On the back of recent weakness, we are watching for a conviction break below 3.13 in the July Wheat Contract.
This past week equity markets rose as the underlying S&P index climbed 2.20 %. Above, the September S&P futures contract rose 1.92% for the week. During this rally we were able to step-in for a quick day-trade on Tuesday and a 3.4% gain.
Moving forward we still believe bias remains strong, for a downward move and therefore, we are poised for a short-term downward move.
Oil made a big move this week on the back of tensions in the Middle East. The August contract, pictured above, was up 8.83% for the week. We are currently Long the August contract from $55.50.
Although, we believe the longer term trend in Oil is upward, it would not be surprising to see some consolidation occur this week. We will be looking to remain with our current trade, with an eye towards protecting our current open-profits.
It was an active week in the Gold market as the August contract, pictured above, moved up 4.14%. This move was in conjunction with a rise in world tensions. We entered three trades this week in gold with the first two being closed-out at break-even while the third resulted in a 7.5% gain.
We like the strength Gold has been showing recently and we are looking for continued strength in the week ahead.
Agricultural futures were Flat to Lower this week as September Wheat, pictured above, was off -2.08% and November Soybeans climbed a very modest .42%. We were not active in these markets this past week.
Going forward next week, we are looking for further declines as the spring planting season gives way to the summer growing season.
Have a great week in the markets!
Since hitting $1230 on October 11th, Gold has shown support @ the $1220 level. We attribute this move to instability in the equity markets as well as recent political events which have sparked a flight to security. We will continue to monitor this market for a trade to the Upside.
Amid Poor export numbers and surplus stocks; Corn, Soybeans and Wheat have begun to consolidate with a downward bias. In December Wheat, (pictured above), support and resistance are 505 and 527 respectively. Unless we see positive export news, we expect to see Corn, Soybeans and Wheat to trend lower.
Given the magnitude of last week’s decline and the lack of follow-through in the recovery on Friday, there is potential for further market decline. With this in-mind we will be watching downward momentum early in the trading session, to gauge the potential for further profitable trades from this market correction.
This week the EIA (Energy Information Administration) reported 1.9 million barrels were added to supply which surprised the market who expected a draw-down in supply. Despite this, we remain Long November Crude as our expectations are that prices will continue their upward march, as the Iranian sanctions soon take effect.
We have remained Short Silver as it has recently entered congestion. If it breaks above this area of congestion we will close-out and take profits; otherwise, if it breaks to the downside, we’ll let this trade continue to run.
Ahead of today’s Fed decision, Tuesday was a volatile day as volumes were low and we saw an early day rally fizzle-out. We remain Long the S&P with the market having already baked-in a rate hike today.
Having gone Short earlier this month, we remain Short Treasuries, going into today’s Fed meeting. Despite recent consolidation, we see this market continuing it’s downward move.
Despite trading higher last week, Soybeans continue to be influenced by the pall of tariffs. Even with this over-hang however, due to the degree of the recent sell-off, beans remain at over-sold levels.
We are currently Flat this market but will re-enter if the current area of congestion (8.12 – 8.55 ) can be broken-through.