What’s Up, What’s Down: Rice Sharply Up, Metals Sharply Down
Comments for Thursday, April 24 (reflecting back at Wednesday’s price action).
ENERGIES
EIA Natural Gas Storage is released today. Higher closes across the board. New contract highs and closes for the RBOB and natural gas while the crude and heating oil are in bull pennant formations. All of the energies continue to look higher.
CURRENCIES
Higher closes for the Aussie Dollar and dollar index while lower for the Euro Fx, Swiss Franc, Japanese Yen, British Pound and Canadian Dollar. The euro continues to look higher in a bull pennant while the franc continues consolidating in a bull market basically trading between 98 and 100. However, the franc is now looking a little toppy. The yen settled lower starting to break out of a bear flag to the downside. The pound also settled lower and is still trying to bottom in while in a bear market.
The Aussie Dollar made a new contract high and close once again. The Canadian Dollar settled lower again and has strong resistance over 100. It has been in a sideways market overall since the end of January. The dollar index closed sharply higher and is now forming a possible bottom.
MEATS
Higher closes across the board. Cattle should continue higher at this time but does have strong resistance over 93.75. Feeders have 2 gaps below but continue to look higher while forming a very large possible bottom at this time. Hogs gapped to a new recent high and close touching off a very large buy signal after double bottoming at 72.80 (basis the June contract).
Its objective now is near the 82.00 level. Hogs also have an island reversal in place. Bellies also settled higher but lagging behind at this time. Still the bellies should continue higher and are also forming a possible large bottom. Bellies also still have an island reversal at the lows.
METALS
Lower to sharply lower closes across the board. 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 which continues to look lower overall while still in a consolidation area. A key price to hold is $17.00 basis the May contract. Gold closed lower needing to hold 900 basis the June contract. A very large possible top has been forming since January. Platinum has been consolidating and could go in either direction but does feel heavy to me. Stand aside in this market for now and watch for a breakout in either direction first.
SOFTS
LUMBER: NEW HOME SALES. New contract lows and closes for lumber ahead of the new home sales report. What’s left to say about a very bearish market?
ORANGE JUICE: Orange juice settled sharply higher and, once again, is forming a possible bottom. Orange juice has been in a consolidation mode for a couple of months but is now at the higher end of its trading range. This market is still bearish long term.
COCOA: Cocoa had its highest high and close since the middle of March. Our next objective at 2800 is now very close.
COTTON: Cotton Consumption: Cotton settled lower but is still in a good support area that it needs to hold. Cotton is forming a possible large top and there still is an Island Reversal in the May contract.
COFFEE: Coffee closed mixed still in the middle of a month-long consolidation area. The July contract needs to close over 14000 again and stay above 13000.
SUGAR: Sugar settled 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.
INTEREST RATES
The Eurodollars closed higher while the bonds and notes settled lower. The bonds and notes started out strong but when the Dow rallied they sold off to settle slightly lower. However there are no changes technically. All of the financials continue to look lower overall.
INDICES
Today’s economic reports: Jobless Claims, New Home Sales, Advanced Durable Goods. Higher closes for the cash and Dow futures along with the NASDAQ and Nikkei while lower for the S&Ps. All of the indices are acting like they will continue moving higher overall. The Island Reversal for the Nikkei is still in place.
GRAINS
Export Sales report released today. Rough rice closed sharply higher while higher for bean oil. Sharply lower closes for Minneapolis, Kansas City and Chicago wheat while lower for soybeans, soymeal, corn, oats. There is no support until the 100 area for Minneapolis wheat, which didn’t hold its double bottom. Of course it already had a nice rally off the 1150 bottom in the May contract.
All of the wheat continue to look lower overall unable to hold their support areas. Corn closed lower this time acting very choppy which usually happens at tops and bottoms. Of course this has been an unusual couple of years with choppy markets almost becoming the norm.
However, there still is a possible top forming while good support under 575 basis the May contract. Oats settled lower and needs to close over 400 to turn this market higher. Its chart pattern is looking ‘heavy’ at this time. Rough rice made a new contract high and close which tells the story for this market which has never seen prices this high before. The beans and meal settled lower while the bean oil closed higher. However, the bean complex is still close to buy signals
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.