Energy: Just when I was ready to throw in the towel on crude it held in today like a champion reversing from early losses to close near its highs up 0.85%. It is critical that the recent lows hold on a closing basis. July RBOB remained above $2.65 ... the line in the sand. A close above $2.70 will need to happen for confirmation that an interim bottom has been established. The support level in heating oil is $2.60; prices closed 3 cents above that level today. The next few days will determine the immediate direction as this tug of war should have a winner rapidly. Natural gas is very close to the mid-April contract lows. I am on the sidelines seeing if these levels are challenged in the coming sessions and then I will react. I am leaning toward buying in the next few days for clients ... stay tuned.
Stock Indices: Stocks were bid higher managing to dig in their heels and bounce off their short term MAs. I'm not a believer but based on the technical action we may get a bounce. To take it a step further we may have a triple bottom forming just under the recent lows. That could prove to be a key pivot point in the coming weeks. In the S&P that level is 1,305 and in the Dow at 12,370.
Metals: I continue to feel any long entries under $1,600/ounce should be taken. August gold finished up 1% today and appears to be on the verge of breaking above the 50 day MA. Once that level is cleared around $1,620 I think it will be quick work to the 100 day MA just under $1670 ... trade accordingly. Silver picked up just better than 1% bringing prices back near $29/ounce. I remain friendly in this metal as well thinking $30 should be seen sooner rather than later. Still looking for a bounce in copper moving forward, upside resistance is seen at $3.44 followed by 3.54 in July futures.
Softs: Cocoa failed to make new lows and actually was bid higher trading intra-day to the 100 day MA and closing 2.5% in the green. Being this market pushed higher longs in the trade should remain long and trail stops. Sugar closed slightly lower buy did hold onto the trend line that was penetrated yesterday. Continue to buy dips as I see an additional 5% appreciation from current levels. Buying was rejected in cotton in recent sessions but until we see higher ground I am fine as a spectator. Bearish trades are back on my radar if and when December trades closer to 77 cents.
Treasuries: Technical analysis is an art and it takes years to learn tricks but if you overlay the 9 day and 20 day MAs on the Treasury complex daily chart I think you will be amazed. These levels have and will continue to serve as major pivot points in my opinion in both 10-year notes and 30-year bonds. Prices have once again breached the up sloping trend line and are on the verge of closing below their 9 day MAs in both instruments. I like the idea of a bearish trade thinking we get a massive leg lower in the coming weeks.
Livestock: October live cattle prices have run into resistance around 125.50 and on a settlement back below its short term MAs traders could start working back into bearish trades. Until then I would stand aside. Those pivot points come in around 124.35 on this contract. No resistance to note in feeder cattle as prices gained 0.60% today challenging the highs from three weeks ago. Do not rule out a trade to the contract highs in mid-February approximately 1% higher. Lean hogs gave up 0.55% today to close below their 9 day MA for the first time in three weeks. I called an interim top yesterday and expect more downside to follow ... see previous posts and chart of the day.
Grains: December corn lost 2.15% today to drag prices back under its short term MAs. I like being long this contract into month end but scale in as we may get an opportunity closer to $5/bushel. Wheat lost better than 2% today. Traders should have either taken their longs off or have stops just under $6.10/bushel in July. Soybeans were able to gain marginally today but my take is legumes are just raising their head above water before they take another dive. My target in the July contract is $13.80 in the coming weeks. Wait for oil to bottom and the ensuing correction in soybeans and then I will likely issue a buy recommendation in soybean oil perhaps in a forward contract.
Currencies: The dollar traded lower but not enough to break the 20 day MA which was today's low. Expect this very soon and then more selling should emerge. I am still targeting a trade under 81.00 in the coming weeks. I like bullish exposure in the commodity currencies and the Cable. The euro and swissie I am searching for more evidence. The yen could break hard on a stock advance but I'm a skeptic currently ... stay tuned.
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.