What’s Up, What’s Down: Oil Futures Drop, Dollar On the High End
Comments for Thursday, September 4
Looking Ahead to Today By Reflecting back at Wednesday’s price action
CURRENCIES:
Higher for the Swiss Franc, Japanese Yen, Canadian Dollar and dollar index while lower for the Euro Fx and Aussie Dollar. All of the currencies continue to still look lower overall with the exception of the yen at this time. New recent lows and closes for the euros and Aussie Dollar, recent lows for the francs and Canadian Dollar while the pound made a new contract low and close for the sixth straight trading session in row. The dollar made a recent high and close for the third straight day. The Canadian Dollar and Swiss Franc showed signs of reversal type action for probably the short term. The yen has been slowly bottoming.
FINANCIALS:
Higher for the bonds and notes again but lower for the eurodollars this time. Bonds and notes made new recent highs and closes once again as all of the financials are in up trends.
ENERGIES:
Higher for heating oil, the rbob and natural gas while lower for crude oil. All of the energies continue to be in downtrends with the natural gas making a new contract low before settling slightly higher.
GRAINS:
Higher for Minneapolis, Kansas City and Chicago wheat along with rough rice while lower for corn, oats, soybeans, soymeal and bean oil. Wheat continues to look bearish overall while corn bounced off my first objective of 550 basis the December contract. Although corn looks weak and is in a down trend it still could be forming a possible bottom as long as it holds the 550 area. Oats made a recent low again with little or no support underneath.
Rough rice settled higher this time but still unable to close over 1900 basis the November contract, which is imperative in my opinion to continue higher. Right now no position should be taken.
The bean complex closed sharply lower still needing to take out its recent highs to possibly turn around its downtrends, but that’s not happening at this time since the beans, meal and oil have been making lower highs and lower lows overall so far. Also bean oil is in a critical area to hold.
INDICES:
Higher closes for the cash and Dow futures while lower for the S&P’s and sharply down for the Nasdaq again. Not much change technically, however, the overall trend for the cash and Dow futures along with the S&P’s is basically sideways, until they break out of their consolidation patterns one way or the other. My buy signals are still in place at least for now. The Nasdaq is at the beginning of a very strong support area.
MEATS:
Lower to sharply lower close for live and feeder cattle along with lean hogs and pork bellies. Cattle continue to look very weak overall with a new recent low and close while feeders also look lower and this is with the grains also sliding. Hogs continue to be in a downtrend overall with the December contract making a recent low and close. However those huge overhead gaps continue to scare me so I wouldn’t go short or add on positions at these levels. The risk is too high messing up any money management principles that you may have. Bellies settled sharply lower barely holding its support between 9000-9200.
METALS:
Higher for copper but lower for platinum, gold and silver. All of the metals continue looking lower overall but still are in formations that could turn into buys. However, never assume a signal will happen until it does. That’s a mistake many traders make and have trouble figuring out how to get out of a position that they shouldn’t have taken to begin with.
SOFTS:
LUMBER: Lumber made a new contract low before settling higher. Let’s see if this reversal type action has any follow through because lumber, otherwise, looks extremely bearish overall.
COCOA: Cocoa gapped and settled sharply lower, now needing to hold the 2600 area basis the December contract. If it doesn’t, then the down trend which started at the beginning of July should continue.
SUGAR: Sugar closed lower again for the fifth trading session in a row and is now in a bear pennant.
COTTON: Cotton closed lower still looking very bearish overall.
COFFEE: Coffee also settled lower but is in heavy support. A close over 14500 basis the December contract should mean coffee will test its last high of 15225 but getting there has been a struggle for quite a while. The daily and weekly chart show coffee hasn’t really gone anywhere since April except at the end of June to early July.
ORANGE JUICE: OJ settled unchanged basis the November contract after closing sharply lower on Tuesday and is still in some good support. OJ is in a down trend but not at a good level to take a positions at this time.
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.