Energy: Crude will finish about in the middle of the $4 trading range we experienced this week. After challenging the trend line the last two days, bulls are trying to make a case for a bounce but I am still looking for a trade under $90 in the coming weeks. RBOB finished the week strong with a 2.3% jump today lifting prices back just under $3/gallon in October. $2.70 remains my target in the coming weeks. Heating oil bounced off its eight-day MA to close at four-month highs just under $3.20. $2.90 remains my target and I do not see the products or crude able to hold onto these gains next week. Natural gas is nearly 8% off levels seen mid-week as prices are trading back above their 18-day MA. Prices will likely bounce from here lifting October close to $3 in my opinion.
Stock Indices: Stocks traded lower for the second week in a row, but as of this post, prices were able to hold key pivot levels, above 1400 in the S&P and 1300 in the Dow. All things considered, it's impressive stocks were able to hold near their highs but my stance remains a correction is upon us. My targets are 1350 and 12700 in the coming weeks ... trade accordingly.
Metals: Gold managed to pick up 2.25% to close out the week just under $1700/ounce near five-month highs. The 200-day MA supported all week and acted as a launching pad today. I would still not rule out a trade near $1635 before we see much higher prices. Silver ended the week on a surge of 4.4% higher with prices completing a 50% Fibonacci retracement at their highs. The 200-day MA supported this metal as well. $30.50 is support while upside should be capped at $33 in the short run.
Softs: Cocoa jumped nearly 10% this week, far exceeding my expectations, but I think the easy money has been made on longs. As long as October sugar hovers around the 20-cent level, it can be accumulated as I expect a bounce in the coming weeks. The June lows will need to hold for me to remain long. Cotton gained for the third consecutive session and though I don't expect much upside, the 100-day MA in December will serve as the pivot point; at 75.25. Coffee ends the week about where it started the week near its August lows. There is no need to trade coffee until we get a bounce, which I would look to sell ... stay tuned.
Treasuries: 30-year bonds have advanced 4% in the last two weeks completing a 61.8% Fibonacci retracement as of today. Probing shorts is back on my radar if we see more upside into next week. On a percent basis, 10-year notes have only moved about half as much but they too completed a 61.8% retracement lifting September near 135'00. Same advice..I may explore shorts next week ... stay tuned.
Livestock: Live cattle should continue to grind higher. Use the 20-day MA as support with an upside target of $127.00. Feeder cattle closed near their highs on the week and should see further appreciation to come as well. If September can take out $147.00, do not rule out $150.00. After two painful weeks, lean hogs were able to squeeze out a small victory gaining slightly. I feel a bounce could play out in the coming weeks thinking October can get back near 77.00.
Grains: $8/bushel continues to serve as magnet to prices in December corn. Establish bearish trades with stops just above the highs this week at the 9- and 20-day MAs and look to add to the trade on a breakdown. $7/7.10 remains my target. In my opinion, soybeans have the most explosive potential in ags so wait for signs of a top before gaining bearish exposure. A close under $17 in November would be a great start, and the current price is $17.56. Wheat ended the week back under $9/bushel, which appears to be the pivot point in the December contact. As long as prices remain under $9.20, you can trade from the short side in my opinion. My target is $8.30.
Currencies: The dollar index lost 0.60% to trade at 3 ½ month lows filling a gap in the chart from mid-May. If prices can hold 81.00 into next week, I'd expect a bounce from here. The yen can be bought with stops under the 20-day MA, about $750 of risk per contract. Fade a rally in the aussie that approaches 1.0450.
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.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.