Energy: Crude oil will finish lower this week for the first time in four weeks. Prices failed to make their way above $98, and will close out the week at the 8 day MA. Next week, look for a break lower, my targets remain $94, followed by $90 in October. RBOB broke 1.6% to end the week, just above the 8 day MA. Let's assume an interim high was established -- a 38.2% Fibonacci retracement drags October futures under $2.70/gallon. A doji star yesterday in heating oil, followed by a mild drop today, as signs also point towards lower trade. A break of the 8 day MA just under $3.11 would be needed to confirm. I expect prices in both distillates to be under $3/gallon next week…trade accordingly. Natural gas lost nearly 4% today, as prices may settle under their 100 day MA. Stops should be just under today's lows. On a breach of that level, expect $2.50 to come into play in October.
Stock Indices: For the first time in seven weeks, stocks finished lower. Both the Dow and S&P 500 were able to retake their 20 day MAs, but failed to get above their 9 day MAs. I'm operating under the influence that an interim high formed this week, so until a new high is made, my suggestion would be to trade from the short side in the market.
Metals: On the week, gold will finish up 3.3%, closing nearly $15 above its 200 day MA. This puts gold near four month highs, and 9% from its May lows. Above this week's highs, next resistance is at $1710, with support seen at $1645. Silver has been in the green seven out of the last eight sessions, picking up better than $3/ounce in that time frame. Support is seen at $29.80 in December, with resistance just above $32.
Softs: The first losing week in cocoa in six weeks. As I've said, I'm looking for a trade back down to the up sloping trend line around 2350 in September. Sugar is within 1.5% of its lowest prices of 2012, closing the week under 20 cents/lb. Aggressive traders willing to stay long could be scaling into bullish trades until new lows are established. December cotton failed to stay above its 100 day MA, with an about face in action mid week. Aggressive traders could get short with stops just above the recent highs, with a target of 70 cents. Coffee's 5 cent trading range is not allowing long or short trades. Investors should step aside.
Treasuries: 30-year bonds traded back above their 9 day MA, closing the week out over 3 basis points off their lows. More upside is anticipated into next week. 10-year notes also pared losses, picking up 1.5 basis points to trade back above their 9 day MA. Like 30-year bonds, I will explore bearish trade from higher levels.
Livestock: Live cattle finished lower for the second consecutive week. Prices have competed a 38.2% Fibonacci retracement, but further downside should drag October closer to $122.00. Feeder cattle treaded water, closing virtually unchanged on the week. No clear trade direction. Lean hogs continued to fall apart to end the week down 5%. Mtd prices are lower by 10% in the October contract with no end in sight.
Grains: Corn finished 30 cents off its intra-week highs, but was able to hold onto the $8 level. I'm in the camp that if we cannot take out $8.40 on the upside, we will see a sizable break in the coming weeks. A 38.2% Fibonacci break puts December just over $7/bushel. Moving forward, bad weather should play a larger role in soybeans than in corn because of the crop cycle. Soybeans finished higher, just off its highs. As long as $16.90 holds in November, the bulls remain in the driver's seat. $9/25-9.30 has acted as solid resistance in December wheat going on the last four weeks, and this week was no different. Prices should break lower, but expect corn and soybeans to continue to be the leaders on direction. That means wheat will not fall apart if the other Ags can hold it together.
Currencies: On the weekly chart, the dollar index will close below the 20 day MA for the first time since the first week of May. On the daily chart, prices have completed a 50% Fib retracement, but more depreciation looks likely. If the commodity currencies remain under their 20 day MAs, shorts can be re-established.
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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.