What's Up, What's Down: Crude Oil Prices Down, Hogs Sharply Down

Comments for Tuesday, July 1

Looking Ahead to Today By Reflecting back at Monday's price action)

ENERGIES
Higher closes for natural gas while lower for the crude and heating oil along with the RBOB Crude and heating oil made a new contract highs before settling lower. The RBOB is now in a bull pennant. Natural gas still has a KEY REVERSAL in place but made a new contract high close and should continue higher with the rest of the energies.

CURRENCIES
Higher closes for the Japanese Yen, British Pound and dollar index while lower for the Swiss Franc, Euro Fx, Canadian Dollar and Aussie Dollar. The euro and franc continue to look higher at this time with both making recent highs before settling slightly lower. The key price to close over for the euros is 157630 and the francs 9857. The yen continues to move higher and should rally to the 9600 area basis the September contract as mentioned last week. The Canadian Dollar settled lower and needs to hold the 9800 area or its rally could be over. Also a close over 9900 would be helpful. The Aussie Dollar made a new contract high before settling lower in reversal type action but not a key reversal. This market still looks higher overall. The pound made a new contract high and close although the close was only by 5 points as it continues its upwards momentum. The dollar index made a new recent low before rallying to settle high still looking very weak but this was reversal type action.

GRAINS
Higher closes for soybeans, soymeal, bean oil, rough rice and oats while sharply lower for Minneapolis, Kansas City and Chicago wheat along with corn due to the acreage report. Minneapolis, KC and Chicago wheat in one day went from buy to sell signals. Corn settled down the $0.30 daily limit but still bullish overall with a potential top forming. Oats made a new contract high close after settling almost $0.09 higher. Rough rice settled up the $0.50 limit this time now in a pattern that could go in either direction and seems to be settling between 180 and 200. Beans and meal made new contract highs and closes while oil is in a bull flag looking very strong overall.

MEATS
Higher feeder cattle but lower for pork bellies, live cattle and lean hogs. Cattle closed very weak and now is in a possible topping formation but still bullish overall. Feeders settled slightly higher which was not very bullish considering corn closed down the $0.30 limit after the bearish acreage report. Again hogs had their lowest low and close since the beginning of April after gapping down filling part of its 7040 gap basis the August contract. This also was very bearish for hogs considering corn's action today. As poorly as bellies closed it still was near its session's highs. However, bellies did settle below 7500 basis the August contract and look very bearish overall.

METALS
Higher for for gold, copper and silver while lower for platinum. Copper still has strong resistance up to 400 basis the July and September contracts and my next price objective is 390. This market looks strong but needs to at least close over 400 for now. Gold and silver also settle higher with the former in the mist of an even larger potential buy signal and the latter close to its first buy signal trying to break out of its sideways pattern. Platinum settled lower and is also still in a sideways channel but now still at the upper end of the channel.

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 or call toll-free (888) 281-4158.