Comments for Tuesday May 12, 2009
CURRENCIES:
Higher close on Monday for the Japanese Yen and dollar index while lower for the Euro Fx, Aussie Dollar, Canadian Dollar, British Pound and Swiss Franc. New recent highs were made for the euro and franc before settling lower. However, both currencies are in uptrends and should continue higher with little resistance above. The yen's strong close is showing the yen forming a potentially large bottom as evidenced below but the downtrend is still in tact.
The Canadian Dollar made another new recent high since the middle of last October in reversal type action but is in a major uptrend at this time. However, there really is no near term support. The pound settled lower but is in a bull pennant meaning it should continue higher in at least the short term. The Aussie Dollar also made a new recent high before settling lower in reversal type action, but like the pound, looks extremely bullish with no support until the 7200 area basis the June contract. The dollar index, on the other hand, made its lowest low since last December before settling higher in reversal type action. However, the dollar is looking very bearish overall. I still maintain Buy Signals for the EuroFX, Swiss Franc, Canadian & Aussie Dollar.
MEATS:
Higher settlements for live and feeder cattle Monday, while lower for lean hogs and pork bellies. If you look at a June cattle chart you will see basically sideways action mostly between 8000 and 8500 since the middle of January. One might say buying around 8000 and selling around 8500 would be smart trading. Of course we're all great traders using hindsight! Therefore, I recommend standing aside for now since cattle are basically at the upper end of the middle of its trading range with no direction at this time. Now take a look at the weekly (bear triangle) and monthly (bear pennant) charts below and cattle look lower. Of course the daily chart will change before the others do. Feeders had another strong close and are now near their last highs as predicted here while making higher highs and higher lows since February in the August contract. Hogs settled lower and still are in a downtrend overall but do have an ISLAND REVERSAL in the June contract. Also, there is really very little resistance up to the 7200 area. Bellies settled lower and are still in a downtrend trying to bottom. Either way trading bellies is generally a one-way trip! I am posting a Sell Signal for Pork Bellies.
See the balance of my morning comments, including the Metals, Softs, Energies and Grains, at my website. For my complete coverage, visit my commentary page at www.markethead.com.
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. If you would like a free booklet explaining the charts mentioned above, email Rick at ralexander@zaner.com.
