The RCM Commodity Update covers all major U.S. commodity markets to ensure you are aware of the main movers among all seven commodity sectors including energies, financials, metals, softs, livestock, grains and currencies. Trading recommendations for both futures and options are based on technical analysis.
Jan 10, 2013
Stock Indices: The Dow is higher by 0.61% as of this post lifting prices to 2 ½ month highs. We are close enough that we make an attempt at the fall highs less than $100 from today’s levels. I don’t like…I don’t trust it and therefore I’m not a buyer. The gap below the market still needs to be filled and I think it is done in quick order. The S&P gained 0.77% to take prices to fresh highs. I may suggest clients to roll up their hedge but I need to consider the risk as we’ve already taken on too much water on this ship. Very frustrating as I had profits on this trade 2 weeks ago. Rookie mistake...letting a winner become a loser…shame on me. Look for some ideas to follow.
Jan 09, 2013
Livestock: February live cattle gave up 0.75% to trade down to the up sloping trend line mentioned in previous posts. This pits prices near 1 month lows reaching my objective forecast of late. Lighten up as cattle could bounce and allow you to sell again. Feeder cattle cut through its MAs like a hot knife through butter off 1.5% the last 2 sessions. I think we could see March futures lower by an additional 1.4%.Lean hogs lost 2.49% as futures approach 1 month lows. My objective is 83 cents in February futures.
Jan 08, 2013
Grains: Corn has closed higher the last 2 sessions and though we did not settle above the 9 day MA we did probe that pivot point. A close above that level should get bulls more interested. I think if anything we could get a bullish surprise Friday as most are looking for bearish numbers to end the week. A seasoned grain trader I spoke to today told me the last 6 years we have had limit moves 5 times on this report so expect fireworks. I continue to like light bullish exposure thinking we could see 10% appreciation per bushel. Soybeans failed to follow through on yesterday’s gains but aggressive traders could probe longs with tight stops. Not my favorite play in Ag in full disclosure as I prefer the fundamentals in corn and wheat. On a close above its 9 day MA I may explore bullish trade but I’ve yet to move for clients. Early gains were lost in wheat but I think this is one of the best values in the entire commodity sector. Prices are down over 20% in the last 4 months and I do not think that is justified. I’m advising clients to nibble at bullish trade ahead of the USDA and add after the report if we are correct.
Jan 07, 2013
Energy: February Crude oil closed just over $93/barrel …around resistance that has held the last 4 sessions. I do not see much gas left in tank. Confirmation of prices moving lower would be confirmed by a trade under the 8 day MA; currently at $92.33. Understand my guys that remain short futures have sold put options 1:1 against their position. RBOB gained 0.47% to close back over its 8 day MA. I still think $2.80 should cap upside but this assumption is predicated on Crude backing off so stay tuned. My current stance is futures trade under $2.70 this week or next. Heating oil also was a sight gainer closing over its 8 day MA but under its resistance at $3.06. Watch Crude for guidance but I think we break down very soon…my objective is 10 cents from today’s close. Natural gas probed the 8 day MA but lost ground in late dealings to close slightly lower. I like scaling into to bullish trade several months out anticipating 30 plus cents from current levels.
Jan 04, 2013
Currencies: H/L the dollar has advanced almost 2 cents in the last 3 weeks but the mid -day reversal may signal an interim top…stay tuned. The Euro got with 10 tics of the 50 day MA before paring losses. If short place stops just above the 20 day MA is my suggestion. The 50 day MA supported the Swissie but let’s see if that is the case next week...protect profits with options or move stop down. The Pound lost 1.5% the last 3 days and appears destined for lower ground. The Commodity currencies could go either way as I’m getting mixed signals. Another losing week in the Yen down 2.35%...making it 9 consecutive weeks. Trend followers dream!
Jan 03, 2013
Currencies: The dollar gained 0.71% to close above the 50 day MA for the first time in 3 weeks. Further appreciation should be seen but a trade much above 81 in March is unlikely in my eyes. As I voiced yesterday on a dollar pop expect the European crosses to back off…my favored play is the Euro. See today’s chart of the day. Aggressive traders could get short the Loonie and Aussie once the 20 day MA is penetrated with stops above this week’s highs. The Yen continues to get hit as $1.1250 is the next significant support. I never thought you would see that level before a snap back but I am eating crow. Prices have lost ground the last 8 weeks and 12 out of the last 14. What I’ve learned is nothing moves in a straight line but this has been a phenomenal trade for trend followers.
Jan 02, 2013
Metals: Gold closed up 0.78% having gained 6 out of the last 7 sessions picking up nearly $50/ounce from the lows last week. I see further appreciation ahead and have advised clients to buys dips. I am friendly as long as prices remain above their 200 day MA; currently at $1668 in February. Silver gained 2.58% to close above the 200 day MA. We’ve likely turned a corner and we should see higher ground ahead but this will not be a smooth ride. We could correct $1 before we see much higher ground so do not get too long in the tooth just yet. Like gold I will be buying dips for aggressive speculators. Those that timed fresh long entries last week should book partial profits in gold and silver in my opinion.
Dec 21, 2012
The S&P will finish lower on the session but well off its lows. Prices overnight were as low as 1391 on news that there will be no immediate resolution on the fiscal cliff. We will close just above the 9 day MA though prices were well below the 50 day MA late last night. My stance is the same it has been for weeks with no quick fix prices should respond by a move lower. Some clients are in bearish trade with an objective of 1370/1380. The Dow will close lower by 0.90% after being down 2.2% overnight. Today’s chart of the day identifies Fibonacci levels that I would use for downside objectives.
Dec 20, 2012
Metals: February futures low in gold today was $1636 but losses were pared as prices ended about $10 off that level. A 61.8% retracement has occurred and so far the trend line that has held since May held. I advised clients to exit all remaining bearish trade and to start working long. My favored play is bullish options exposure in June contracts. Scale into the trade as we are catching a falling knife. As prices start to bounce I would be willing to add to the trade. I think we could get a $50 bounce in the next few weeks…trade accordingly. Silver has lost ground the last 6 days which was great for my client’s bearish trade which we exited today. A 61.8% Fibonacci retracement is complete and I think there is good reason to be scaling back into bullish trade under $30/ounce. My suggested play is scaling into March futures or bullish options exposure in May. Contact me for exact details and strategy.
Dec 19, 2012
Metals: Following up after yesterday’s 1.62% loss in gold I would have expected more selling today as prices closed lower by only 0.18%. The key pivot point to me is the 200 day MA which was probed the last 2 days but was able to hold on a closing basis. My stance as explained in today’s chart of the day is we have a little more work to do on the downside. Silver lost 1.75% today and is lower by 7.5% trading down the last 5 consecutive sessions. The 200 day MA is also the line in the sand here. I am a buyer with both hands under $30/ounce for clients given the opportunity. As for bearish trade I am looking to unwind trades ideally the next 2 days around $30.50-30.75 for clients. This includes back ratio spreads in March options. A few days ago I forecast an interim top in copper and expected prices to back off...since copper is down 10 cents and more selling is expected.