By
Matthew
Bradbard
:
Energy:
The 38.2% Fib level held the last two days in
crude oil
as prices ended 1% higher today. If that support level holds expect
choppy action moving forward. I cannot imagine much traction in
this environment. What looked like stiff resistance in
RBOB
was penetrated today with the 2.15% appreciation lifting prices
above the 100 day MA for the first time since early May. Those who
took short trades should have been stopped out at a loss on today's
action.
Heating oil's
gain was much less at 0.40% closing just under the 8 day MA. They
say a rising tide will lift all boats but heating oil will likely
continue to lag.
Natural gas
has traded lower the last two sessions but prices are still above
the 8 day MA. I've been expecting a dip and have been wrong to date
but when it comes I think we get a quick 30 - 45 cent drop so trade
accordingly.
Stock Indices:
Equities have failed to hold onto any gains this week as prices
appear to be retracing. I have no positions on for clients here but
I would be mildly bullish as long as prices remain above 1,355 in
the
S&P
and 12,750 on the
Dow
. Once those pivot points are broken I would shift to bearish.
Metals:
December
gold
traded down by 0.50% today temporarily trading under $1,600/ounce.
That level is the bullish/bearish line in my opinion. Until we get
above $1625 or below $1,580 on this contract expect a sloppy trade.
A close above or below those levels would dictate the next leg in
my opinion.
Silver
gave up 1.35% as prices make their way toward $27/ounce. As long as
$26 holds I would be long ... the problem is that it is a big move
from current levels so keep your size small if trying to find a
long entry here.
Softs:
Cocoa
gained for the fifth straight session lifting prices to 4 ½ month
highs. From my perspective another 3% appreciation should play out.
Sugar
has given up 6% but the 50 day MA at 21.25 is my target in October
would be another 6%.
Cotton
looks like it wants to break lower but first the 50 day MA will not
to break ... which has served as support the last four days. A
trade under 70 cents in December should drag prices to 66 cents ...
trade accordingly.
Orange juice
looks weak ... do not rule out a sub $1 trade a level not seen
since October 2009. If December coffee breaks the 50 day MA at
$169.50 I would suspect $1.60 comes into play.
Treasuries:
30-year bonds
broke down today after challenging the 9 day MA and failing to make
any headway. I remain bearish as long as that pivot point caps
upside. Broken record but same result in
10-year notes
after a failed rally prices broke down and we should see lower
trade ahead. My favored play is the NOB spread; short 30-year bonds
and long 10-year notes.
Livestock:
October
live cattle
held the 9 day MA but prices should be moving south. Aggressive
traders should gain bearish exposure in cows.
Feeder cattle
continue to build a solid base as my bias remains up. $1.45 remains
my target in futures short term.
Lean hogs
broke their 20 day MA as prices should trade back to the recent
lows. Aggressive traders could have bearish trades on with stops
above 80.50 in October.
Grains:
December
corn
traded below but did manage to pare losses closing above its 9 day
MA. A close under $7.94 should set an interim top and lead to a
trade closer to $7/bushel.
Soybeans
same story - a lower trade but prices did hold their 9 day MA. A
close under $16.13 in November would lead to a trade closer to
$15/bushel in my opinion. Those not willing to get short I get it
but really what I would stress is lightening up on longs and
booking what should be a tidy profit.
Wheat
broke the 9 day MA yesterday and probed its 20 day MA today. Prices
are already 60 cents off their recent highs and I see another 60
cents of declines coming.
Currencies:
The
dollar
picked up nearly 0.60%today to trade back to its 20 day MA. That
level at 83.30 in September will serve as a pivot point ... trade
accordingly. On a low risk trade forex traders could gain short
exposure to commodity currencies with tight stops above the recent
highs. FYI this is a reversal of my previous stance.
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
Ease Ahead? Hardly, A Need To Tighten
on seekingalpha.com