I've been looking for a place to get long the grains and I think the time has come. Let's look at what has happened in the Corn market, which happens to be one of my favorites, and I'll show you how I analyze the market from a trend follower's point of view. One thing that I'm always looking for in my analysis is divergences. This is where a market makes a new low but a technical indicator that I'm using fails to make a new low. This can many times signal that a reversal could be imminent. Looking at the daily chart and using the Williams %R oscillator, the divergence is obvious. The Williams %R bottomed with a reading of 98.00 on August 11th with the market trading at 241 3/4. The market made a new contract low at 233 1/2 and closed at 235 3/4 on 8/18 and the oscillator reading was 93. Here's the divergence that I was looking for. I BOT DEC CORN MOO on Monday, August 21st at 236. To translate, I bought the December Corn contract at the market on the open (MOO) and was filled at a price of 236. The market closed the session at 237 1/2, up 1 3/4 cents on the day or a gain of $87.50 per contract from the prior day's close. If I'm right and this signal is validated by further gains then Corn should rally from this point to at least the first resistance area at around 248. That would give me about $550 profit per contract. With the current margin for Corn at $608, that would give me a cash on cash return of over 90% if the market reaches the area of resistance at 248.
Dale F. Doelling
Chief Market Technician
Trends In Commodities
Tuesday, August 22, 2006
Wednesday, August 16, 2006
Wednesday's Precious metals commentary
The following comments were sent to Myra P. Saefong, Financial columnist
at Marketwatch.com at 9:44 AM EDT.
______________________________________________________
The Dollar is starting to resemble Rocky Balboa this week. It takes a
terrific beating with every release of economic news but it finds a way to
get back on its feet to fight another round. The short-term trend in the
Dollar v. the Yen is getting a little shaky with trendline support at 115.40
Yen being critical if the greenback is to continue this recent rally. The
Gold traders are still scratching their heads wondering how long this choppy
environment will last. With no real direction it's a very tough trading
environment and, for what it's worth, I still think the metals complex has
some work left on the downside before it finds a bottom. These are
definitely the "dog days" of summer. Still, the fact that the housing
sector has fallen into a coma, the long-term effects will soon become
apparent and the Dollar will suffer from the fallout. As this scenario
unfolds, it should bring stocks to their knees and provide metals traders
with plenty of incentive to move Gold and Silver to new all-time highs
eventually.
Dale F. Doelling
Chief Market Technician
Trends In Commodities
at Marketwatch.com at 9:44 AM EDT.
______________________________________________________
The Dollar is starting to resemble Rocky Balboa this week. It takes a
terrific beating with every release of economic news but it finds a way to
get back on its feet to fight another round. The short-term trend in the
Dollar v. the Yen is getting a little shaky with trendline support at 115.40
Yen being critical if the greenback is to continue this recent rally. The
Gold traders are still scratching their heads wondering how long this choppy
environment will last. With no real direction it's a very tough trading
environment and, for what it's worth, I still think the metals complex has
some work left on the downside before it finds a bottom. These are
definitely the "dog days" of summer. Still, the fact that the housing
sector has fallen into a coma, the long-term effects will soon become
apparent and the Dollar will suffer from the fallout. As this scenario
unfolds, it should bring stocks to their knees and provide metals traders
with plenty of incentive to move Gold and Silver to new all-time highs
eventually.
Dale F. Doelling
Chief Market Technician
Trends In Commodities
Tuesday, August 15, 2006
Here's the mid-month commodities update
Here's a new feature for all of you. We'll be providing you with an update on all the markets we cover on the 1st and 15th of the month. Here's the mid-August update:
Stock Index futures:
SEP DOW futures contract began the month at 11230 and settled today at 11248.
SEP RUSSELL 2000 contract began the month at 704.60 and settled today at 699.30.
SEP NIKKEI contract began the month at 15435.00 and settled today at 16020.00.
This simply shows us that Foreign markets are outperforming our markets and, within our markets, the small caps have weakened vs. the Big Cap stocks but, frankly, the markets have done nothing but churn over the last two weeks. I think you know my opinion on the Stock Index futures. SELL all rallies. I think today's market action was probably a selling oportunity.
Grains:
SEP CORN began the month at 239-0 and settled today at 222-0
SEP WHEAT began the month at 397-4 and settled today at 376-6
SEP SOYBEANS began the month at 585-4 and settled today at 556-4
Here's a group that has been creamed of late. Is there a bottom in here somewhere? I think so but I've never been a fan of catching falling knives. I'm going to stand aside for now but I'll be watching these markets very closely for any sign that a rally is about to occur.
Currencies:
SEP DOLLAR INDEX began the month at 85.09 and settled today at 85.05.
Although the Dollar has seen some strength over the last two weeks vs. the Yen the rest of the currencies have been relatively flat. I've been a buyer of the Dollar vs. the Yen since it bottomed on August 4th. But the longer-term outlook is highly suspect and a possible head andn shoulders top in beginning to form on the daily chart. With today's PPI number taking the steam out of the recent rally it's highly likely that the rally has peaked.
Energy Complex:
SEP CRUDE OIL began the month at 74.40 and settled today at 73.03
SEP UNLEADED GAS began the month at 221.18 and settled today at 200.25
SEP NAT GAS began the month at 8.211 and settled today at 7.025
SEP HEATING OIL began the month at 2.0376 and settled at 2.0275
I've been very bearish on Crude Oil and Unleaded Gas but mildly bullish on Nat Gas. I put on some LONG NAT GAS/SHORT CRUDE spreads on July 24th, I've taken my profits already. This area should continue to work lower as the "fear premium" gets wrung out. Also, demand is deteriorating which should continue to pressure the Energy complex.
Interest rates:
SEP 30 yr. BONDS began the month at 108-09 and settled today at 108-23
SEP 10 yr. NOTES began the month at 106-010 and settled today at 106-090
I've been LONG bonds for a while now and, although the PPI numbers released today were rather tame, I just don't know whether there will be a lasting affect on the markets. The 10 yrs. have rallied over 2 1/2 points since the low was made in late June. The markets haven't retraced enough for me to exit my LONG positions but I'll need to see some real follow-through over the next couple of sessions to keep my position intact.
Meats:
AUG LIVE CATTLE began the month at 83.72 and settled today at 87.75
AUG LEAN HOGS began the month at 68.55 and settled today at 71.75
I don't trade the MEATS very much but they've been on a tear recently. LIVE CATTLE, since bottoming in April, has rallied 20%. LEAN HOGS have been a little more volatile but have logged some significant gains since April. If you have the stomach for these markets power to you.
Precious Metals:
OCT GOLD began the month at 640.40 and settled today at 628.30
SEP SILVER began the month at 1137.0 and settled today at 1212.5
SEP COPPER began the month at 357.00 and settled today at 351.50
We've had a bit of a mixed bag in these markets with GOLD and COPPER lower and SILVER higher. I think we have more work to do to the downside in the short-term but I'm still a MAJOR BULL longer-term. BUY the dips in GOLD and COPPER for now.
Softs:
OCT COTTON began the month at 53.45 and settled today at 53.35
SEP FCOJ began the month at 169.25 and settled today at 172.50
SEP COFFEE began the month at 99.35 and settled today at 102.85
OCT SUGAR began the month at 14.91 and settled today at 12.79
SEP COCOA began the month at 1486 and settled today at 1524
OCT LUMBER began the month at 273.00 and settled today at 265.80
These markets are always interesting and the last two weeks have been no exception. Cotton is the same price it was 2 years ago. One of two markets that are really worth taking a look at, OJ has been one of the truly stellar performers and has been on a tear since it bottomed in May of 2004. Coffee could very well work its way back to the 90 cent level soon. Sugar ain't been real sweet lately since it failed to break the 20 cent mark at the beginning of the year. Cocoa rallied sharply in late June and into July but has now fallen back into the previous trading range. Lumber is the other market worth looking at and I've been SHORT this market simply because I think there's a lot of bloodletting that will take place in the housing markets over the next 18-24 months. If you can handle trading LUMBER stay SHORT for further gains.
That's the update for mid-August. If you have any questions email me a dale@trendsincommodities.com.
Dale F. Doelling
Chief Market Technician
Trends In Commodities
Stock Index futures:
SEP DOW futures contract began the month at 11230 and settled today at 11248.
SEP RUSSELL 2000 contract began the month at 704.60 and settled today at 699.30.
SEP NIKKEI contract began the month at 15435.00 and settled today at 16020.00.
This simply shows us that Foreign markets are outperforming our markets and, within our markets, the small caps have weakened vs. the Big Cap stocks but, frankly, the markets have done nothing but churn over the last two weeks. I think you know my opinion on the Stock Index futures. SELL all rallies. I think today's market action was probably a selling oportunity.
Grains:
SEP CORN began the month at 239-0 and settled today at 222-0
SEP WHEAT began the month at 397-4 and settled today at 376-6
SEP SOYBEANS began the month at 585-4 and settled today at 556-4
Here's a group that has been creamed of late. Is there a bottom in here somewhere? I think so but I've never been a fan of catching falling knives. I'm going to stand aside for now but I'll be watching these markets very closely for any sign that a rally is about to occur.
Currencies:
SEP DOLLAR INDEX began the month at 85.09 and settled today at 85.05.
Although the Dollar has seen some strength over the last two weeks vs. the Yen the rest of the currencies have been relatively flat. I've been a buyer of the Dollar vs. the Yen since it bottomed on August 4th. But the longer-term outlook is highly suspect and a possible head andn shoulders top in beginning to form on the daily chart. With today's PPI number taking the steam out of the recent rally it's highly likely that the rally has peaked.
Energy Complex:
SEP CRUDE OIL began the month at 74.40 and settled today at 73.03
SEP UNLEADED GAS began the month at 221.18 and settled today at 200.25
SEP NAT GAS began the month at 8.211 and settled today at 7.025
SEP HEATING OIL began the month at 2.0376 and settled at 2.0275
I've been very bearish on Crude Oil and Unleaded Gas but mildly bullish on Nat Gas. I put on some LONG NAT GAS/SHORT CRUDE spreads on July 24th, I've taken my profits already. This area should continue to work lower as the "fear premium" gets wrung out. Also, demand is deteriorating which should continue to pressure the Energy complex.
Interest rates:
SEP 30 yr. BONDS began the month at 108-09 and settled today at 108-23
SEP 10 yr. NOTES began the month at 106-010 and settled today at 106-090
I've been LONG bonds for a while now and, although the PPI numbers released today were rather tame, I just don't know whether there will be a lasting affect on the markets. The 10 yrs. have rallied over 2 1/2 points since the low was made in late June. The markets haven't retraced enough for me to exit my LONG positions but I'll need to see some real follow-through over the next couple of sessions to keep my position intact.
Meats:
AUG LIVE CATTLE began the month at 83.72 and settled today at 87.75
AUG LEAN HOGS began the month at 68.55 and settled today at 71.75
I don't trade the MEATS very much but they've been on a tear recently. LIVE CATTLE, since bottoming in April, has rallied 20%. LEAN HOGS have been a little more volatile but have logged some significant gains since April. If you have the stomach for these markets power to you.
Precious Metals:
OCT GOLD began the month at 640.40 and settled today at 628.30
SEP SILVER began the month at 1137.0 and settled today at 1212.5
SEP COPPER began the month at 357.00 and settled today at 351.50
We've had a bit of a mixed bag in these markets with GOLD and COPPER lower and SILVER higher. I think we have more work to do to the downside in the short-term but I'm still a MAJOR BULL longer-term. BUY the dips in GOLD and COPPER for now.
Softs:
OCT COTTON began the month at 53.45 and settled today at 53.35
SEP FCOJ began the month at 169.25 and settled today at 172.50
SEP COFFEE began the month at 99.35 and settled today at 102.85
OCT SUGAR began the month at 14.91 and settled today at 12.79
SEP COCOA began the month at 1486 and settled today at 1524
OCT LUMBER began the month at 273.00 and settled today at 265.80
These markets are always interesting and the last two weeks have been no exception. Cotton is the same price it was 2 years ago. One of two markets that are really worth taking a look at, OJ has been one of the truly stellar performers and has been on a tear since it bottomed in May of 2004. Coffee could very well work its way back to the 90 cent level soon. Sugar ain't been real sweet lately since it failed to break the 20 cent mark at the beginning of the year. Cocoa rallied sharply in late June and into July but has now fallen back into the previous trading range. Lumber is the other market worth looking at and I've been SHORT this market simply because I think there's a lot of bloodletting that will take place in the housing markets over the next 18-24 months. If you can handle trading LUMBER stay SHORT for further gains.
That's the update for mid-August. If you have any questions email me a dale@trendsincommodities.com.
Dale F. Doelling
Chief Market Technician
Trends In Commodities
Monday, August 14, 2006
Monday's Precious metals commentary
The following comments were sent to Myra P. Saefong, Financial Columnist at Marketwatch.com, at 7:33 AM EDT.
__________________________________________________________________
The traders that are looking at the daily charts of Gold, Silver and Coppermight conclude that the secular bull markets and well-defined trends thathave developed over the last 5 years have come completely unravelled.But a longer-term view of the markets, i.e. weekly and monthly charts,provides a far brighter picture. By expanding their time horizon traders canfind strong evidence that the long-term trends remain intact.Successful traders often need to alter their perpective especially during periodswhen the markets experience a lack of direction and become choppy andvolatile because these types of markets are extremely tough to squeeze profits from.A short-term trader could make the case that there are only 2 positives in theGold market right now. 1) OCT GOLD closed above the 50-dayMA (627.30) on Friday and 2) the 100-day MA still has a positive slope.The bad news is more extensive. The 20 and 50 day MA's have turned downand Gold closed below both the 20-day and 100-day MA's on Friday and isnow trading more than $50 below the retracement high of 684.70 on July 17th.In other words, it's not looking good if your focus is on the short-term.Absent of well-defined short-term trends the markets are being whipsawed byevery minor news item and comment by anyone of any importance around the globe.This makes for an extremely difficult trading environment. The short-termtraders can only hope that the current market conditions will be short-lived and that theshort-term trends will emerge once again. If this occurs, the likelihood that the metalsmarkets can push to new all-time highs will rise dramatically.
Dale F. Doelling
Chief Market Technician
Trends In Commodities
__________________________________________________________________
The traders that are looking at the daily charts of Gold, Silver and Coppermight conclude that the secular bull markets and well-defined trends thathave developed over the last 5 years have come completely unravelled.But a longer-term view of the markets, i.e. weekly and monthly charts,provides a far brighter picture. By expanding their time horizon traders canfind strong evidence that the long-term trends remain intact.Successful traders often need to alter their perpective especially during periodswhen the markets experience a lack of direction and become choppy andvolatile because these types of markets are extremely tough to squeeze profits from.A short-term trader could make the case that there are only 2 positives in theGold market right now. 1) OCT GOLD closed above the 50-dayMA (627.30) on Friday and 2) the 100-day MA still has a positive slope.The bad news is more extensive. The 20 and 50 day MA's have turned downand Gold closed below both the 20-day and 100-day MA's on Friday and isnow trading more than $50 below the retracement high of 684.70 on July 17th.In other words, it's not looking good if your focus is on the short-term.Absent of well-defined short-term trends the markets are being whipsawed byevery minor news item and comment by anyone of any importance around the globe.This makes for an extremely difficult trading environment. The short-termtraders can only hope that the current market conditions will be short-lived and that theshort-term trends will emerge once again. If this occurs, the likelihood that the metalsmarkets can push to new all-time highs will rise dramatically.
Dale F. Doelling
Chief Market Technician
Trends In Commodities
Tuesday, August 01, 2006
An ugly August ahead?
The DOW futures, which I have been SHORT since May, are starting off the month with sharp declines. If you've been monitoring this blog then you know that I warned that the DOW's retracement rally ended on Friday when the index broke through the 100-day MA on an intraday basis but ended the week below that level. I don't believe in trying to predict where the markets are going to be in the future but I have to admit that I believe the month of August will go down in the record books as one of the ugliest on record for the Stock Index futures. Let's just call it a hunch. So, stay SHORT and enjoy the ride to new cycle lows. There is a pot of gold at the end of this rainbow but only those traders who exercise patience will generate the maximum profit from this next leg down.
Dale F. Doelling
Chief Market Technician
Trends In Commodities
Dale F. Doelling
Chief Market Technician
Trends In Commodities
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