Energy: Crude oil started the week in the green lifting price over $92/barrel. Support is still seen at the 8 day MA just under $90 while upside is eyed at $94.50 in September. Inside day in RBOB with prices failing to gain for the first time in five sessions. Support is seen at the 61.8% Fib level just above $2.88. I don’t feel upside is exhausted and a probe of $3 is possible in my opinion. September heating oil traded above the 100 day MA for the first time since the first week of May. Like RBOB I see prices making a run above $3 on this leg. Natural gas stopped short of breaking the 50 day MA trading higher for the first time in five sessions. If prices retake $3 in the coming sessions I would say an interim bottom has been established but I am still in the camp that we could see a trade closer to $2.60…stay tuned.
Stock Indices: Doji star in the indices as gains could not be maintained. Prices rolled over from around the same levels in late April/early May but it is too premature to predict history repeating itself. If long remain long until prices get below the 9 and 20 day MAs.
Metals: Gold continues to tread water but a positive development could develop if prices close above the 100 day MA; in December at $1620. Prices above $1590 have me mildly bullish. Silver trading continues to be like watching paint dry. Unit silver can get out of its own way I would not put too much attention on trading in either direction. Like a coiled spring when this market decides on a direction expect an explosive move…the difficult part will be the timing. I do not cover platinum often but looking at both the daily and weekly charts if prices maintain the $1400 level traders can scale into bullish trade with stops just below that key support level. For pricing I am referring to the October futures.
Softs: Cocoa is overbought but as long as the greenback is trading south look for a bid to remain. Sugar broke the 100 day MA and should continue lower as a 61.8% Fibonacci retracement puts October back near 21.25. Since bouncing off the 50 day MA last week cotton has appreciated nearly 5 cents of 7%. The 100 day MA in December comes in just under 78 cents and should be challenged in my opinion. Coffee could go either way and I will offer the same advice from last week a close above the 100 day MA or below the 50 day MA should determine the direction of the next leg.
Treasuries: 30-yr bonds and 10-yr notes held onto small gains but as long as prices remain under their 9 and 20 day MAs I’m bearish. The only problem with this stance is my success here is likely predicted on a climbing stock market and I do not see much more upside. I will not let my opinion play a factor as prices are bearish in Treasuries until the aforementioned MAs are penetrated.
Livestock: October live cattle are having trouble hanging onto profits and with a settlement back under the 9 day MA today an interim top may be in. Aggressive traders can probe shorts with stops above the recent highs. Those long feeder cattle should tighten stops just under the 9 and 20 day MAs as not to give back too much. October lean hogs continue their decline getting close to 75 cents, a drop of over 10% in the last week with no end in sight.
Grains: December corn managed to dance around the 9 day MA closing back above $8/bushel after trading below that level most of the day. I’m still thinking deprecation is due that could drag prices closer to $7. November soybeans lost 2.7% to close under their 20 day MA for the first time since this contract traded above $13. The current price is just shy of $16/bushel. My downside targets are $15.20 and possibly $14.70. The 20 day MA supported wheat as prices were able to hold the $9/bushel level. My downside target in CBOT wheat is $8.35.
Currencies: The dollar index held at 82.00 but I view this as temporary with a target of 81.00 in September contract. The easy money has been made in the commodity currencies so I would be looking for an exit door. For fresh entries long the Euro have stops just under the 20 day MA would be my suggestion. Shorts in the Yen should have stops just above the recent highs.
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