FuturesCom Bi-Weekly Investment Outlook # 429 August 25 2013 SP500 and Equity Indices • Bonds • Currency Trading • Forex • Precious Metals • Energy • Grains • Livestock • Coffee • Sugar • Cocoa • Cotton. Free Two Week Trial see https://futurescom.com/free-trial-2
“We can easily forgive a child who is afraid of the dark.
The real tragedy of life is when men are afraid of the light.”- Plato
Saturday August 24, 2013
5:00 AM South Florida Beach Time
Activity in most US markets will take a back seat to the U.S. Labor Day Holiday which arrives on September 2nd. Traders should stay tuned for additional flashes and updates for all markets. The US Stock markets acted sloppy against upper levels of resistance. Then fell thru nearby support and have produced bearish signs, showing uncertainty as to when the Fed will begin to taper and who will be the next Fed Chairman. Stock and Index Traders should remain nimble and look for increased volatility ahead over the next two months in preparation for October and November which are typically the best times of the year for buy and hold strategies in equities. Long term yearly technical patterns for US Stock Index Averages remain friendly. However recent action has been sloppy and the long term work does not preclude a severe downturn. Traders as well as investors need to be aware of this. Traders should stay tuned for Day Trade Flashes, BW Flashes and Updates. Expect a two way stock market for now. The Long Term technical work for 30 Year U.S Treasury futures is still on the bearish side.
Previous Bi-Weekly Outlooks have gone over some overseas markets long term. Globally, creeping protectionism in the form of capital control suggestions are starting to show up in a variety of places (including last week’s Jackson Hole meetings) to offset flight of money for one reason or another. If you need detailed analysis regarding overseas equity markets, please call the office or email a request.
The US Dollar has seen erosion and the Euro is pressing against the 13340 to 13460 region.
However EU debt problems are not over and the long term remains negative. A weaker Euro is eventually positive for exports and the EU finance ministers know it. If the Euro can clear the 13460 region, the upside target is 13770 to 13830. If the Euro fails to hold 13340 a test of 13220 and 13100 to 13040 should not be ruled out. Foreign exchange traders should continue to consider the Japanese Yen futures as a trading affair. Long term spot USD/JPY remains bullish (bearish for Yen Futures) the emphasis should now be accumulation on the long side for spot. Futures Traders should look to sell a rally in Sep and Dec Futures. Forex traders should continue to nibble on the Spot Dollar /Yen. Cable is range-bound trading affair. The Canadian Dollar, Aussie Dollar and Kiwi all are weak. Stay tuned for Forex Flashes for new trades in Forex.
Crude Oil acted lousy early last week, especially with all the Fed tapering chatter, capital control talk, sinking offshore markets etc. Prospects for an increase in Chinese demand along with ideas that tapering will be less than expected helped crude oil recover to close near its upper end of trading on Friday. A stable recovering US economy and geopolitical uncertainties such as movement of Navy vessels are becoming more supportive. Weather can also come into play during the peak tropical weather season directly ahead. Crude Oil prices have at times not peaked until late August and well into September. Over the long term prices can accelerate and investors and traders should not be surprised to see higher prices. Heating Oil prices can firm into the end of August and beyond.
Traders should get back long and possibly remain long for the duration of the winter. Unleaded gas acts better and traders should trade it from both sides to take advantage of price volatility.
Gold and Silver along with Copper are showing recovery. Precious metals are volatile and lower on the year. If year-end price levels are achieved acceleration to higher levels may occur. Expect more volatility in gold and silver and stay tuned for flashes. Traders should buy dips. Supply / Demand data along with better than expected Chinese Data was deemed friendly for commodities and related assets. We took the loss on Short Copper. Look for a range bound copper trade.
Soybeans closed sharply higher on Friday. Late August hot weather at a critical time for soybean development is seen as bullish for the late planted soybean crop and has provided the fuel to propel beans higher. Corn has firmed a bit also, Wheat has lagged. South American Soybean planting should begin soon, along with US harvests over the next month. On Sept. 12, the USDA will release their monthly crop reports. Numerous private crop estimates are coming out along with a variety of crop tours that are taking place all of this will add to volatility. If a cold snap occurs and early frost or freeze fears materialize traders should keep an eye on Soybean Oil. Oil content in the plant can be sharply reduced under those circumstances. Live Cattle fell back last week. Remain long and buy dips and look for the back end of cattle to improve over the front end. Friday’s USDA Cattle on Feed report should be viewed as friendly for December and the farther out contracts in Cattle. Buying Feb Hogs at the end of August tends to make money over the next few weeks. However traders should look for a range bound pork market. Cash Prices are still well above the futures and those levels should converge somewhat where cash dips a bit and some firmness in Hogs begins to develop. Reports of Russian demand for Pork helped reverse sharp losses on Friday in Lean Hogs. This coincides with tensions in Syria and movement of Naval Vessels by the US closer to the Syrian ports where Russia has a presence. Expect back and forth grain and livestock activity. Trading that is more suited for day trading and medium term trading. Stay tuned for BW Flashes as well as day trades.
U.S. coffee consumption tends to rise in the winter and should aid coffee prices in late fall and early winter. Technically Coffee is a mess and is at or near contract lows. Seasonally coffee tends to act far better in September thru November and December and into springtime. We remain friendly for now. Well-heeled traders can probe the long side and look for perhaps higher prices into late winter and early spring. Cocoa is up on the year, cocoa should be still be considered a trading affair with a broad range on top of 2758 to 2775 and on downside buying regions can come in at 2322 to 2315. Cocoa is overbought and dip cannot be ruled out, but Cocoa is higher on the year and that’s friendly.
Sugar supplies are still large and continue to overhang market. Seasonally sugar tends to bottom in August thru September and acts better into year end. Traders should not be surprised to see more of a range bound trade and higher levels. We were bearish sugar (and coffee) at substantially higher prices last year (and before that) and have no real interest in aggressively shorting. Any new buying for the medium to longer term should be shifted to March Sugar. Cotton had a wild up and down market, our buys were not hit two weeks ago and we did not chase it up. Commodity Funds and speculators who did chase cotton were hardly able to exit the trade once it broke down as prices collapsed rapidly. Nevertheless Cotton is higher on the year and fell back to broad based support and is now a trading affair as it backs and fills, some things never change.
Traders should stay tuned for Day Trade and BW flashes and Updates for all markets.
No change in current posture. Onto the Nitty Gritty
THE SENSATIONAL STOCK AND BOND MARKET
DOW JONES INDUSTRIAL AVERAGE
Support should appear near 14,960.00 to 14,840.00 and has so far contained a decline.
Below that a test of the 14,590.00 to 14,530.00 is likely to occur.
Resistance should appear near 15,290.00 to 15,350.00 and the 15,690.00 to 15,760.00 region.
SEPT E-MINI SP500
Resistance should appear near 1672.00 and the1689 to 1696 region. Beyond that sellers should appear near 1731.00 to 1738.00.
Nearby Support should appear near 1655.00 to 1642.00. Below that buyers should appear near 1628.50 and 1615.00 to 1609.00.
NASDAQ COMPOSITE
Resistance should appear near 3663 to 3682, beyond that a test of 3734.00 to 3743 is likely and should cap a rally for a bit.
Support should appear near 3623 to 3613 and 3563.00 to 3553.00 .
SEPT E-MINI NASDAQ 100
Support should appear near 3102.00 to 3092.00 and 3045.00 to 3036.00. Traders can buy at 3103.00 and risk a close under 3087.00 for three days in a row. Below that buyers should appear near 3045.00 to 3036.00.
Resistance should appear near 3148.00 to 3157.00 region. Where sellers should appear and cap a rally. Beyond that a test of 3194.00 to 3213.00 is likely.
SEPT E-MINI RUSSELL 2000
Resistance should appear at 1047.00 and the 1058.00 to 1068.00 region which should cap a rally
Support should appear near the 1036.00 to 1032.00 region. A close under is negative and augurs for a test of and 1013.60 to 1010.40. Stay tuned for Index Flashes.
DEC 30 YR BOND
Resistance should appear near 131-07 and 131-21 and 132-07. Beyond that sellers should appear near 132-21 and 133-07 which should cap a rally.
Support should appear near 129-21 and 129-07. Below that a test of 128-21 is likely. Below that a test of 127-21 and 126-07 is likely.
DEC 10 YR NOTE
Resistance should appear near 124-07 and 124-21. Beyond that sellers should appear near 125-21 and 126-07 which should cap a rally.
Support should appear near 121-07 and 120-21. Below that support should appear near 119-21
THE FRENZIED FOREX FRONT
SEPT DOLLAR INDEX
Resistance should appear near 8194 to 8223. Beyond that sellers should appear near 8300 to 8314.
Support should appear near 8044 to 8029 region. Below that a test of 7954 to 7929 is likely.
SEPT JAPANESE YEN
Resistance should appear near 10187. Traders can sell at 10182 and hold for lower prices.
Beyond that sellers should appear near 10237 and the 10320 to 10360 region and cap a rally.
Support should appear near 10136 to 10104, a close under is negative and augurs for a test of 10034 to 10021 and the 9937 to 9921 region. Traders should go short if a close under 10101 occurs
SEPT EURO CURRENCY
Support should appear near 13340 then 13265 and 13220. Below that buyers should appear near the 13100 to 13040 region.
Nearby resistance should appear near 13400 to 13460, beyond that a test of 13610 is likely with sellers appear near 13770 to 13830
SEPT SWISS FRANC
Resistance should appear near 10960 to 11010, beyond that a test of 11300 to 11360 is likely to occur and should cap a rally.
Support should appear near 10820 and 10750, a slip under is negative and indicates a test of 10680 to 10580 which should hold.
SEPT BRITISH POUND
Support should appear near 15525 and the 15350 to 15290 region. Traders can buy at 15527 and risk a close under 15487 for three days in a row.
Resistance should appear near the 15690 to 15760 region. Beyond that sellers should appear near 16090 to 16150 and cap a rally.
SEPT CANADIAN DOLLAR
Resistance should appear near 9525 to 9546 and 9625 to 9641.
Support should appear near 9445 to 9429, below that a test of 9347 to 9316 is likely.
SEPTEMBER AUSSIE DOLLAR
Support should appear near 8964 to 8934 and the 8871 to 8856 region.
Resistance should appear near 9044 to 9060 and the 9140 to 9156 region.
Beyond that sellers should appear near 9235 and 9416 to 9347
THE PRECIOUS METALS
DECEMBER GOLD
Resistance should appear near 1415 to 1421, a close over is friendly and augurs for a test of
1453 to 1459.
Support is near 1383 to 1377 then 1361.5 and the 1346 to 1334 region.
DEC COPPER
Resistance should appear near 33770 to 33860. Beyond that sellers should appear near 34250 to 34430 which should cap a rally.
Support should appear near 32750 to 32610 and the 32130 to 31940 region, failure there augurs for a test of 31570 to 31480.
DECEMBER SILVER
Support should appear near 2370 to 2354 and the 2322 to 2315 region. Traders can buy at 2327 and hold for higher prices. Below that 2275 to 2267 should hold.
Resistance at the 2411 to 2419, a close over is friendly and augurs for a test of 2461 to 2469 and eventually the 2511 to 2519 region. Beyond that a test of 2552 to 2568 is likely.
THE EXCITING ENERGIES
OCT CRUDE OIL
Resistance should appear near 10680. A close over is friendly and augurs for a test of 10815 and eventually the 10960 to 11010 region.
Support should appear near 10470 and 10360 to 10320. Below that buyers should appear near 10136 to 10104 and the 10037 to 10021 region.
Stay tuned for flashes
OCT HEATING OIL
Support should appear near should appear near 30920 and the 30450 and 30360 region.
Below that 29900 to 29720 should hold.
Resistance should appear 31480 to 31570, beyond that a test of 31940 to 32130 and the 32610 to 32700 region is likely. Stay tuned for flashes
OCT UNLEADED GAS
Support should appear near 28290 to 28200 and the 28290 to 28200 region.
Resistance should appear near 29280 to 29370 and 30360 to 30450.
OCT NATURAL GAS
Resistance should appear at 3613 to 3623, beyond that a test of 3662 to 3682 and the 3858 to 3867 region is likely.
Support should appear near 3442 to 3425 and 3328 to 3319 which should hold.
THE GRANDE’ GRAINS
NOV SOYBEANS
Support should appear near 1310 to 1304. Below that 1274 to 1268 should provide support and contain a decline prior to any crop reports.
Resistance should appear near 1377 to 1383. Beyond that sellers should appear near the 1415 to 1421 region and should provide resistance and a good place to hedge some crop.
Trade accordingly.
DEC SOYOIL
Resistance should appear near 4370 to 4381, a close over is friendly and augurs for a test of 4425 to 4426. Beyond that Sellers should appear near 4503 to 4514.
Support should appear near 4183 to 4163 and the 4056 to 4046 Region. Below that 3992 to 3982 should contain a decline.
DEC SOYMEAL
Resistance should appear near 430.4 to 431.5 and the 442.5 to 444.6 region. Beyond that sellers should appear near 457.1 to 458.2 and cap a rally.
Support should appear near 405.6 to 404.6 and the 399.2 to 398.2 region, below that buyers should appear near the 386.7 to 385.8 region and contain a decline.
DEC CORN
Support should appear near 458 ¼ to 457 ¼ and the 431 ½ to 430 ¾ region.
Resistance should appear near 477 ¾ to 478 ¾, beyond that a test of 491 ½ to 493 ¾ should bring out sellers. Beyond that a test of 505 ¾ to 506 ¾ is likely
DEC WHEAT
Resistance should appear near 665 ¾ to 667 ¼ and 674 ¾ to 675 ½.
Support should appear near 643 to 641 ¾ and the 635 to 633 ¾ region.
THE LIVELY LIVESTOCK
OCT CATTLE
Support should appear near 12607 and 12537. Below that buyers should appear near 12447 and the 12380 to 12320 region.
Resistance should appear near 12740, a close over is friendly and augurs for a test of 12817. Beyond that sellers should appear near 13040 to 13100.
DEC CATTLE
Support should appear near 12967 and 12892. Below that buyers should appear near 12740 to 12680
Resistance should appear near 13040 to13100. A close over indicates an eventual test of 13340 to 13460.
OCT HOGS
Support should appear near 8407 to 8392 and the 8317 to 8302. Below that a test of 8222 to 8192 and the 8047 to 8027 region is likely and should contain a decline.
Resistance should appear near 8557 to 8587 and the 8667 to 8682 region. Beyond that a test of 8777 to 8762 is likely.
DEC HOGS
Support should appear near 8137 to 8117 and the 8048 to 8027 region. Below that buyers should appear near 7957 to 7932.
Resistance should appear near 8392 to 8407 and the 8482 to 8492 region.
FEB HOGS
Support should appear near 8407 to 8392 then 8317 to 8302 and the 8222 to 8192 region.
Resistance should appear near 8557 to 8587 then 8657 to 8587 and the 8667 to 8682 region.
THE SATISFYING SOFTS
DEC COFFEE
Support should appear near 11690 to 11640. Failure there augurs for a test of 11360 to 11300 and should contain a decline.
Resistance should appear near 11920 to 12030 and the 12680 to 12740 region. A close over is friendly and augurs for a test of 13040 to 13100.
DECEMBER COCOA
Resistance should appear near 2511 to 2519 and the 2552 to 2588 region. Beyond that sellers should appear near the 2612 to 2620 region and cap a rally. Traders can sell at 2611 and risk a close over 2677 for three days in a row.
Support should appear near the 2419 to 2411 region. Below that buyers should appear near 2370 to 2354. Traders can buy at 2377 and risk a close under 2312 for three days in a row. Stay tuned for Flashes
OCTOBER SUGAR
Resistance is near 1689 to 1696 and 1731 to 1738 region, beyond that a test of 1774 to 1780 is likely.
Support should appear near 1615 to 1609 and 1576 to 1569.
DEC COTTON
Support should appear near 8314 to 8300 and 8044 to 8029. Below that 7777 to 7763 should contain a decline.
Resistance is 8668 to 8683 and the 9044 to 9060 region. Beyond that sellers should appear near 9140 to 9156 and cap a rally.
Stay tuned for Flashes and Updates in all Markets
–A Ship in Harbor is Safe…But that is not what ships are built for –
Happy Trading!
Bill wil@futurescom.com
Sunday August 25, 2013 8:30 AM South Florida Beach Time
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