Oh my, so much for a quiet day. Lots of volatility in the grains with some two sided trade across the board.
To begin with, what a nutty day in Jan Beans (SF)… Opened higher, shot up to a new high for the week at 1009. For a moment I thought our trend line was going to come into play at the 1018 level… Another shattered bullish dream, though, as selling came in and drove us down inexorably to a day session low at 983 1/2, 26 cents off the high… For a moment in the afternoon, it looked as if we were going down another ten cents to the 975 level, but the rubber-band cracked back and we settled at 985.. Down a half cent on the day…Technically today was a bearish hook reversal, where you have a new high, followed by a lower close. Like I said yesterday, outside-days-up used to mean a lot, I think before so many people learned about technical analysis…The formation served to bring in fresh longs this morning, only to have their blood carry us almost 30 cents lower… Welcome to trading soybeans…
Both Corn and Wheat posted inside day’s down…CZ had a high at 394 3/4, a low at 385 1/2 and settled down 3-1/2 cents at 383 3/4… A ten cent range, in sympathy with the action in the beans… Wheat posted a high at 540 1/4, a low at 527 1/2 and settled down 4 cents at 539 3/4… A thirteen cent range for the day…
Stock indexes had two sided trade, with a bearish smack early through the morning, followed by a rally back through around one o’clock CST and then a 70 point break into the close of the Bonds, followed by a short covering rally late in the afternoon to settle up 50 points at 10234….DJZ posted an early high at 10271 and an afternoon low at 10158… Volatility courtesy of thin volume on a Friday..
SPZ finished up 4 handles at 1094.5, posting a session low at 1082.75 and a high at 1096… The 1100 level remains a ceiling on this SPZ..
Gold and Silver settled higher, both posting bullish hook reversals… Meaning, lower lows on the day followed by a higher settlement… It looks like a hook on the daily charts, and most likely it hooked shorts who sold it in the hole.
Gold posted a low at 1101.20, a high at 1119.60 and settled at 1118.60.
Silver posted a low at 17.025, a high at 17.45 and settled at 17.41 up 1.45 for the day.
Finally, the crude took the selling pressure today, posting a new 3 week low print at 75.57, piercing the 7600 band of support on the daily chart. We are now about 7 dollars removed from our Oct highs at 81.99… Crude posted a high at 77.67 and settled at the 76.37 mark. Down on the day .60 cents a barrel.
An interesting week. We will have to see if the funds keep coming for the grains next week. We have seen even how fleeting their support can be, with 30 cent breaks in the face of their heavy buying…. Funds can push it up for a while, no doubt, but the fundamentals eventually have to support reality…
As these funds take profits in the stock indexes, gold and crude oil, they will be re balancing into commodities.. We saw this in 2005 and it led to some seriously high prices in commodities. If these funds can get a hold of a trend, they can push it due to their staying power and the relatively small capitalization of the cash grain market via the futures pit.
Have a great weekend. Please feel free to leave a comment or a question.
Good Trading