Copper breaks $2.00!

The DEC Copper contract finally broke and closed above that magical $2.00 level yesterday. Here are my comments that were transmitted to Myra P. Saefong, Financial Writer for Marketwatch.com. this morning:

Tuesday's Metals Comments:

With a slew of economic data set for release this morning traders may see volatility rise dramatically as some key resistance levels are being tested in the Precious metals markets. DEC GOLD broke through the $500 mark in overnight trading only to get a nosebleed and turn lower. This may only be a temporary setback on this first attempt to close above key resistance but traders will be watching the numbers set for release at 8:30 EST to determine which side of the market they want to be on for the short-term. While the short-term ride may get a little bumpy there's no denying that the Precious metals complex remains in a long-term bull market and significantly higher prices are on the horizon.

Silver has one last hurdle to overcome before it kicks into high gear and sprints to the $10.00 level. Once the weekly chart resistance at $8.50 is cleared this market could explode to the upside. I have been extremely bullish on this market as it has lagged Gold's performance for quite some time. The tide may have turned and I look for Silver to make up ground quickly.

Copper is now in never, never land as it reacts to prices above the $2.00 mark. As I've been saying for what seems like forever, this market was destined to crack $2.00 and, now that it has accomplished this feat, it will be interesting to see whether the trend in Copper can continue as it has for the last 4 years. The trend is your friend until it comes to an end. For now, there seems to be no end to the major trend in Copper.


Dale F. Doelling
Chief Market Technician
Trends In Commodities

Comments on the Copper market

These comments were emailed to Myra P. Saefong, Financial Writer for Marketwatch.com, at 7:44 AM EST.

Last week, the DEC GOLD contract got a bit oversold and the market logged a string of advances in spite of the Dollar strength. But the market continues to struggle with overhead resistance as well as the Dollar's strength and, so far, has been unable to close above the $470 barrier. The daily chart suggest that the market is entering a fifth wave down which would eventually put the market somewhere south of the previous low at 456.10. Once this occurs, traders will have another tremendous buying opportunity as we head towards the New Year.

Silver continues to show resilience as it attempts to play "catch-up" with the Gold market. I'm not expecting anything spectacular from this market until Gold finally washes out and begins to rally but a retest of the $7.95 area is possible in the interim.

The trend in Copper remains positive as this market continues its march towards major psychological resistance at $2.00. Support lies just below the $1.86 level and, at least for now, the market doesn't look to be in any danger of testing that area of support. Should Copper break and close above $2.00, it would likely push prices to new highs and, in the process, bury those who are betting against this market.

Dale F. Doelling
Chief Market Techncian
Trends In Commodities


I just received this email from Myra asking for my comments.

Chinese copper trader vanishes after $800M short sale: Times By Ciara LinnaneNEW YORK (MarketWatch) -- A Chinese copper dealer has disappeared after selling an estimated $800 million of copper short, expecting the price to fall, the Times of London reported. Instead, the copper price has surged, setting a record $1.921 a pound on Monday. The Chinese State Reserve Bureau, where Liu Qibing worked, said the trader is on leave and that it had no knowledge of his dealing, the Times said. Concerns about the size of Liu's bet and his disappearance have raised concerns that the copper market is set for a trading scandal similar to the 1996 case in which a Japanese trader lost $2.6 billion for Sumitomo Corp.

My immediate response, with tongue planted firmly in cheek, is that this guy obviously has not been reading my comments on Copper. My only question is "How did this moron get put in a position to take such a position in the first place?" If anyone can give me a logical answer I'm all ears!

In case you're interested, it was the TREND FOLLOWERS who were BUYING while this guy was SELLING.

DOW Update

I remain SHORT 60 $5 DOW Futures contracts at the open today. I have placed to Day orders for my account as I am still trying to pare back my exposure even though I am extremely bearish on the Stock Index futures. My new Day orders are as follows:

BUY 10 $5 DOW futures at 10537
BUY 10 $5 DOW futures at 10527

This would leave me SHORT 40 contracts and allow me a little more flexibility in my trades as we move forward.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Thursday's Metals comments

The following Precious metals comments were transmitted to Myra P. Saefong, Financial Writer for Marketwatch.com, at 7:40 AM EST


Thursday's Metals comments

DEC GOLD is seeing some follow through from yesterday's rally but there's major trendline resistance which lies just above the current price that the market will have to overcome to turn the short-term trend positive again. Frankly, this rally leaves me unconvinced that we've seen the bottom of the recent decline. I believe that further price deterioration is inevitable and it will take consecutive closes above the 20-day MA (467.80) to change my opinion. We'll likely see the 20-day cross the 50-day MA in the next day or two and that would not bode well for Gold in the near-term.

Silver looks far more favorable technically and we may actually see a divergence between Gold and Silver where Silver is able to continue its upward momentum in the face of a continued decline in Gold. Considering that Silver has lagged Gold's performance by a large margin, a divergence in prices would not be surprising.

Copper continues to trade sideways and the longer this occurs the more traders will wonder if the market trend has entered the transition from up to down. It's way too early to speculate but the longer the market fails to make further gains the better the chance becomes that this market will suffer a serious setback.

Dale F. Doelliing
Chief Market Technician
Trends In Commodities

Bonds may need more time to form a base.

The Interest Rate futures reversed course today and finished sharply lower giving back most of the gains made on Tuesday. This does not bode well for me as I was a fairly aggressive buyer in the 10's and 30's but, considering the poor finish in the Stock Index futures today, I have to say that I'm willing to give this trade more time before I start to bail.

I traded the 10's and 30's pretty aggressively today and I'm under water in a big way. I'll need some help from stocks before the week ends or I'll have to reassess my position. I started buying the 10's first then I scaled in 4 trades in the 30's before buying more 10's. Here are the trades that I made today.

BOT 10 DEC 10 yr. Notes at 108-08
BOT 10 DEC 10 yr. Notes at 108-02 (Market closed at 107-27)

BOT 5 DEC 30 yr. Bonds at 111-20
BOT 5 DEC 30 yr. Bonds at 111-16
BOT 5 DEC 30 yr. Bonds at 111-12
BOT 5 DEC 30 yr. Bonds at 111-08 (Market closed at 110-27)

These trades leave me under water by $11,875.00 in the 30's and $6,875.00 in the 10's. This is a fairly large position for me and it could end up costing me some serious money but I'm confident that interest rates are ready to fall and that bond prices will rise. I'll exit my position in the in the 30's on a close below 110-00 and 107-16 in the 10's.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Testing resistance and selling into the rally

The DOW futures made a new intraday high but backed off when word came from overseas that terrorist attacks had killed at least 18 people. The market turned down only briefly after the news but has now fought back to trade near 10600. I've entered two new DAY orders:

SELL 10 DEC $5 DOW at 10597
SELL 10 DEC $5 DOW at 10607



If filled I will have made two intraday trades today having bought 20 contracts earlier in the day 10547 and 10537. Will the market continue to squeeze the shorts? Stay tuned!

Dale F. Doelling
Chief Market Technician
Trends In Commodities

UPDATE at 6:00 PM EST- Neither of the orders listed above were filled

More on the DOW

I entered 3 orders in the DOW this morning as there is a bias to lower prices but nothing really developing in the way of a washout in the Stock Index futures. I entered the following orders in the $5 DOW futures:

BUY 10 $5 DOW at 10547 (I was filled on this order and I am now SHORT 70 contracts.)
BUY 10 $5 DOW at 10537
BUY 10 $5 DOW at 10527

If all 3 orders are filled I will be SHORT 50 DEC $5 DOW and will hold for further profit.

I also SOLD 2 DEC GOLD at 465.10 and covered at 463.60 for $300 profit.

I have been buying some 10's and 30's in the Interest Rate futures and will update my position later.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Bonds ready to rally?

There has been a lot of talk in the pits and on the streets that some heavy hitters are gobbling up bonds by the truckload. The technical picture still remains DOWN but remember, it's always darkest before the dawn. I am a major BULL on bonds longer term and I've been waiting patiently for the first sign that we're nearing a bottom to start loading up on them. That opportunity may be at hand. Yesterday's gap up opening and strong close is the first sign that this market may be ready to turn higher. I'm going to start nibbling from the LONG side today and, if I'm right, this market could be several handles higher before the end of the year.

Remember, bonds are the best indicator that I know of futures economic conditions and, if they turn higher, the stock market is destined for much lower prices. I'm already heavily SHORT the DOW futures and I'm expecting a bloodbath soon. Bonds will be the ultimate beneficiary as the "flight to quality" begins to build.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Update on the DOW

I decided to add one last SHORT to my overall DOW position on Monday and sold 30 $5 DOW Futures at 10597. This put my total position at a nice round number - 100. Yesterday I BOT 20 at 10567 and I missed BUYING 20 more at 10537 by 1 tick. So, my current position is:

SHORT 30 @ 10597
SHORT 30 @ 10577
SHORT 20@ 10557

The market is currently trading at 10568. This position is still too large so I'll be placing orders during the day to lower my overall position to a net SHORT 50 contracts. I'll probably wait until the market opens to see what the first 30 minutes tells me before placing my orders. I'll update the weblog later this morning.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Tuesday's metals comments

The following comments were transmitted to Myra P. Saefong, Financial Writer for Marketwatch.com, at 7:52 AM EST.

The outlook for the Precious metals market is looking bleak as the technical picture continues to deteriorate. This may be a short-lived scenario but traders need to exercise caution. The 10-day MA crossed the 20-day MA on 10/24 and that was the first nail in the coffin for this market. Now the 20-day is dangerously close to crossing the 50-day MA and, should that occur, it may be some time before the market regains its footing. The DEC GOLD contract, down $25.00 from the 10/12 high, has been unable to hold above key technical support and is now in danger of giving back half the gain from July to October. Major support now lies in the 451-455 area with the 50% retracement level at 453.65. If the market should move into this support area, traders will be watching the market closely looking for signs that the decline is over and that a new leg up is about to begin. Should the market close below 451.00 I won't be surprised to see a quick retreat back to the July lows.

Silver is actually in better shape than Gold because it continues to trade above its 50-day MA. I expect the slide in this market to continue but it will probably not experience the same level of damage that Gold is seeing due to the fact that Silver has seriously underperformed the Gold market for quite some time.

Copper, on the other hand, remains the only market of the three that is maintaining a very healthy technical picture. The daily chart on DEC COPPER show this market still trading above the 10,20, and 50-day MA's and all the MA's have a positive slope. This is a very good sign that higher prices lie ahead. My only concern with this market is the fact that the momentum is beginning to deteriorate so I'll be watching for additional signs of an potential trend reversal.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Current Mini-DOW Position

My order to sell 30 DEC $5 DOW futures at 10577 was just executed. I have an open order to SELL 20 $5 Dow futures at 10527. If filled, that will be my last sell order in this market.

I will now monitor the position and see if the market breaks the way I expect it to.

Overall position in the DOW Futures:

SHORT 30 $5 Dow futures at 10577
SHORT 25 $5 Dow futures at 10557
SHORT 15 $5 Dow futures at 10497

OPEN ORDERS:

SELL 20 $5 Dow futures at 10527 STOP

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Friday Market Comments

This post was emailed to Myra P. Saefong, Financial Writer for Marketwatch.com, at 7:48 AM EST.


Friday Market Comments

The jobs report is certainly hanging over the markets as the overnight action was choppy and directionless. The Dollar maintains its upward bias against the Yen and the EURO but pre-report volatility has dried up. The Precious metals markets were surprisingly calm in overnight trading. Although I still think we have a 50/50 chance of a break down to the 100-day MA at 451.50, which also corresponds with the June/August highs, DEC GOLD has managed to work off all of its overbought condition in a few short sessions where the daily range never exceeded $10. This could be a signal that the big commodity funds are adding to their positions, not liquidating, and are in this market for the long haul. If that's the case, the selling will dry up quickly and we could see the next advance sooner than later.

Silver is much stronger from a technical perspective as the market didn't even touch the 50-day MA before turning higher. So, until the market closes below that level, which is at 7.433, this market remains positive.

With the exception of a few days in the middle of October, Copper has been a little like waiting for the sun to rise in the east every morning. It's almost been that reliable. The trend in this market is UP, UP, and AWAY!

Dale F. Doelling
Chief Market Technician
Trends In Commodities

In a follow up after the NFP report I wrote at 8:49 AM EST:

If the Dollar's response to the jobs report isn't enough to convince you of its overall strength, then nothing will. An extremely weak Employment report this morning brought the markets out of their slumber but the net effect has been a wash so far. The EURO has managed to tick up somewhat as bond prices firmed. The Precious metals may be the biggest winners so far as DEC GOLD is now trading at its best levels of the day above 465.00. Traders will be watching closely to see if this rally can hold. If momentum starts to wane, it could turn into a quick reversal leaving traders with no choice but to reverse their long positions and begin to square positions as we head into the weekend.
_________________________________________________________________

As we now know, the DOLLAR rallied sharply leaving those long metals running for the exits.

Have a great weekend.

The Dollar marches on.

There is really just one thing that means anything to the Dollar and that is the fact that the FED continues it's "measured" position on interest rates and traders take that as onward and upward for the Fed funds rate for the forseeable future. So, the Dollar continues to rally which eventually is going to cause problems for the economy. But who cares? Technically, the trend is UP for the Dollar and that's all that matters. With Dollar/Yen approaching 117.50 and the EURO breaking well below the 120.00 level today, there's no doubt about the technical condition of the Dollar. How high can the Dollar go? That's a good question. Suffice to say that, until the EURO can close back above 1.22oo, the path of least resistance is DOWN. The one caveat is the fact that, although the EURO is showing every sign of moving lower, it still has some work left before it makes a new yearly low below the 1.1870 mark. So, keep a close eye on the EURO's trading on the break below 1.1900. If the market begins to lose its conviction and begins to rally it may be a good place to BUY Euros using any close below 1.1870 as your STOP.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Back to the Futures!!

It's time to forget about Hurricane Wilma and get back to business. That is, the business of trading the futures markets. If you are currently trading any commodities and you aren't making money, please email me at dale@trendsincommodities.com. I'll be happy to discuss your current trading strategy and help you fine tune it for maximum profits.

For those of you who are new to this blog, I trade the following markets daily:

Stock Index Futures
Interest Rate Futures
Grains
Precious Metals
Cash Foreign Currencies (www.fxsol.com)

That's all I have time for and, after 20+ years of fine tuning my own approach, I've found these markets to be most favorable to my brand of trading.

So, here's my take on all of these markets. These are my positions, this is my opinion and my expectation for the markets listed above.

Stock Index Futures

I trade the DOW and the Russell 2000 futures and I remain EXTREMELY BEARISH on both of these markets. My position as of 3:30 PM EST is as follows:

SHORT 25 DEC $5 DOW at 10527

SHORT 15 DEC $5 DOW at 10497 (Last trade - 10540)

I'm slightly underwater on this position but I believe it will be short-lived. I'm looking for a break all the way back to the mid-October lows at the very least. I won't be surprised to see the DOW trading below 9500 by the end of the year. My primary (proprietary) oscillator is pegged at the most overbought (bearish) reading possible so I'm selling stock index futures like a madman. The last time the DOW futures got this overbought the market fell over 500 points. Tomorrow's NFP number, unless it really is a shocker, should have little effect on the stock market and will probably be the catalyst for an ugly end to an otherwise positive week for stocks. The memory still lingers from 1987 when an ugly Friday turned into Black Monday and the Dow fell over 500 points in a day. And that was when the market was a fraction of the level that it trades at today. So, there's my position. If you are interested in trading either of these markets real-time with me, send me an email at dale@trendsincommodities.com.

I'll bring you up to date on the other markets in my next post.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Back in the land of the (barely) living.

We have returned to Boynton Beach after spending time in Disneyworld and beautiful Clearwater Beach, Florida. If you've never been to Clearwater Beach you just don't know what you're missing. Gorgeous!

The FED raised rates, again, and that means they simply don't have a clue. The damage that has been sustained in South Florida alone will probably push the economy over the edge. Dade, Broward, and Palm Beach counties are a disaster and business, like the traffic, is at a standstill.

I stepped up and SOLD the DOW futures today at 10444 and 10464 and made a nice piece of change. I also BOT some 30 yr. Treasury futures and sold them before the close for a profit. The only position that I added to is the DEC GOLD contract. We managed to close below the previous low at 462.00 and that's bearish. I'm holding for another day just because I've seen the market do this before and it may just be a head fake. I have the luxury of going "against the grain", so to speak, because I have a huge profit in my overall position. So, let's see what tomorrow brings.

Dale F. Doelling
Chief Market Technician
Trends In Commodities