After a long weekend the markets are back to normal trading hours. Crude will finish just shy of 2% higher but will not retake the 9 day MA; in March at $101.25. I have advised the sidelines thinking we remain in the $10 range and do no wish to establish a position being we started the day near the middle of the range. Multi-year lows in natural gas with prices down near 7% today. This makes it five losing sessions in a row with no bottom in site.
Equities inch higher as the 9 day MA continues to support. Use that level as your pivot point; in the March Dow at 12370 and the S&P at 1282. Gold traded above the 40 day MA again today closing just under that mark. I’m expecting a further leg higher and this would be accelerated if the dollar was to back off. I see support at $1635 in February as our upside target remains $1680…trade accordingly.
Support is seen in silver just above $29 in March with an upside target of $32. The big mover today was copper breaking resistance and advancing to four month highs. This was likely from the continued growth out of China. Q4 GDP coming in just under 9% is certainly nothing to sneeze at.
The dollar is exhibiting signs of fatigue but I would like to see a settlement below the 20 day MA before getting too committed . That level is 80.90 in the March contract…trade accordingly.
Aggressive traders could buy the Euro or short the Yen with tight stops. Both trades are a slight forces so I would hold off for confirmation. Cotton closed above the 100 day MA for the first time in seven months…take off all bearish trades at a loss.
For nine sessions Euro-dollars have picked up steam. There will be a time to get short but until we see signs of an interim top let the market work higher. I am still looking for signs of a bottom before reestablishing longs for clients in any of the Ag markets. I believe we have a shot of seeing the December lows challenged so be patient.
Livestock traders could be back long April live cattle and lean hogs with stops just under the 20 day MA. I like the prospect of higher hog prices and the technicals appear a little less risky in my opinion.
Risk disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.
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