By
Matthew
Bradbard
:
Energy: Crude oil
traded up to the 100 day MA as forecast and is close to a 50% Fib
retracement - that level comes in just above $94 in September. I'm
staying with my bullish theme thinking we could see an additional
2-3%. My stance would be to lighten up on longs on a further
advance as we will likely see a trade back under $90 in the coming
weeks.
RBOB
probed $3/gallon for the first time since late April. The sentiment
remains bullish until prices break the trend line on the way down
which is currently 20 cents under current prices. I do not expect
much more upside so start to lighten up longs.
Heating oil
is above its 100 day MA for the first time since late April as well
closing just under $3/gallon. I see $3.02 - 3.05 as the near term
window for upside before we see profit taking ... trade
accordingly.
Natural gas
put in another positive showing but as long as prices are under the
8 day MA; in September at $3.00 my take is the correction that
started last week is not compete. My targets remain $2.75 followed
by $2.60.
Stock Indices:
A further advance today has
equities
almost challenging their highest levels seen in 2012. As previously
stated as long as prices remain above their 9 and 20 day MA there
is no reason to be short but I do not see a catalyst to lift prices
much higher. Could a solution out Europe do that or QE? Yes on both
respects but I do not see either scenario likely in the immediate
future. Remain defensive and I got an idea - use the 10%
appreciation in the last 3 months to book profits and take some
money off the table.
Metals:
Gold
failed at the 100 day MA, closing slightly lower today. $1620 in
December will continue to act as a pivot point moving forward. On a
close above that level my expectation would be $1600/1665.
Silver
gained for the third day running but in that time frame prices are
only $1 higher with a settlement just north of $28/ounce today.
Further upside is expected as long as prices maintain $27.50 I am
mildly bullish.
Copper
appears to made an interim bottom as prices have appreciated 15
cents in the last 3 sessions. I do not see resistance for another
dime.
Softs:
Cocoa
continues its streak adding another 2% today lifting prices to
fresh five-month highs. Bulls remain in the driver's seat but
continue to trail stops.
Sugar
hit my target trading under the 50 day MA for the first time in 5
weeks. Since calling for a retracement several weeks ago prices
have depreciated just over 10%.
Cotton
failed to make it to higher ground but I suspect there is still gas
in the tank as my target is 2-3 more cents higher in December
futures. Play the break out or break down in
coffee
as I expect a 10-15 cent move once prices break above the 100 day
AM or below the 50 day AM.
Treasuries:
30-year bonds
and
10-year notes
were losers again today dragging prices to four week lows. My
interpretation is we've experienced approximately 60% of the
current leg. That being said 30-year bonds should see 145'00 and
10-year notes should see 132'00. Those willing to be a bit more
patient and play the short end of the curve could be in bearish
trades in 2013 and 2014 Euro-dollars with stops above the recent
highs.
Livestock:
Live cattle
are below their 9 day MA and in my opinion headed lower. A 61.8%
Fibonacci retracement on the move we had in the last two weeks puts
October back near $1.22. My stance in
feeder cattle
is neutral to bearish. I don't expect upside but there should not
be too much downside either as a solid base looks to have formed in
the last three weeks. Fresh lows in
lean hogs
as the route continues temporarily dragging hogs under 75 cents.
Selling appears to be slowing but it is premature to call a bottom.
Those in a bearish trade should lighten up in my opinion.
Grains:
The 9 day MA continues to be the line in the sand in December
corn
. When $8 gives way for whatever reason I expect the weak longs to
be shaken out and like a snowball rolling down a hill for the
selling to intensify. Do not rule out a volatile move dragging
price closer to $7/bushel. November
soybean
futures are nearly $1/bushel off levels seen last week and my
target is yet to reached. $15.20 followed by $14.70 are my first
two price objectives.
Wheat
held its own, managing to hold onto the 20 day MA for the last 3
days. On a close below $8.90 I think we see an additional 50 cent
bushel reduction ... trade accordingly.
Currencies:
The
dollar
has yet to breach 82.00 but it is on its way in my opinion. I'm
getting mixed signals in most crosses so I would tighten stops or
move to the sidelines. The only clear signal I have is a bearish
trade in the
yen
with stops above the recent highs. I think we could see a 2.5-4%
depreciation in the yen.
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.
See also
Is Bancolombia Losing Its Luster For Investors?
Part 2 - An Analysis Of Performance And Growth
on seekingalpha.com