Energy: The 38.2% Fib level held the last two days in crude oil as prices ended 1% higher today. If that support level holds expect choppy action moving forward. I cannot imagine much traction in this environment. What looked like stiff resistance in RBOB was penetrated today with the 2.15% appreciation lifting prices above the 100 day MA for the first time since early May. Those who took short trades should have been stopped out at a loss on today's action. Heating oil's gain was much less at 0.40% closing just under the 8 day MA. They say a rising tide will lift all boats but heating oil will likely continue to lag. Natural gas has traded lower the last two sessions but prices are still above the 8 day MA. I've been expecting a dip and have been wrong to date but when it comes I think we get a quick 30 - 45 cent drop so trade accordingly.
Stock Indices: Equities have failed to hold onto any gains this week as prices appear to be retracing. I have no positions on for clients here but I would be mildly bullish as long as prices remain above 1,355 in the S&P and 12,750 on the Dow. Once those pivot points are broken I would shift to bearish.
Metals: December gold traded down by 0.50% today temporarily trading under $1,600/ounce. That level is the bullish/bearish line in my opinion. Until we get above $1625 or below $1,580 on this contract expect a sloppy trade. A close above or below those levels would dictate the next leg in my opinion. Silver gave up 1.35% as prices make their way toward $27/ounce. As long as $26 holds I would be long ... the problem is that it is a big move from current levels so keep your size small if trying to find a long entry here.
Softs: Cocoa gained for the fifth straight session lifting prices to 4 ½ month highs. From my perspective another 3% appreciation should play out. Sugar has given up 6% but the 50 day MA at 21.25 is my target in October would be another 6%. Cotton looks like it wants to break lower but first the 50 day MA will not to break ... which has served as support the last four days. A trade under 70 cents in December should drag prices to 66 cents ... trade accordingly. Orange juice looks weak ... do not rule out a sub $1 trade a level not seen since October 2009. If December coffee breaks the 50 day MA at $169.50 I would suspect $1.60 comes into play.
Treasuries: 30-year bonds broke down today after challenging the 9 day MA and failing to make any headway. I remain bearish as long as that pivot point caps upside. Broken record but same result in 10-year notes after a failed rally prices broke down and we should see lower trade ahead. My favored play is the NOB spread; short 30-year bonds and long 10-year notes.
Livestock: October live cattle held the 9 day MA but prices should be moving south. Aggressive traders should gain bearish exposure in cows. Feeder cattle continue to build a solid base as my bias remains up. $1.45 remains my target in futures short term. Lean hogs broke their 20 day MA as prices should trade back to the recent lows. Aggressive traders could have bearish trades on with stops above 80.50 in October.
Grains: December corn traded below but did manage to pare losses closing above its 9 day MA. A close under $7.94 should set an interim top and lead to a trade closer to $7/bushel. Soybeans same story - a lower trade but prices did hold their 9 day MA. A close under $16.13 in November would lead to a trade closer to $15/bushel in my opinion. Those not willing to get short I get it but really what I would stress is lightening up on longs and booking what should be a tidy profit. Wheat broke the 9 day MA yesterday and probed its 20 day MA today. Prices are already 60 cents off their recent highs and I see another 60 cents of declines coming.
Currencies: The dollar picked up nearly 0.60%today to trade back to its 20 day MA. That level at 83.30 in September will serve as a pivot point ... trade accordingly. On a low risk trade forex traders could gain short exposure to commodity currencies with tight stops above the recent highs. FYI this is a reversal of my previous stance.
Risk Disclaimer: The opinions contained herein are for general information only and not tailored to any specific investor's needs or investment goals. Any opinions expressed in this article are as of the date indicated. Trading futures, options and Forex involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results.