By
Matthew
Bradbard
:
Energy
:
Crude oil
closed above the 100 day MA for the last two sessions as September
futures are approaching $96/barrel. With prices at 3 month highs I
am OK with the client having light bearish exposure. I would not
rule out a trade closer to $98 but I do not see prices able to
sustain these levels for much longer.
RBOB
made a 4 month high with prices within 11 cents of their spring
highs.
Heating oil
has showed resiliency as well filling a gap from early May on the
advance of 1.22% today. I didn't suspect the strength in the
distillates as it has been the tail wagging the dog in recent
weeks.
Natural gas
resumed its slide getting within pennies of the 50 day MA - a
support line that has held since mid-June. I am still not ruling
out a trade under $2.60 in September.
Stock Indices:
A fresh 2012 high in stocks as prices bounced off the 9 day MA.
Prices appear to be overbought but until the 9 and 20 day MAs are
broken the momentum could lift prices higher. In full disclosure my
followers will be absent from further upside as I advised exiting
longs prior to this last pop. The market likes round numbers so I
think it will take the
Dow
under 13,000 and the
S&P
under 1,400 to signify an interim top.
Metals:
In the last 2 sessions
gold
has advanced $30/ounce to put prices back over the 50 day MA.
Sloppy action continues and prices have been very indecisive and
being you have to be a market timer here I would keep size small if
trying to navigate these waters. Forced into the market with a
longer time perspective a bullish trade is encouraged but in the
same breath a $50-75 drop is not out of the question.
Silver
gained 1.44% today lifting prices back over $28/ounce. This
represents the top of the recent range and on a trade above $28.50
do not rule out a 3-5% further advance. Like gold though I would
keep my hand close to my chest as prices could drop on a dime.
Softs:
Cocoa
futures continue to hover around the 2400 level but I remain in the
camp that a retracement is due. My target on September futures is
2300. The streak continues with
sugar
down the last 9 consecutive days. If October trades under 20 cents
I would use that as an opportunity to probe bullish trade.
Cotton
has yet to break the 50 day MA on the downside as prices have
danced that line for the last 4 days. On a breach look for lower
ground but risk to reward I prefer the sidelines all things
considered. I wonder if me switching form coffee to tea has any
effect on the demand and effective price drop in coffee. I doubt my
3 cup a day habit had any effect but coffee has dropped 17% in the
last month and appears to be moving lower yet.
Treasuries:
I'd rather be lucky than good as regular readers may remember me
calling for a trade to 145'16 in
30-year bonds
. That was today's low?
10-year notes
also had a similar move retracing as forecast. These moves
represent a 38.2% Fibonacci retracement to the tick. Yes I do
adhere to technical analyses. As long as stocks trade up the
inverse relationship should play out. A 50% Fibonacci retracement
puts 30-year bonds at 143'10 and 10-year notes at 131'05.
Livestock:
After making four month highs early in the week it appears prices
are headed south in
live cattle
from here. A breach of the 20 day MA in October at 124.90 should
signal a trade back to at least 122.50 ... trade accordingly.
Likewise in
feeder cattle
I am calling an interim top expecting a trade south from here. My
target would be 139.00 in September. Weakness abound in the whole
livestock sector with lean hogs doing an about face and also
getting hit. With prices under the 20 day MA I have to be bearish
but there is likely little downside. Stand aside for now.
Grains:
The 9 day MA has been above the 20 day MA in
corn
for the entire summer when prices advanced $3 plus but that will
not be the case on a break from current levels. I think a
combination of technicals and the fact that the crop is virtually
"made" it would not shock me to see a hard drop. To add insult to
injury a break of $7.60 and if traders exited we could find prices
back at $7 quickly ... just my opinion.
Soybeans
are trading back above their MAs as November will need to close
below $16 again for me to think weakness would persist. After a 10%
drop
wheat
has appeared to find mild support picking up nearly 30 cents in the
last two days. As long as December is below $9/bushel I'm
bearish.
Currencies:
The European crosses continue to tread water as I see no trade.
Shorts should have been stopped out of the
Loonie
at a small loss and I'd take a loss on the
Aussie
and
Kiwi
as well as to preserve capital. Weakness should persist in the
Yen
as it adds to its 2% drop in the last 2 weeks.
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
Playing The Rebound In Gold Mining Stocks: My
Recommended Stocks Right Now
on seekingalpha.com