Coming off of last week’s two day OPEC + Russia meeting where the decision was to pull 1.2 million barrels of oil daily from the markets, Light Sweet Crude has begun to show strength. The proof of this agreement will however ‘be in the pudding’, as we wait to see if each of the parties involved, uphold their end of the agreement.
Over the past couple of weeks, Crude has tested the $50 level but failed to close below it. Therefore from a trading standpoint we are looking for a breakdown below $50 or a meaningful push above the $55 level.
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.