Providio’s Futures Market Commentary for 12/29/2011
Posted in the Day Trading Forum
Since: Nov 11
#1 Jan 2, 2012
Please see below for updated comments on the Grains and Metals. In particular the Overbot conditions and gaps left to the downside on this morning’s reopenings in Corn and Beans.
Currencies:(29Dec) End of year position squaring, improved US economic forecasts, and Iranian threats ion the Persian Gulf has some churn in the FX market among others. Europe’s debt will still be an issue but for today, it’s off center stage.
E WARY OF ANY FURTHER EXTERNAL DYNAMICS AS THAT HAS BEEN THE PATTERN WHEN “RISK OFF” BECOMES OVERDONE.
Aussie:(29Dec) A close to 3-month symmetrical triangle with no break out in sight. The 200-day moving average at 101. 40, while still rising, has been acting as a ceiling since breaking below decisively on 11/9.
Seasonal Snapshot: All three patterns firming until the end of the year.
British:(29Dec) Sterling made news lows, and just looks dreadful on the chart. Late position squaring mitigated the day’s losses. The 200-day Moving Average is falling and the market is still well below that level.
Seasonal Snapshot: The 5yr is diverting from the 15&30yr: 5yr continues the descent into the end of the year, the 15&30yr move higher.
Canadian:(29Dec) Recent action retains its look of a symmetrical Triangle pattern.
Look for resistance at about 9850 and support near 96. 40. Neither is likely to be tested until next week.
Seasonal Snapshot: All three patterns are weak through the end of the year.
Dollar Index:(20Dec) New highs hit earlier on, then positions squaring took the market down a few ticks. Rising Trend is still rising. Look for even more light action until the middle of next year. The 80. 00 level is showing as a significant support area.
Without further external actions by authorities, we expected previous pricing dynamics to resume their directional bias, regardless of our current technical tone.
Seasonal Snapshot: Choppy consolidation with a downward bias until year end.
Euro-FX:(29Dec) After making new lows, the Euro rallied late in the day on position squaring. Despite the late action going higher, the falling longer term trend is still in place. With the 200-day Moving Average and no “bad news” coming out about the European debt issue, the dynamic shifted elsewhere. Volume was quite restrained.
That said, watch and tighten risk controls if the Euro continues to break down. Some sort of artificial government dynamic is likely there. Outside of that, resistance should be offered at falling trend line below 1. 3150.
Seasonal Snapshot: A more positive bias until the end of the year.
Yen:(15Dec) March Yen basically testing a support level at 1. 2825. The general post BOJ intervention consolidations range low is about 1. 2810. For all intents and purposes, the Yen has gone nowhere post intervention. Our technicals are a mixed bag, consistent with a market in sideways action. Though there are fundamental reasons to short the Yen, the technical picture is not yet clear. 12810 shows as strong support.
Seasonal Snapshot Consolidation with a downward bias ion all three patterns until year end.
Energies:(29Dec) After yesterday’s dire European debt news, the dynamic gave way to US growth prospects and Iranian mischief in the Persian Gulf. More seasonally warm weather in the Midwest and Northeast has NatGas on the run again.
Seasonal Snapshot: All three tracked Petro markets’ negative bias has turned positive until year end. To our surprise, the pattern is much more pronounced in RBOB than in its two Petro counterparts.
Crude:(20Dec) With better than expected US Housing Starts data and Iranian supply concerns, Feb staged a meaningful rally. Its highs are right at the bottom of a range put in before last week’s plunge. Volume fell. Stay with a negative bias in the absence of any compelling news in either direction. 92. 50 is showing as a support level in Feb. A failure to hold there probably targets the upper 80s. Watch the Euro for a clue as to direction as they have been well correlated of late.
Since: Nov 11
#2 Jan 2, 2012
NatGas:(20Dec) Modestly cooler weather has usage likely rising but not a pace that will chew through the record storage. Secondaries have gone positive but Primaries are still negative in bias. Without a sustained cold spell in the Midwest and Northeast, this market should remain largely in a bearish pattern. Along with Heating Oil, the lack of real cold weather has the heating fuels under pressure and Oversold.
Seasonal Snapshot: The 15 & 30yr patterns are pointed strongly to the downside through the end of the year. The 5yr is sideways with a mild downward bias.
Equities:(29Dec) Higher action off of better US data. Modest lower Volume rally with the market not setting any new levels. Stay away until after the New Year.
Seasonal Snapshot: The SP & Dow’s 15&30yr patterns are in an uptrend for the rest of the year.
The NASDAQ’s upward pattern has been in place since the middle of July and continues until the end of the year.
Grains:(29Dec) Modest inside days on our 3 tracked markets. No new levels and position squaring at work.
Corn:(27Dec) Not to be left behind, Corn joined the rally in the sector on the back of Beans and poor South American weather. The March contract’s break out above 620 reversed the falling trend.
Pay attention to the extreme Overbot conditions and the gap down to 621 in the Mar contract that was left on Tuesday morning’s reopen.
Seasonal Snapshot: The 5yr pattern leads the choppy 15&30yr patterns gently higher until the end of February.
Soybeans:(27Dec) Today’s rally (on threatening South American weather) saw the strongest Volume in two weeks. Beans have led the strength in all three markets we track. What looked like a rounding top, a bearish pattern, last week, has now sustained its break out above the highs near 1160 in the Jan contract, right into a congestion level bound by 1170-1230. Sustained strength targets the 14Oct high at 1283.
Pay attention to the extreme Overbot conditions and the gap down to 1167 in the Jan contract that was left on Tuesday morning’s reopen. The 200-day Moving average is still falling.
Seasonal Snapshot: Consolidation in the 30yr pattern and more choppy in the 5&15 yr ends in mid Dec when all three take a more positive tone through the end of the year.
Wheat:(27Dec) There is no gap left on Tuesday’s reopen, but given the recent high correlation, one wonders how a selloff in the remainder of the sector would affect Wheat. Mar is revisiting the congestion area from 3 weeks ago.
The 200-day Moving Average has been falling for the past 3 months.
Seasonal Snapshot: The 5, 15& 30 year patterns are all generally trending positive into year end.
Interest Rates:(27Dec) The “deepening” debt crisis in Europe is driving scared money into the US Treasuries. Plain and simple.
Keeping the levels from yesterday even though there was no weakness today:
Rising trend line support on more weakness:
Mar Bonds 142-00
Mar 10yr 130-00
Fairly significant support levels remain in place for long-dated instruments
Mar Bonds- 140-00
Mar 10-Yr- 129-00
Mar 5-Yr - 122-16 (untracked)
Mar Bund- 133.30
Seasonal Snapshot: 5, 15 & 30 yr patterns in long-dated maturities’ US Treasury instruments have a short, mild upward bias, then consolidate until year end. The 2yr has a negative bias until year end, but is much more choppy.
Metals:(29Dec) More significant weakness in Gold was mitigated in late position squaring buying. Copper’s strength reflected the improving outlook for the US economy.
Since: Nov 11
#3 Jan 2, 2012
Gold:(28Dec) Today’s weakness probed below our noted support level at the 15Dec low at 1562.5, but is trying to hold on as of this writing. More weakness targets the 26Sep low at 1543.
Our Trend and Momentum indicators are still falling. Today’s Volume seems to be stronger than it has been recently, but is still muted due to the holiday market conditions. This clouds the resolution of both our previously noted bear flag formation and our symmetrical triangle pattern. That said, both patterns are starting to play out: the first projects a move down to 1390; the second down to 1325. By our standards, the market is Oversold, but with a current reading of 26 vs. the 13 measurement we had the last time it was at these levels may signal more downside is on the way.
The 200-day moving average at 1621.8 is still rising and should cap any rallies.
Seasonal Snapshot: General strength through the end of the year in the 5, 15 & 30yr patterns. The 30yr whipsaws down then up during the first two weeks of January.
Copper:(28Dec) More weakness. The pattern of lower highs and higher lows since late September also keeps the market in a symmetrical triangle formation, currently bound by 325.00 and 345.00. Our technicals point to lower action and the 200-day Moving Average is falling.
Seasonal Snapshot: All three patterns consolidate until year-end. The 15yr turns higher from 04Jan through 13Jan while both the 5 & 30yr consolidate until the end of Jan.
Softs:(29Dec) Largely a position squaring consolidation day. Low Volume.
Cocoa:(20Dec) Early action bounced March Cocoa off the important 2075 support. With all the technicals now having made the turn to a more positive bias, this market has room to run as its still coming off being the most Oversold Commodity we’ve ever seen using our measurements. We would have liked to seen more Volume, but the impending holidays and year-end squaring may be sucking the life out of this markets liquidity.
Seasonal Snapshot: The short-term 5&15 yr seasonal pattern continues its march higher until early 2013. The 30yr has entered a wide, volatile consolidation range that lasts until mid January.
Coffee:(20Dec) Coffee extended yesterday’s move but Volume barely budged. Some waning of interest is to be expected given the coming holidays. Additionally, even with the nice 2-day rally, the market still has to get through 225.00 just to get into the chart structure. This is the only Volatility on the higher than Standard Deviation list. Looks like short covering to us.
Seasonal Snapshot: The 5yr is more pronounced, but all three patterns have a positive bias until 19Dec when choppy consolidation takes over at the beginning of Feb.
Cotton:(20Dec) Easily the most disappointing of the tracked Softs. Failure is the name of this chart. Failure to make new highs and failure to settle higher. Of positive note, March didn’t make lower lows, so that’s supportive. Primary indicators are still negative. 200-day Moving Average still clearly falling.
Seasonal Snapshot: Moderate upward bias marches higher until year-end.
Sugar:(20Dec) A reasonably heavy day of Volume validate the move higher in March. Most of the best positive action and the biggest volume surge occurred immediately following the US Housing Starts data release.
A close look at the March chart action has the 2300 level showing as a significant support and resistance level; largely supportive at this point. If this level fails, materially lower levels are to be expected. The 200-day moving average (26.60) has been moving decidedly lower for a while and should cap any rallies.
Seasonal Snapshot: On 09Dec, the 5yr pattern kicked off the march higher in all three patterns until year end.
There is risk in trading futures and options. One's financial suitability should be considered carefully before placing any trades. Past performance is not indicative of future results.
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