Sugar - Last week we mentioned the double top formation in the March Sugar contract and the possibility of its objective in the area of 900. We suggested short positions be considered particularly on rallies. Since the low posted last Friday at 1051 it has moved as high as 1186. It appears that the area of 1175 to 1205 provides a zone of resistance. Coincidentally, the chart also displays a potential for a double bottom if there is a close above 1300. We believe these serve as good parameters for the short position. Shorts from the sell zone should use protective stops above 1300 on a closing basis and with an objective in the area of 900. We would suggest too that longs could be placed based on that closing level above 1300 looking at a potential objective of approx 1550.
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Feeder Cattle - Last week we said, "The monthly chart of Feeder Cattle also exhibits a top formation that seems to have been confirmed as the price fell below the low of a rather long term trading range. There were multiple highs in the price range of 11870 to 11980 over the course of August 2004 and August 2007 using the monthly continuation data. The lowest low between these highs was 9210. Having now closed below the 9210 level allows us to state a suggested price objective over time down in the area of 6500. The March contract posted its low to date last Friday at 8420 and has begun the process of a rally. We see retracement resistance levels of approx. 9060; 9265 and 9465. We believe a sell area falls between the 9265 and 9465 resistance levels and if entered short on this basis stop protection is suggested on a close above 9550. That would put it above the third resistance level, the 50 day moving average (currently 9556) and a significant downtrend line. This also causes us to amend what we said last week regarding 9310 being the price level which would negate this trade idea. It becomes 9550. |
Silver - Silver remains within its trading base from 851.00 to 1077.50 basis the March contract. It has though, closed above its 50 day moving average with Wednesday's close for the first time since August. We would believe that those interested in the long side of silver could use a close above 1077.50 as a signal to enter. Nearest retracement resistances remain approx 105800 (hit), 112200 and 118650. Remember to implement trade management strategy for any positions entered.
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Gold - Last week we mentioned that February Gold would likely have resistance in the 842 - 845 area. A close above 83450 would now activate a target of approx. 851. The three series of retracement resistance levels remain approx.: 78320 (hit), 81290 (hit), 84260; 80600, 84250, 87900 and 82380, 86600; 90800.
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 Euro Currency - The currency futures have rolled over to the March contract so we shall now turn our attention there as well. The euro currency has broken out to the upside of the broader pattern we mentioned last week. This pattern breakout provides price objectives of approx. 13701 and 13865 using either a conservative or more aggressive measurement. With the breakout the March euro futures have already, within 2 sessions, hit all three of its first series of retracement resistances. They were approx.: 12894; 13061; 13229. The next series in play are approx. 13285; 13576; 13865. Using the July high and the October low produces retracement resistances of approx.: 13635; 14030; 14430. If long based on the breakout it seems a close below 13050 would be a signal to exit longs. We urge, as always, implementing money management strategy.
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| Canadian Dollar- As promised we are switching our attention to the March contract. We have been talking about a double bottom potential forming in the Canadian Dollar the past few weeks. The picture has been made a bit more complicated as it has now made a third low in the price area of 7700 basis the March contract. The three lows are: 7727; 7700; 7693. The entire pattern that began back in late October is another triangle formation and this week did see a breakout to the upside. Our conservative measurement suggests a price objective of approx.8560 while the more aggressive measurement yields approx. 8890. There are also now two separate double bottom possibilities where a close above 8254 produces an objective in the area of 8800 and where a close above 8705 produces an objective in the area of 9675. As we write the March Canadian Dollar is trading 8204. The first series of retracement resistance levels are approx. 8075 (hit); 8196(hit); 8315. There is another series at approx. 8125; 8260; 8400 and then approx. 8460; 8700; 8940.
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Chicago Wheat - March Wheat set a new low for the move on December 5 at 471. We see no reason to alter our view that the bigger picture for wheat suggests lower prices. Since setting this low there has been a minor retracement rally to today's current 516.75 high (as we write the market is still open). We view the rally as temporary and shall present another selling opportunity. There are a number of retracement series' of which the two nearest have resistance levels of approx.: 523.25; 539.50; 555.00 and 589; 625.25; 661.50. The near term extension targets that are in play remain 447 and 412. We will update all levels as the market move continues to develop. |
 S&P 500 - This week we switch coverage over to the March contract of the emini S&P. We mentioned last week the formation of a downwardly sloped trading channel and the market remains inside its confinement although the upper end is being tested. It also coincides nicely with the downwardly sloped 50 day moving average which currently is 91375. The low end is approximately 69000 and decreasing. A breakout of either side should present a very reasonable trading opportunity. Retracement resistance levels we feel significant right now are approx.: 86125(hit); 90100(hit); 94000 and approx. 95775; 102600; 109400. There are extension targets remaining active to the downside that are approx. 71250 and 65000. A close above 100650 negates these downside targets. On the upside there are near term extension targets that are active at approx. 90900(hit) and 92975.
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Soybeans - Soybeans established a new low Friday December 5 at 779.25. Since that low the March soybeans have proceeded with a small rally thus far to today's high of 869 as we write. We see the big picture remaining bearish and view rallies or new lows as selling opportunities. Near term retracement resistance are approx.: 861; 886.25; 911.5 and 954.5; 1009.25; 1064. There are active extension targets of approx. 750 and 698.
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 Bonds / Notes - In last week's edition dated December 4 we said, "As we write today March T-Bonds are trading above 134-00.0. These are unprecedented prices we are seeing. We see another count to approximately 136-00.0 and other than that there is a long term channel on the monthly continuation chart which shows the high end of that currently being more like 136-16.0." The high as of today December 11 basis the front month(December contract) has been 136-03.0. There has now also been a small double top formation made and a close below 132-01.5 should provide confirmation. The objective would be in the area of 129-00.0. The nearest series of retracement support levels are approx: 130-18.0; 129-05.0; 127-24.5. A new high above 135-02.5 will negate these and the double top potential. In the March 10-yr Note contract there is a reversal day bar that is in effect. There appears to be a bear flag possibly being formed. If looking for short side entries stop protection should be above the 124-20.5 high. Another approach would be to allow further development and sell weakness at a determined break-down point. We will watch for that also as it may develop.
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Coffee - The extension target at 103.55 was hit leaving the 9935 still active for now. Retracement resistance levels are approx.: 11115(hit); 11395; 11675.
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| Crude Oil - Like so many of the markets we cover the January crude oil hit its low for the move on December 5 at 4050. The most near term retracement resistances show the first two being hit. They are approx: 4620(hit); 4805(hit); 4995. We see the next series of resistance levels at approx.: 5230; 5615; 5995. There was one target reached this week at 4295 leaving 3665 active. We believe this level also lines up with a price objective of a H&S pattern formed on the daily chart. However, after a more than a 100.00 per barrel drop maybe this is close enough, although we would do not believe there has been any indication this 4050 low for the January contract marks the ultimate low. |
