As the school year ends, graduations and weddings are upon us, its not unusual to see the stock indexes go to sleep. June is upon us, July is a holiday month in the US, and then Europe basically shuts down for August.
Barring any unforeseen calamity, I could see a period of sideways chop in about a 500 or 600 point sideways chop in no man’s land.
Grains: Volatility rules, but so far,I still like the strategy of selling rallies with tight protective stops. November beans is hugging a trend line with 13.50 being the concentration area. A settlement above 13.70 would be bullish a push below 13.40opens up a 40 cent break, and if the 13.00 level does not hold, the break lower could be sharp.
Corn: December Corn is coiling up for a dramatic move. If it can settle above 685 in a meaningful way, on heavy volume, we could be off to the races higher. Currently we are seeing support at 6.50. CZ has been jumping this 30 cent trading range for the past week. There is 1.20 to 1.50 worth of free fall risk beneath this market if it breaks.
Wheat: July Wheat looked like it wanted to make a run at a break out above 8.40 just 4 sessions ago.. today it looks poised to head down to 7.31. Quite honestly, when WN gets to 730, buy it and risk 6 to 8 cents to try and make 60 on a bounce higher.
Crude Oil.. After a 20 dollar break from 114 down to 94… we had our 50% bounce back to 104.60… not a perfect 50% but damn close enough.. perfect would have been 104.73…
Now we look kind of tired down here at the 95-101 Six dollar trading range.
On a bullish Note, CNBC had a headline today talking about a bearish outlook for crude.. that alone is enough to make me hesitate to get short here. If I do get short, it will be on a stop order to execute the position. Technically there is a gap back down to 88.00 back in February. That is a juicy target for the bears.
Gold: Support technically for gold is at a long term trend line. That support comes in at 1485-1484. Today we settled at 1523. Another 40 dollar sell off could be just what the doctor ordered to squeeze out the “hard money” AM radio fear mongers who got their clients long gold up at 1575.
Silver: Silver has had its 62%retracement of what I like to call its “silly rally” which started in February at 26.25 and exhausted itself at 49.82 On April 25th. One month ago, to the day… We then had silver “collapse” in a wall of speculative fright down to 32.30 on May 12th. 41.07 looks to be a good 1/2 way back target for the bulls, and after the wash out we’ve had of the weak bulls, I like that as a target over the next 3 to 4 months, through the summer doldrums.
Of course, there is absolutely no reason we can’t head back down to our Feb low at 26.25.
If you are looking to pick a near term bottom and profit from that bounce, you must be prepared to bail quickly at the first sign of continued weakness.. I am not the only one on the planet who is looking at that 40-41 area as an upside target. We may be walking into a bull trap.
So be long, but be careful.
That is all for tonight.
Good Trading
CER
That’s about all I can see tonight.
Good Trading
CER