What’s Up, What’s Down: Natural Gas Down, Pork Bellies Up Sharply
Comments for Thursday, July 10
Looking Ahead to Today By Reflecting back at Wednesday’s price action
MEATS
Higher for live and feeder cattle along with sharply higher for lean hogs and pork bellies. Cattle has good resistance above 10375 and support under 10000 basis the August contract. Overall this is a bull market making higher highs and lows but, at the same time, it has given me a sell signal. Feeders are trying to turn back up after today’s action with the key price being 11325 basis the August contract. Hogs gapped and closed sharply higher now giving me a buy signal. The August hog contract also has a large gap at 7235 basis the August contract and, as we’ve said many times, the meats generally fill 90% of their gaps. Bellies also closed sharply higher but still is very bearish and my sell signal still is okay.
METALS
Higher for silver, copper, gold and platinum. Copper settled higher after making a new recent low first, still in a possible topping formation with support at the 360 area basis the September contract. Platinum continues to look lower but did settle higher today. Gold and silver settled higher both still look bullish overall with good support right underneath.
SOFTS 07/10
LUMBER: Lumber closed lower again but still trying to bottom in what is a bear market.
ORANGE JUICE: Orange juice closed higher with good support under 12500 basis the September contract continuing to look higher overall.
COCOA: Cocoa closed slightly higher but has little support down to 2800 and is in a small bear pennant.
COTTON: Cotton settled higher and is in a bear pennant looking to continue lower overall.
COFFEE: Coffee settled down again and is in a small bear pennant. There is good support from 14000 down to 13500 basis the September contract. For now its bull move is over but can be bought down to 13500 if you so desire to take a long position. This should be good for at least a retracement.
SUGAR: Sugar closed higher but is in a bull triangle looking strong overall. This is still a good looking bull market overall. There is support around the 1300 area and resistance over 1450 basis the October contract.
INTEREST RATES
Higher closes for the eurodollars, bonds and notes once again. All of the financials continue to look higher with the bonds and notes breaking out of bull pennants to the upside.
ENERGIES
Reports Today: EIA GAS STORAGE. Higher for heating oil and the RBOB, mixed for crude oil and lower for natural gas. Crude and heat along with the RBOB, while looking toppy, are in good support areas in overall bullish markets. Natural gas continued its downward slide for the 3rd trading session in a row. Plunged lower again making its lowest low and close since early June potentially ending its upward momentum for now. All of the energies are long term bullish but showing some chinks in their armor.
CURRENCIES
Higher closes for the Swiss Euro Fx and Japanese Yen while unchanged for the Swiss Franc, Canadian Dollar, British Pound, and Aussie Dollar. The euro barely broke out of its bear pennant to the upside still looking higher overall. There is good support from 15600 down to 15400 basis the September contract. The franc settled unchanged gradually working higher since early May but nothing to get excited about. There is good support around the 9600 area. The Canadian Dollar also settled unchanged looking like it’s forming a possible bottom after today’s actions. The yen is still bearish long term and now in its last support area ending its buy signal for now. The Aussie Dollar settled unchanged but should still test its highs. The Aussie Dollar also needs to hold the 9400l. The pound closed unchanged, in heavy support and should work higher. The dollar index higher closed lower this time struggling to find a bottom trading basically between 7200 and 7400 since the middle of March, which some bulls will take as a good sign because, at least for now, the bleeding has stopped
GRAINS
Lower closes for Minneapolis, Kansas City and Chicago wheat along with rough rice, corn and oats while higher for soybeans, soymeal, and bean oil. All of wheat still continue to look lower overall with Minneapolis unable to hold its support around the 900 area basis the September contract and still needing to hold the 845 area. Corn settled lower for the 4th trading session in a row with little support down to the 650-600 area basis the December contract. Oats also closed lower again now forming a possible top with good support under 425 basis the December contract. Rough rice had its lowest close since April 1st giving me a sell signal. Beans, meal and oil closed higher still bullish overall while starting to show some topping signs
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. Email Rick at ralexander@zaner.com or call toll-free (888) 281-4158.