What’s Up, What’s Down: Lower Closes for Crude, Gold and Corn
Comments for Thursday, August 7
Looking Ahead to Today By Reflecting back at Wednesday’s price action
Higher for natural gas while lower closes for crude and heating oil along with the rbob. 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.
Higher closes for Minneapolis wheat, while lower for Kansas City and Chicago wheat; along with oats, rough rice, corn, soybeans, soymeal and bean oil. Minneapolis made a new recent low, Kansas City a recent low and close while Chicago wheat closed in a bear pennant. Also, Kansas City and Chicago are barely hanging on at the bottom of critical support areas. All of the wheat continues looking lower overall.
Corn continued its slide (5th lower session in a row), closing another 17 cents lower heading towards the 500 area basis the December contract. Oats also closed lower but with a much narrower trading range this time but, nevertheless, looking lower overall. Rough rice joined the rest of the grains by making its lowest low and closes since February. Rough rice made a new recent low and close looking very bearish overall. Finally the bean complex continued its downward slide with sharply lower closes.
Higher to sharply higher for lean hogs, higher for pork bellies, mixed to sharply higher for live cattle and lower for feeder cattle. The October cattle contract has given me a buy signal but the December contract made a new recent low before rallying to settle 2 ticks lower. The latter contract should also rally if the October continues higher overall. The October feeder’s bull pennant failed, but feeders are still in a bull market although not a strong one, considering falling corn prices. Hogs are in a similar scenario (cattle) with the October contract making a contract high close looking very strong while the December contract is in a sideways pattern
Higher for platinum and copper while lower for gold and silver. Copper is in a weak bear flag looking very bearish at this time. Its lowest low and close since February again continuing its move lower. Gold made a recent low and close at the lower end of its support area. Silver made a new recent low and a double bottom of the lows of the last two trading sessions. Both metals look lower overall. Platinum closed higher again and now is in a bear flag meaning this market should continue its downwards momentum.
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 firstname.lastname@example.org.