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.
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.
It was a volatile session Thursday in the Crude market as the November contract reached new Highs of 71.35 before falling back and Closing at 70.32. Much of this volatility is likely due to traders squaring positions ahead of this Sunday’s OPEC meeting in Algeria and the Baker Hughes rig count due out later today.
We continue to trade this market to the Long side.
The S&P continues to march upward, approaching new highs, on the back of a strong US economy. We are trading the December contract upward with stops near the support level of 2870.
December Corn declined to reach new lows amid recent news of over-abundance of stock and the commencement of US harvests. Despite this decline however farmers are reluctant to sell below $3.50, the level at which they earn an acceptable return for their product.
Although we remain short this market, we expect to see a bounce in this market as supply continues to dry-up at these low price levels. Given the degree to which this market has sold-off, a bounce may occur with even the slightest hint of positive news. If this occurs we will consider taking profits and riding the Long bounce.
