Energy: Sloppy action in Crude oil today, with prices finishing pretty much in line with where they started the session. For the last seven sessions, prices have been in a sideways trading range, and today was no different. I see resistance just above $93, and am still looking for a breakdown in the coming weeks. RBOB lost 1.35% today, trading lower now for the last five consecutive sessions. A settlement under $2.70 in December should lead to a quick move under $2.60 and back to the 100 day MA -- currently at $2.5975. Heating oil traded under its 18 day MA for the first time in two weeks, but support held up. I see the tide shifting and see no solid support until $3.05. Natural gas gained 2.2%, closing near its recent highs, about 10 cents under $4. I may be the minority, but I'm looking for prices to back off. I'm thinking we get one solid sell-off before we build in a winter premium.
Stock Indices:The S&P failed to hold onto its gains, finishing slightly in the red just above 1450. Looking at the price action over the last month, there appears to be a triple top in the making, as all previous attempts to penetrate 1460 have failed. I think it will take confirmation of its short term MA, but a trade lower is still the call. As opposed to picking a top, it is advised to get confirmation, though. Doji star in the daily Dow chart, with prices dancing on the up sloping tend line. The 13500 level in December futures has acted as stiff resistance in recent weeks, and I expect that to continue. A close under 13375 is needed to signal an interim top …trade accordingly.
Metals: Gold lost 0.42%, as prices appear to be taking a breath around the $1750 level. I see resistance at $1760, and the next leg lower should test the 50 day MA at $1719, in my eyes. I've told traders for weeks now not to rule out a trade under $1700/ounce. A bearish engulfing candle in silver today, with prices lower by 1.10%. Prices are off just better than 6% in the last two weeks. $31.75 represents a 38.2% Fibonacci retracement, though $30.75 is my ultimate target, which is the 50% level.
Softs: Cocoa appreciated 2.22% to close above the down sloping trend line that has acted as resistance since the highs in early September. This may sound familiar, as I predicted this in a recent post. From here, I am expecting a tradable bounce that lifts prices to 2550/2600 in December. Sugar is within 1.5% of its low trade this year, but that alone is not a reason to buy. I am waiting for signs of an interim low before advising clients to reestablish bullish trade in March contracts. A 4 1/2 cent trading range in cotton represents a $2250 range. I would have expected more upside follow-through after yesterday's limit close, and prices closed unchanged today. My target is the 200 day MA, just under 2 cents from the settlement, but I am looking for a sell signal from higher ground, and would not be long currently. Coffee lost 1.8%, dragging prices to six week lows as prices are slowly making their way to contract lows, which I do think will happen. Today's close is within 3.25% of those levels reached in mid-June.
Treasuries: In the last three days, prices in 30-year bonds have broken down better than 3 points, dragging prices back near 146'00. I missed this leg -- looking for a higher sales price. We could see prices drift lower to mid-September levels, but I am currently on the sidelines with clients. 10-year notes also exhibited the same pattern, breaking down in recent sessions and trading to one month lows. The path of least resistance is lower in both instruments, but I'll be absent.
Livestock: Live cattle continue to inch higher, gaining four consecutive days as prices are approaching overbought levels. The easy money has been made on longs, as I will be looking for short entries in the coming sessions. The rising tide has lifted feeder cattle prices as well, with January closing over $1.50 the last two days. Resistance that has held the last two months comes in just above this level, so expect limited upside, in my eyes. In a little over five weeks, prices of lean hogs have appreciated 12%, but prices should be met with selling very soon. I see limited upside, but prefer to see a settlement under the 9 day MA before calling a top. That level in December is 78.35.
Grains: December corn closed up just over 2% as prices make their way back to their 50 day MA. That pivot point served as resistance last week and comes in at $7.66. Above the 50 day MA, the next resistance is eyed at $8/bushel. I still think there is risk to the downside, and see support at $7.35. After bouncing off $14.90, it appears we could see some appreciation in November soybeans. First, prices must get through the 20 day MA, but above today's highs, $16-16.20 seems to be a reasonable upside target short term. After finding support just under $8.50 in December wheat, we've seen a slight pickup in prices. Though wheat will continue to lag, appreciation in outside markets could lift prices back near $9, in my opinion.
Currencies: The dollar found support again today at 79.00, but sentiment remains bearish as long as prices remain under their 20 day MA -- currently at 79.70. Aggressive traders can re-establish bearish plays in the cable; with stops above the 20 day MA -- currently at 1.6110. Another sale, in my book, is the loonie. I like the recent chart action, and see a trade under par in the coming weeks. I've advised clients to look at purchasing at or just out of the money put options. The steadiest performer has been the yen, dropping five out of the last six sessions. Those short, trail stops and protect profit.
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.