As a trader I am looking for Santa to bring me a better market … a more decisive trend, a clear buy or sell signal, more certainty … any or all of these I welcome with open arms.
Crude closed lower this week, making it three out of the last four weeks. We’re operating under the influence that $101-102 will act as stiff resistance and prices will find their way to $93 in the coming weeks. Natural gas … the slump continues with a new low today giving up just over 3.5%. Some clients own a few months out but are feeling the heat. While we expect a bounce in the near future we wil be forced to cut losses if the depreciation continues.
Equities finished higher near the top of the recent trading range. As long as prices fail to make it to higher ground we likely are starting to roll over. 1300 in the S&P and 12300 in Dow should continue to act as resistance. Treasuries remain dicey going back and for the between buy and sell … stand clear for now.
The sideways action continues in both gold and silver with prices ending the week near the lower end of the recent trading ranges. The 10 day MA is capping further upside in gold while the 50 day MA acts as resistance in silver. We’ve been jumping back and forth from bullish to bearish but right now we say sidelines or short as our objective in gold is the low $1600′s and near $29 in silver … trade accordingly.
Some clients took their loss in the Yen today as we were unable to break back to the intervention levels from week’s prior. There are no new trade recommendations in forex as we’re getting mixed signals in most pairs.
Lumber picked up 3% but all other softs were lower with cocoa and sugar hit the hardest, losing 4%. Cocoa is lower by 30% in the last five weeks … not the right falling knife to catch but we’ve advised clients to step in with small positions. Being we’re oversold on both daily and weekly charts we should be close to a turning point. Still waiting for a higher short entry in Euro-dollars which may be coming as we’re approaching overbought levels.
For the most part grains finished lower today on the heels of the USDA report with soybeans getting hit the hardest down 2.25%. We’re far from bullish but expect grains to remain depressed with minimal upside in the coming weeks. Live cattle posted a six month low closing nearly 1% lower today. It has been a bloodbath of late with prices down 5% in the last two weeks. Momentum should carry prices lower yet … trade accordingly. The pressure remains on lean hogs as well, giving up 1% to end the week near two month lows. Further downside should come immediately, in my opinion.
Risk disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.