What’s up, What’s Down: Rice Sharply Down, Crude Oil Down, Dollar Up
Comments for Friday, April 25 (reflecting back at Thursday’s price action)
ENERGIES
A higher close for natural gas while lower for crude oil, heating oil and the RBOB. New contract high and close for natural gas again while the heating oil is now in a bull flag. All of the energies continue to look higher.
CURRENCIES
The euro was hurt by yesterday’s action and I got a sell signal for the Swiss Franc after making its lowest low and close since the first week in March. The yen also settled lower making its lowest close since the last week in February. The pound also settled lower still trying to bottom while in a bear market. The Aussie Dollar closed lower after 3 consecutive contract highs and now is in a bull flag. The Canadian Dollar settled higher this time but has strong resistance over 100. It has been in a sideways market overall since the end of January. The dollar index closed sharply higher again and is forming a possible bottom.
MEATS
Feeder cattle and pork bellies settled higher while the live cattle and lean hogs closed lower. Higher closes across the board. Cattle should continue higher at this time but does have strong resistance over 93.75. A new recent high and close for feeders giving me a buy signal. Feeders still have 2 gaps below but continue to look higher. Hogs closed lower filling yesterday’s gap. The hogs look very strong with its next resistance over 77.50 basis the June contract. They also have an island reversal in place. Bellies also settled higher again lagging behind the other meats a little but still should continue higher. Bellies are also forming a possible larger bottoming formation. An island reversal at the lows is still in place.
METALS
Lower to sharply lower closes across the board one again. Copper is still bullish overall while in a consolidating mode over the last couple of weeks. The Key Reversal for silver is still in place closing sharply lower below the support that I’ve been talking about. The next stop should be in the 16.00 area (basis the May contract) after not holding 17.00. Gold didn’t hold 900 after closing sharply lower (2nd lowest close since the beginning of January) not holding the all important 900 (basis the June contract). Now I have a sell signal which was a long time coming. Platinum also settled lower and has been consolidating since the middle of March. Stand aside in this market for now and watch for a breakout in either direction first. Of course platinum is now leaning towards the downside.
SOFTS
LUMBER: Lumber had strong closes today following the new home sales report but still look very bearish overall. Let’s see if there is a good follow through to give this market some new life.
ORANGE JUICE: Orange juice settled lower but is forming a nice looking bottom so far. Orange juice has been in a consolidation mode for a couple of months but is now at the higher end of its trading range.
COCOA: Cocoa had its highest high and close since the middle of March. Our next objective at 2800 is now very close.
COTTON: Cotton had its lowest close since last December settling below a critcal support area. Cotton is forming a possible large top and there still is an Island Reversal in the May contract.
COFFEE: Coffee did not have a good close settling down to its lowest close since early last November. The July contract needs to close over 14000 again and stay above 13000. Obviously the 13000 area is is jeopardy at the present time. There is strong resistance between 13500 and 14000.
SUGAR: Sugar settled sharply lower acting like it will test the 1200 area basis the July contract. However, if you are bullish this is the area to take your shot against closing below 1200.
INTEREST RATES
There’s a higher close for the eurodollars while the bonds and notes settled lower again. There are no changes technically. All of the financials continue to look lower overall.
INDICES
Higher closes across the board giving me buy signals in the Dow, Nasdaq and S&P’s. All of the indices are acting like they will continue moving higher overall. The Island Reversal for the Nikkei is still in place.
GRAINS
A higher close for oats while sharply lower for rough rice. Also there were lower closes for corn, Kansas City and Chicago wheat along with soybeans. meal and bean oil. There is no support until the 100 area for Minneapolis wheat. All of the wheat continue to look lower overall unable to hold their support areas this week. Corn closed lower again with good support under 575 basis the May contract but also close to a sell signal. Oats settled higher but needs to close over 400 to turn this market higher. Its chart pattern is still looking ‘heavy’ overall at this time. Rough rice made a key reversal settling down the 50 cent daily limit! The bean complex closed lower never quite giving me buy signals. All are still bullish overall. However, I’m starting to get the feeling the grain complex is going to see a downward correction soon. The meal seems to be the weak link overall technically 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.