FOR FRIDAY: (8/5) Weak closes on grains should set up new lows into Monday and willing to sell if we have a good risk/reward. Cattle are hooking lower and may be down into the middle of next week and hogs are too oversold to be chasing. We have to stay open to 323 on Dec. corn into Monday still but a buy should finally set up by then for the August rally–but it will be sickly.
Fortucast Financial Video Magazine
Fortucast Financial Video Magazine for the week of August 4th, 2016. Topping action for US stock market and more.
https://youtube.com/watch?v=-8aCdFHbM1M
Employment report breaks excessive
FOR THURSDAY: (8/4) While we got into a number of positions on Wednesday, it was more for positioning for the bigger picture. Bounces are all bigger than we like and that leaves us vulnerable and having to position trade through chaos on Friday with big stops. We’re going to retreat as much as we can and see what develops. Trading the week of employment report is always a congestive mess but some of the breaks are more than they should be, like silver and crude, and suggests that something is wrong. Big energy point for everything still into Sunday night.
Positive cycles peak overnight for grains
FOR THURSDAY: (8/4) Positive cycles peak overnight for grains and meats but possible that grains could come back into the close. We continue to be open to one more push lower into Monday and we aren’t quite willing to top-pick for shorts until Thursday night or early Friday. Cattle had a nice run up on Wednesday and may come off a bit on Thursday and if so we’ll look to rebuy them.
Wednesday best day for stocks to fall
FOR WEDNESDAY: (8/3) Best day for stocks to fall is Wednesday as they congest into employment numbers on Friday. Dollar may finally find support also. Crude still in trouble until Friday. If the S & P stays above 2133, it still may be a minor 4th wave matching the July 5-6 fall and be followed by a new high into Friday. By next week, stocks could unravel for 1-2 weeks.
Grains due for a countertrend bounce
FOR WEDNESDAY: (8/3) Still like the long side of meats for Wednesday and also grains for a counter-trend bounce. Macro data is centered on US employment numbers on Friday. Soybeans closed lower for the second day on Tuesday as weather forecasts show mild conditions the next two weeks and USDA late on Monday said corn and soybeans continue to do well and are quickly maturing. Wheat markets were pressured by the lower soybeans and by news that Japan and South Korea have temporarily restricted imports of certain classes of U.S. wheat after a GMO discovery in a Washington state field. Crude oil cycles are lower into Friday with cycle lows projecting 35.00 max. Not a good thing. The dog days continue!
Position trades challenging this week
FOR TUESDAY: (8/2) Employment report week is often congestive so it‘s rarely a good idea to chase markets that are overdone to the upside like gold and silver–and stocks, for that matter. Usually this week lends itself to a lot of quick trades and we’ll look for some in the morning. Getting away with position trades will be challenging this week.
Breakdown to lower levels on Tuesday
FOR TUESDAY: (8/2) Warm and wet conditions are like a greenhouse—not fun to live in but great for growing. Beans are losing their fear premium. While temperatures turn warmer into mid-August, storms continue to rumble across the Corn Belt with maps for the next seven days showing coverage in most areas. Official 6- to 10 and 8- to 14-day forecasts out yesterday are warm but wet, supported by the latest updates this morning. New forecasts for August issued Sunday confined above average temperatures to the Southwest and West, by-passing most of the Corn Belt, with above average precipitation predicted from the I-90 to I-70 corridors as far east as central Indiana.
Nothing friendly in the crop reports. Breakdown to lower levels on Tuesday seems inevitable. Hogs and cattle are indicating lows in and can be bought on dips until August 12. Hard to chase after near limit-up cattle moves.
Huge complex of cycles peaks into Sunday night/Monday
FOR MONDAY: (8/1) A huge complex of cycles peaks into Sunday night and Monday. We find that stocks often rally the first day of the month and then pullback 30-40 S & P points and congest before the employment report. Currencies are very overdone and hard to chase but overall the dollar looks weaker until Aug. 7 even if we get congestion for a bit. T-notes look higher into Aug. 7 and metals also higher. The issue with all the market is finding entries and dealing with pre-employment report congestion.
Oversold grains likely to turn seasonally higher next week
FOR MONDAY: (8/1) Hot weather is expected early next week in the western Midwest with temperatures in the mid- to high 90s forecast Monday through Wednesday in Nebraska and Iowa, and in the 80s to low 90s elsewhere. The 6-to 10-day outlook (Aug. 3-7) is hot and dry for the western Midwest and hot for the rest of that region. There are a lot of energy points on Monday and oversold grains are likely to turn seasonally higher next week and through August in places. Hogs look done for now and cattle are due for a cycle low on Monday also and higher prices later in the week. We’ll let the dust settle before bottom-picking on many of these markets.