Crude Oil Trades Below, But Closes Just Above 100-Day MA

traded below but closed just above its 100 day MA on Friday, finding mild support at the 38.2% Fibonacci retracement. I continue to be bearish but I cannot rule out a bounce to $94/94.50 before selling commences again. My target on November remains $89.25. RBOB advanced nearly 2% bouncing off its 50 day MA. As long as November is under $2.85/gallon I’m bearish targeting $2.65. Same story in heating oil finding mild support at its 50 day MA just above $3/gallon. $3.16 should serve as resistance with $2.95 as my downside target. Albeit minor natural gas closed positive for the first time in 6 sessions. $2.85 in November remains my target.

Stock Indices: In the last 5 days the trading range of the S&P is just over 15 points and in the Dow it’s not much wider at 150 points. The market looks tired to me, but I will need to see confirmation to to issue a bearish trade recommendation. The first sign would be a settlement under the 9 day MA at 1448 and 13440 respectively.

Metals: For 5 days December gold has failed to penetrate $1775/ounce and the longer it does not the less likely it will on this leg. I am advising longs to book profit as the charts are signaling signs of exhaustion and a setback to come. I think it is possible to trade back under $1700 in the coming weeks. The correlations have been out of whack but imagine a stock market that sells off and a dollar that bounces. Could this not point to a correction in gold? Silver continues to tread water in a $1 trading range just under $35/ounce closing 30 cents off that level Friday. I know it is a broken record but I’m looking for a correction. I think December futures can trade back near $32/32.50 in the coming weeks. Trade accordingly.

Softs: Cocoa is approaching a $200 loss in the last 2 weeks as prices are very close to challenging the up sloping trend line that has supported prices since late June. I’m in the bearish camp expecting more selling targeting a trade closer to 2400. Sugar failed to make a new low Friday and was able to gain 1.12% in March. Bulls had had some discouraging action last week but view this as a setback and remain in the trade as long as 19.50 holds as support. Cotton lost 1.56% Friday trading back near its 100 day MA. We may get the break I had anticipated; For this to play out prices would need to break 74 cents going into the weekend…stay tuned. Coffee confirmed the leg lower is under way Friday, breaking its 100 day MA stopping at the 61.8% Fibonacci level. This depreciation should drag prices under $1.60 in the coming weeks if not days.

Treasuries: 30-yr bonds advanced again Friday grinding higher as prices should be on their way back above 149’00. Sales will be back on my radar if and when that happens for clients. 10 yr-notes spiked above their 20 day MA but backed off closing near their lows. On their highs a 50% Fibonacci retracement was completed but I still think further appreciation is to follow and would need to see 133’00 in December to re-explore bearish trade. Patient traders can nibble at December 2014 Euro-dollar bearish trades in my opinion.

Livestock: Bearish engulfing candle in December live cattle today with a loss of 0.74%. Prices failed at the 20 day MA and retreated closing near session lows. I’m bearish with a target of $1.25 on this contract. The stochastic on the daily chart supports a move lower in feeder cattle as well. In the November contact I am targeting $1.4350 in the coming weeks. Lean hogs failed to get above 75 cents for the second day running but I view this as pause and more appreciation to follow. As long as 73 cents supports remain in bullish trade.

Grains: December corn lost 1.4% but the disconcerting thing is that a triple bottom may be in the making. I’d feel better on my bearish call on a penetration of $7.40 on a closing basis in the next session. Bearish engulfing candle in soybeans and as readers know I said fade rallies. November closed almost 70 cents off their highs. This is significant as buyers were rejected and we settled under the 50 day MA on this contract for the first time since beans were trading under $13/bushel…current price is 25% above that level. I think we can see an additional 50-60 cent depreciation to follow. Wheat only lost .25% today closing at around the same level it opened. $9 should cap upside short term especially if corn and soybeans are pressured. On the downside $8.30 is my target in the December contract.

Currencies: The buck not the deer was on the move Friday gaining 0.44% as a bounce is under way. 80.75-81.00 should be challenged in the coming weeks which in theory should pressure other crosses if I’m correct. The European currencies can be sold with stops above the recent highs. My first downside targets are the follows; in the Euro at 1.2715, the Swissie at 1.0550 and finally the Pound at 1.6000. The commodity currencies can be sold vey lightly and I’d be willing to add to the trade on a close under their 20 day MAs. Wash trades in the Yen as I’m getting mixed signals from the market and the BOJ.

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