder contract gapping to settle one tick from down the 300 point daily limit ending a potential bottoming formation.
Hogs continue to look very bearish with those pesky gaps overhead that makes one hesitant at times. I attribute the higher hog close to spreading between hog and live cattle. Bellies gapped to a new contract low but manage to rally enough to avoid a new contract low close. Still bellies are just as bearish as the rest of the meat complex. Call or email me to see just why I am so bearish on livestock futures!
In other markets…
ENERGIES:
Sharply lower closes for crude and heating oil along with the rbob while lower for natural gas. The energies all are in major downtrends with the crude and natural gas making new recent lows and closes while heating oil and the rbob made new contract lows and closes. Opec will try to stem the tide by cutting production but that won’t stop lower energy prices if the world’s economies continue to struggle like they are now.
GRAINS:
Lower closes for soybeans, soymeal, soyoil, Minneapolis, Kansas City and Chicago wheat along with corn,oats and rough rice. The entire wheat complex continues to be in a major downtrend closing lower again with KC and Chicago wheat making recent lows and closes, while Minneapolis is in a small bear pennant. Corn closed sharply lowers unable to hold the 380 area basis the December contract. Corn’s next support is around the 350 area as its downtrend continues. Rice made a recent low and close continuing lower with the rest of the grains overall.
Oats also made a new recent low and close once again. The beans and meal closed higher while the oil settled lower. The bean complex settled lower with the beans all but ending a potential bottoming formation but the meal still in one while bean oil just looks lower like the rest of the grains. Contact me for my Sell Signals in the grains.
METALS:
Higher for gold, sharply lower for copper while lower for silver and platinum. Copper settled lower again making a new contract low and close once again. Gold dropped to another new recent low before having a nice rally to settle higher but still very bearish technically as gold continues to be liquidated around the world for those in need of liquid funds. Silver, however, made a new recent low and close still in a major downtrend and should continue falling further. Finally, platinum settled lower making another new contract low and close.
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.