Chris Bersaw's Instablog

Commodity Currents: The Week In Review, Frosty Friday.

Sat, 24 Nov 2012 14:50:15 -0500

Will the recent chill continue for equities? So far that doesn't appear to be the case with the S&P500 futures as prices remained over 1355 and reversed direction to challenge 1404.50 with 1410 behind that for longs to deal with next week. The Nasdaq 100 played catch up after holding 2,500 exceeding 2606.55 looking for 2669 stopping under the downtrend from the Sept. high, also at an inflection point although in both cases volume was sharply lower likely making future gains difficult. 10yr Treasuries pulled away from new contract highs again to challenge 133-06 which continues to hold although not impossible to see prices fall back to 132-00 before its all said and done. The Dollar also declined unable to advance beyond 82.210 now sitting on 80.300 support with more under that level to counter additional selling but as long as 80.00 holds its possible prices can recover but generally being bullish on the greenback has been a losing proposition. Gold shined taking out another resistance level, this being 1738.10 putting in play a challenge of the key 1,800 level which has capped prices for more then one year, fourth time could be the charm, we shall see. Silver also gained taking out a cluster of resistance around 33.305 putting 35.000 in play a level that has capped prices since last November but with new buying present the fourth challenge could be the one that matters while Copper continues to play catch up putting prices within reach of 3.5675 as buyers return not waiting for a challenge of 3.400. Crude survived another challenge of 86.16 building a small base around that level to ultimately push higher from especially if prices can close over 89.04 but face more of a challenge with 92.27 whereas Natural gas continues to advance mostly on short-covering leaving prices vulnerable to profit-taking but downside should be limited by 3.863 as prices remain within striking distance of 4.073 with a close over that level being quite bullish putting in play an eventual run to 4.450. The slow grind high in Feb. Hogs continues remaining in buy the pullback mode should it pull back to 85.000 but might be a while as prices look poised to further their advance now within sight of new contract highs and Feb. Cattle decided to do something, rally in this case, exceeding 130.625 now within reach of new highs of 135.00. Corn did approach 700 but that's all it was able to do before reversing higher closing back over 747 putting 770 in play although think its only matter of time before we see lower prices that challenge 665 but not this week. Wheat remains unmotivated resisting a sell off despite looking like it wants too just that after falling under 878 as 820 still remains in play while an inside week for Soybeans points to a reversal as support 1368 continues to hold with prices likely to bounce toward 1506. Oats attempts to rally but is struggling with 382. Coffee grinds to new contract lows at 149.65 before bouncing to close back over 150.00 support could be an encouraging development but as buyers are still largely out of the market with no reason to buy, prices can continue to churn lower even with fewer sellers although the lower prices go the greater the chance of a reversal as the first upside target remains 162.55. Sugar tries to rally but ran into sellers waiting for a test of 19.82 before sending prices back to the lows within reach of 18.48 whereas Cocoa advances peeking over 2,475 putting in play an eventual return to 2,590 with nearby support seen at 2436. Orange Juice zoomed higher closing in on 130.00 something I expected two weeks ago but this time with more buyers so its possible 130.00 could be breached putting 138.30 in play, otherwise buy the pull backs with support at a distant 115.65 for now and Cotton continues to do very little unable to rally beyond 72.24 putting a another return to 70.00 in play again as prices remain largely range bound.

DISCLAIMER:

The risk of loss trading commodity futures contracts can be substantial. You should, therefore, carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. Trading futures without protective stops or options is not recommended. Past performance is not indicative of future results.

Commodity Currents: Technical Tuesday.

Tue, 13 Nov 2012 23:16:03 -0500

A buy program on the open sent stocks to the high after sellers in the S&P500 futures were unable to take prices under 1365.75 so had to rush to cover positions although gains ultimately didn't hold so more buying is needed to get over the technical hurdles starting with 1397 with a similar performance with Nasdaq 100 as lows of 2553.00 were rejected resulting in short covering as bull's near term upside objective remains 2695.63 to mark the start of the oversold bounce. 10yr Treasuries were rejected at the highs again, this time 134-055, one tick under the high 2 sessions ago and starting to look a little toppy here with support seen at 133-13 and the Dollar grinds higher challenging resistance at 81.345 with support seen at 80.830. Gold drifts lower after being rejected from 1740 two sessions ago but buyers support at 1717.20 which makes me think there is more upside especially if prices take out 1743.30 and an outside day in Silver pointing to higher ground if can take out 33.285 as buyers support at 32.090 for the third time with more support under that level to check losses with Copper also joining the party forming an outside day while struggling with resistance of 3.4795 as the recent profit-taking appears to have run its course with trend line support from the June lows seen at 3.3725. Crude slipped again still unable to get over 86.32 increasing the chances of more selling as 80.00 remains easily in sight but Natural gas explodes higher after overtaking resistance at 3.600 and exceeding 3.708 so prices need to stay over those levels to keep 3.986 within reach something that could happen sooner then later so stay tuned. Hogs stampeded higher looking for 82.000 but missed the mark in a stunning rejection off the HOD looking like a pullback to support of 79.100 is in order but Cattle advances over 125.450 forming an outside suggesting higher prices if can get a close over 126.075 first. Indecision day in Corn after last session sell off with chart-based support seen at 700 with 682 within reach as the levels of overhead resistance continue to grow starting with 736, Wheat continues lower as well probing the lower end of its recent range at 850 with a lot of white space on the chart until the next support level seen at 808 and the selling in Soybeans slows as prices sit on chart-based support of 1400 as selling conviction is lacking. Oats continues to hold 358 as resistance of 363 caps gains. Coffee leaves a bitter taste for anyone who is long as prices plunge 4.39% to new contract lows as sellers get motivated and where it reverses no one knows yet so stay tuned while Sugar after taking 19.28 held that level today challenging 19.52 but closed poorly although able to stay over the new support level to perhaps try again. Cocoa continues to remain over key support of 2,353 for the fourth time pushing higher with resistance of 2,408 to contend with before more gains are possible and Orange Juice brightens up blowing through 107.90 and tagging 109.80 with a trade to 115.05 not out of the question especially if prices can stay over 108.00 on any pull backs which I expect to be purchased. Cotton fell back under 71.05 unable to make any significant upside keeping a trade to 67.20 on the horizon.

DISCLAIMER:

Term Structure Of Futures Prices.

Mon, 12 Nov 2012 15:33:04 -0500

(click to enlarge)

Chart as of Nov 9th.

Commodity Currents: The Week In Review.

Sun, 11 Nov 2012 21:31:41 -0500

What a difference a week makes, S&P500 futures after initially holding 1401 for the past couple sessions fell forming an outside week suggesting there is more to this decline despite being within two percent of another support area at 1349.75 as 1401 becomes new resistance to overcome on any upside bounce while the leader of losses continues to be the Nasdaq 100 falling under another support level at 2595.70 putting 2487.50 in play should the selling continue with more resistance to work through on any bounce starting with 2595.70. In response to the weakness in equities, 10yr Treasuries were once again bid up within reach of new highs so they might be ripe for selling if prices are unable to advance much further especially with any recovery in stocks but support remains far below at 132-28 while the Dollar continues to build on gains as well now within reach of another significant resistance area at 81.355 to cross so we shall see how much upside potential remains. Gold continues higher closing 14.30 shy of its upside target of 1745.20 after holding support around 1672.90 and longer term a challenge of 1800 looks more likely now then it did last week with Silver staying over 30.840 as buyers supported now trying to retake 33.300 with more resistance to deal with but Copper heads in the other direction inching closer to key support at 3.3815 after being unable to advance beyond 3.5555 which has capped prices for the 2nd time so have to keep an eye on this potential divergence. Crude managed to climb back over 85.77 support keeping its upside possibilities alive although presently stalled after an earlier attempt to challenge 90.62 failed putting prices in reverse to maybe try again while Natural gas runs into resistance at 3.6200 but the longer prices stay over 3.452 the chances of an upside move increase. Outside week in Hogs after prices held 77.000 indicating more upside and with 79.225 new support, prices are looking for 82.200 while Cattle remains fenced between 125.00 and 127.00 so have to stay tuned as to where prices are likely to go. Corn continues to do very little on the upside as prices are unable to advance beyond 746 increasing the possibility of a trade to 677 but Wheat looks like it wants to head in the other direction inching over 876 looking for 886 although a sell off to 811 would be better to challenge first then advance higher afterwards and Soybeans adds to the confusion continuing lower looking for 1408 as resistance remains far over the market at 1535. Coffee continues to grind lower now sitting on 149.65 support so far in no hurry to reverse direction as there is little incentive to buy although what heads lower will reverse eventually but until then next likely support area to watch is 140.00 while Sugar continues to sour for longs also grinding lower toward its downside objective of 18.48 with resistance seen at 20.10. Cocoa reverses direction after failing to advance beyond 2,456 finding 2,324 support which is holding thus far checking losses, Orange Juice remains at the bottom of its recent range unable to make any upside not even getting close to resistance at 115.00 but thus far able to stay over 105.00 last time in this area was back in August which resulted in prices rallying to 130.00 something to keep an eye on and Cotton continues to move in slow motion likely headed to 66.05 with resistance seen at 73.00 as buyers stay away.

DISCLAIMER:

Commodity Currents: Fasten The Seatbelts Friday.

Fri, 09 Nov 2012 22:36:35 -0500

The S&P500 futures challenged their 200day average at 1369.50 for first time since June bouncing on likely short-covering after buyers emerged allowing prices to recover and close over that key support level so have to see if more buyers return or will sellers take prices lower while the Nasdaq 100 which has been the leader of losses also reversed direction but has a way to go before challenging a resistance area around 2655. 10yr Treasuries advanced within sight of new contract highs north of 134-16 but reversed direction in the usual inverse reaction to equities but remaining far over support at 133-05. The Dollar continues higher climbing over another hurdle this time 80.875 looking for 81.335 with more resistance at 81.500 but with buyers starting to notice could see a challenge of higher pries before support is challenged which continues to pressure the currencies like the Euro and Loonie but not the Yen remaining the exception although it was rejected at 1.2648 so see if it can close back under 1.2553. Despite the resurgent greenback Gold continues to advance beyond 1718.40 but presently stalled under 1741.80 although suspect this might be temporary and pullbacks should be bought while Silver continues higher as well now over 31.115 looking for 33.255 but an outside day in Copper takes prices in the other direction after being rejected from 3.4875 earlier on so have to see if this divergence continues. Buyers continue to flow into Crude supporting when prices held 84.00 to send oil back over 86.00 and as long as that level holds could see further appreciation namely to 87.67 although prefer to see a deeper pullback to 80.00 but sometimes things just don't happen the way we want while Natural gas continues to burn both sellers and buyers alike advancing on short-covering then falling on profit-taking now on top of the bottom challenging support of 3.482 within sight of 3.455 and can't rule out a trade to 3.400 after being turned away from 3.564 although the longer term outlook is favorable can't rule more downside before prices can make another challenge of 4.000. Hogs continue to wander higher after blowing through resistance around 76.000 earlier in the week now looking for 82.000 with solid support found at 78.725 offering a great area to buy should prices pull back and Cattle tries to hold gains struggling to stay over 125.550 while rejected from 126.150 for now upside gains will be difficult to come by. Two sided trade in Corn with prices rejected at 755 ending under 743 again looking like they are headed lower but so far no sell off yet with nearest support seen at 700 while Wheat which had been advancing of recent reversed lower now within reach of 877 but with more support under that level to check further downside but no such support for Jan Soybeans plunging under 1500, a level which had been supportive to find the 200dma at 1449 first time since June on a spike in volume so this pretty much crosses the T in top for the beans and we could easily see 1250 before this decline is over. Oats didn't do much still consolidating over 358 the lower end of its month long trading range with near term resistance seen at 370. Coffee buyers continue to sleep in as prices grind lower to new contract lows not even attempting to challenge 152.65 although sellers are not in a hurry to sell either so probably best to watch for now before trying to pick a bottom while new contract lows of 18.66 were rejected in Sugar suggests an eventual change of direction resulting in an outside day with prices touching 19.29 resistance at one point before pulling back and Cocoa fell under its 200dma at 2,350 but able to recover to end back over it as buyers support suggesting higher prices are likely but Orange Juice was squeezed lower falling back under 107.70 within reach of new contract lows after a failed rally attempt stalled at 110.30 although selling conviction remains lackluster so am looking for signs of a reversal and Cotton continues to take the path of least resistance lower although buyers supported at the lows to send prices back to roughly unchanged but with a lot of resistance to work through starting with 71.25 upside will be limited.

DISCLAIMER:

Commodity Currents: The Week In Review.

Sun, 04 Nov 2012 21:31:33 -0500

The gains in the Indices didn't last very long this week with S&P500 futures turned away from 1432.50 resistance for the second time although remaining over 1398.25 but something has to give and am thinking that will be support putting 1381.00 in play especially since the Nasdaq 100 futures fell short of its upside objective 2702.50 to end on the lows keeping 2587.04 within reach. Ten year Treasuries managed to get back over 132-25 resistance but that's about all they did roughly in the middle of their recent two point range so unless something changes don't see anything to do whereas the Dollar advanced beyond 80.375 putting 81.255 in play now with more support under it now, this move could gain traction next week. Gold dropped resuming its decline now within reach of a support zone 1670-1675 as prices pull back from the failure at 1800 but with large specs still 89% long, there could be more to this decline so can't rule out a trade to 1611.00. Silver also fell rejected from 32.820 now within reach of 30.550 although large specs being 85% long could also result in further profit-taking putting a challenge of 28.625 in play while Copper was rejected from 3.5495 putting 3.3725 within sight. Crude reversed direction slipping back under 85.64 which makes me think there is still could be more downside left in this move namely a trade to 79.25 while Natural gas wasn't immune to the selling either falling shy of 4 percent as the recent move higher was mostly short-covering followed by classic profit-taking taking prices within reach of 3.435. Putting this decline in perspective, from the high printed on 10/19 at 3.970, prices have dropped 10.65% from the initial advance of 23.68% from the last pullback so could easily expect another 5% decline maybe more before considering long strategies. Hogs were rejected from 79.400 area for the third time resulting in profit-taking from recent gains as prices are now under 78.275 looking for 76.000 while Cattle remains fenced in by 126.875 once again testing support at 125.000 with 123.125 on the horizon. Corn backtracked unable to advance beyond 758 to end on the weekly lows again putting in play a longer term trade to 677 with Wheat still looking for direction after a probe of 882 fell short resulting prices falling toward the lows before buyers supported holding the line at 850 keeping prices range bound for another week and Soybeans reversed lower without a challenge of 1595 keeping 1400 within sight as prices travel the path of least resistance and Oats reversed direction to end lower as well dropping under 376 with authority looking for 352. Coffee probed new contract lows before ending the week slightly higher although remaining within reach of 149.70 while no low is ever too low, this will be a buying opportunity eventually but probably not today as sellers are getting motivated with resistance at 166.10 however Sugar formed an indecision week printing new contract lows but with less selling interest setting the stage for an eventual reversal as near term upside objective for buyers is 20.20 should they get motivated to buy and Cocoa covered from its profit-taking after holding 2,322 area within reach of 2,491 but expect more of a challenge getting back over 2,568, Orange Juice sits just shy of new contract lows after being rejected from 110.65 as buyers remain nowhere to be seen yet sellers aren't capitalizing on the situation either so have to watch and wait but just examining the chart, looks like volatility is increasing which could signal a reversal and Cotton headed lower unable to build on gains to fall under 71.26 with 66.05 next likely downside objective for sellers.

DISCLAIMER: