What's Up, What's Down: Futures Chart Down, Crude Oil Sharply Up, Hogs Up

(Comments for Monday, June 9 Looking Ahead to Today By Reflecting back at Fridays price action)

ENERGIES
Sharply higher closes for the crude and heating oil along with the RBOB and natural gas. New contract highs and closes for crude oil, the RBOB and natural gas. All of the energies look to continue higher after today's explosive action but I wouldn't think about taking a long position at this time unless a sharp correction ensues first. The risk versus the upside potential at these prices is not worth it.

CURRENCIES
ROLL OVER TO THE SEPTEMBER CONTRACT TODAY. Sharply higher for the Euro Fx and Swiss Franc while higher for the British Pound, Japanese Yen and Aussie Dollar while sharply lower for the dollar index and lower for the Canadian Dollar. The euro is now close to a buy signal and the franc has given me a buy signal following through from their failed bear pennants on Thursday. The yen, however, still looks lower overall even after its strong close today. The yen also has been gradually working lower since its highs back on March 17th with support around the 9400.

The Canadian Dollar keeps dropping and is in a bear pennant with strong support under 9800. The Aussie Dollar made a new contract high and close and then settled higher again, acting like it will test its contract highs. The pound also settled higher now in a resistance area forming a possible bottom. The dollar broke sharply and is in some weak support but a critical area to hold with contract lows not that far away. It was up early and then broke over 82 cents to close near its daily low. This is also a reversal type action but to the downside this time, meaning the dollar could break down to the 7300 area basis the September contract. Still the dollar should work higher overall but in sideways action since the middle of March.

MEATS
Higher pork bellies and lower for live cattle, feeder cattle and lean hogs. Cattle are still bullish but trying to form a possible topping formation at this time. However, this same pattern has happened twice before in May and June resulting in rallies to a new contract high, although the August contract settled near the lower end of its trading range. Feeders closed lower again giving me a sell signal this time. A sharply lower close for hogs has now also given me a sell signal. Bellies on the other hand had a strong close but are now in a bear pennant still looking lower overall and also giving me a sell signal.

METALS
Sharply higher closes for copper, gold, silver and platinum mostly due to exploding energy prices. Copper still looks lower overall. Gold is now close to a buy signal but silver is still basically in the same sideways action its been in for the last couple of months. Platinum exploded higher but still doesn't have a good direction to take.

INDICES
Sharply lower closes for the cash and Dow futures along with the S&P's, Nasdaq and Nikkei due to exploding energy prices. Today's action has now given me a sell signal for the S&P's. However, I don't have one for the Nasdaq and Nikkei which are still holding up technically. The cash and Dow futures had their lowest lows and closes since the middle of March.

GRAINS
Reports Today: Export Inspections, Crop Progress, NOPA Crush. Sharply higher closes for Minneapolis, Kansas City and Chicago wheat along with corn, rough rice and bean oil along with higher closes for soybeans and corn. Only the soymeal settled lower. Now I have buy signals for Kansas city and Chicago wheat after today's action. Corn made a new all-time contract high and close again while oats also rallied sharply again but still in a resistance area in a $0.50 trading range since the beginning of April. A close over 425 is needed to resume its upwards momentum overall.

Rough rice settled sharply higher now trying to form a bottom but still bearish overall. Soybeans had their best high and close again since the middle of March giving me a buy signal now joining meal and oil. Meal made a new recent high again but this time settling slightly lower off oil/meal spreading. Meal should test its highs now anyway. Oil is now poised for a breakout of its trading range and should also test its highs along with beans and meal.

SOFTS 06/09

LUMBER: Lumber settled unchanged to higher but no changes technically. There is heavy support down to the 240 area basis the July contract. A close over 250 basis the July contract would be nice and above 260 look awfully good! Lumber has been basing since April but is now closing in on a critical area (240-July) to hold.

ORANGE JUICE: Orange juice settled higher again and now should test the 12000 area after closing 11500 basis the July contract.

COCOA: Cocoa settled sharply higher breaking out of its bull pennant with its highest high and close since early March. Cocoa should now test contract highs.

COTTON: Cotton closed strong and now should test the 7000 area basis the July contract though this is still a very bearish looking market.

COFFEE: Coffee closed one tick higher still chopping around in its sideways pattern since the middle of March trading mostly between 13000 and 14000.

SUGAR: Sugar settled higher again but continues to look very weak overall.

INTEREST RATES
Higher closes for the bonds, notes and eurodollars. The eurodollars are still in a consolidation pattern with a slightly downward bias and shouldn't be traded until we see a good breakout in either direction while the bonds and notes are still bearish but in possible bottom formations.

Rick Alexander has been a broker and analyst in the futures business for over thirty years. He is a Vice-President for Sales and Trading at the Zaner Group (www.zaner.com) a Chicago-based futures brokerage firm. Email Rick at ralexander@zaner.com.