Oversold conditions for meats, grains should create recoveries

FOR TUESDAY: (1/16) Forecasts call for below normal temps next week and oversold conditions for meats and grains should create recoveries into next Friday. Given bearish grain reports, hard to be too aggressive buying, and beans are too much off of their lows to have a good risk/reward so we’ll see how they come in on Tuesday morning. Wheat broke enough that we can’t think buy and will need a miracle to get up to 445-50 again. Corn likely to be dull.

MARCH SOYBEANS (electronic ok)
TODAY’S COMMENTS: (1/16) Market didn’t get down to key support at 941.50 or 938 abut bounced enough to confirm cycle highs and a recovery into next week. Beans could easily recover to 968.50 and 976 this week. Not sure we can count on more before 928 wants to come in. Not much hope from SA weather and at some point their crop will be made and this market will tank to 880 based on current patterns.
CYCLES OVERVIEW: Bottoming by Monday night/Tuesday; recovering into Jan. 22; lower into Jan. 24.

Looking to get short crude and gold

FOR FRIDAY: (1/12) We forget that we have a holiday weekend coming up and even though there’s a lot of trading in Europe, trading will be muted on Monday. We’re going to get short crude and gold, as we see trending situations now until Jan. 24. Not clear on the dollar but will wait for the long weekend to take a position.

MARCH E-MINI S & P 500
TRADING RECOMMENDATION: Wait for morning comments.
S & P ANALYSIS FOR FRIDAY: (1/12) The push above 2760 reminds us why we should never rush to short this market. Key resistance up to 2793.25 now. We had thought that Friday was the best day be lower but will it be much or matter? Continued failing momentum suggests they will take it down the 70 points but exhaust us in the process. We had thought that the start of the move lower is more likely tonight or Friday.
NEAR TERM: Patterns suggest the need for 70-100 point pullback and that could start soon but it will be inconsequential with such a strong start to the year. The most bullish pattern would allow only a 30-point pullback and then a 100+plus point move up. We exited with nice profits on our ETF position.
SHORT-TERM: (1/05) Thinking that the market is lower Jan. 12 and into Jan. 19. Not sure what will happen but we do have the debt ceiling coming up again for Jan. 19. It does then seem like a 3-week correction into Jan. 24-25 is likely with a recovery into Feb. 2.
CYCLE SYNTHESIS: Lower into Jan. 12; lower into Jan. 19.

Trade willing to throw beans off a cliff as SA weather improves

FOR FRIDAY: (1/12) Not sure we learned much on Thursday except that the trade is willing to throw beans off a cliff as SA weather improves. Trade waiting on USDA report for Friday. Grain cycles look like short-covering will happen now and then next week looks higher for grains. Cattle also seems in trouble for another day. With the long holiday weekend, we have to move stops down tightly on meats and exit by the close on Friday. Pre-holiday short-covering could happen but hard to go long without key numbers coming in.Continue reading

Still favoring short stocks

FOR THURSDAY: (1/11) Did we react too quickly on the China news? Have to see what happens on Wednesday night. The rumor is now unconfirmed so will it be back to business as usual? We got caught in the knee-jerk reaction and now have all kinds of conflicting data.

MARCH E-MINI S & P 500
S & P ANALYSIS FOR THURSDAY: (1/11) A 3-wave bounce for a secondary high would go to 2758.50. If you got short, have to have stops above 2753.50 and even 2752 is too much. We’re more clear that Friday is lower and so we have to think that a secondary high can come in.
OVERALL: S & P broke 2740 and 2760 was close enough to 2762 to have completed 5 waves up. That could mean that the 70-point pullback into Friday is starting to 2690. The most bullish interpretation left would be hold 2730 and matching the 30-point correction we had on the last day of the year and then going to 2790. Given our orientation toward weaker action into Friday and somewhat dire news out of China—that could change—we have to go with shorts now.
CYCLE SYNTHESIS: Lower into Jan. 12; lower into Jan. 19.

Hogs in trouble into Monday

FOR THURSDAY: (1/11) Trade waiting on USDA reports at the end of the week. Grain cycles look like short-covering will happen now and then next week looks higher for grains. Cattle also seems in trouble for a few more days into Friday or part of Monday. Hogs also in trouble into Monday.Continue reading

Breakout on crude today a game changer

FOR WEDNESDAY: (1/10) Breakout on crude today is a game changer but we do have a cycle high due by Thursday and a 2-week correction coming but inflation is back. S & P has its best opening for the year in 30 years and we’re not going to throw cold water on this wonderful event. Our work had suggested a pullback is due but will it be much and matter if 2780 comes in first?Continue reading

Cattle showing some short-covering life

FOR WEDNESDAY: (1/10) Trade waiting on USDA report at the end of the week. Still, cycles are weak a few more days before short-covering starts. Cattle also seems in trouble for a few more days into Friday but showing some short-covering life and we’ll have to move stops lower.Continue reading

Two very energetic cycles due on Tuesday

FOR TUESDAY: (1/09) Not sure we learned much from Monday’s action and the NE is still digging out from its storms. There are two very energetic cycles on Tuesday and they may bring surprises, so do not get too complacent. In the past these cycles have been bad for gold so continue to move stops up and take profits there.Continue reading

Grain cycles weak a few more days

FOR TUESDAY: (1/09) Trade waiting on USDA report at the end of the week. Still, cycles are weak a few more days before short-covering starts. Cattle also seems in trouble for a few more days.

MARCH CHICAGO WHEAT (electronic ok)
TODAY’S COMMENTS: (1/9) Patterns suggest a bounce to 433 and 424 has held. That still would allow 447 or higher to manifest if new weather threats come. We do not like to be short wheat with threatening weather and will continue to stay out of it. Much above 435 and you need to go long. Might see 449.50 or 457 if we have weather problems next week.
NEAR TERM: The 450 region is possible in January but concerned about end of the year meltdowns.
CYCLES OVERVIEW: Lower into Jan. 9; higher into January 11.

S & P close to key target zone at 2732 but…

FOR FRIDAY: (1/05) S & P close to key target zone at 2732 but will anyone be around to trade on Friday with the Bomb-Cyclone even if they trade from their homes? Natural Gas prices at record highs are not great for inflation and commodity prices have risen strongly since the US raised rates so the deflation block may finally be lifting but what happens if the economy doesn’t really pick up? Cycles highs still due into Sunday and maybe Wednesday for some of these trending markets so there’s still inflation money left.

MARCH E-MINI S & P 500
S & P ANALYSIS FOR THURSDAY: (1/05) No rest for the bulls as 2731.50 is only 6 points away. Computer patterns could allow a pullback to 2716 and then a new high to 2749.50. There is still time for this to happen and we will not top-pick a bull. NQ has room to 6700 and DOW futures have closed over 25000 so what’s there to worry about. We could easily see profit-taking set in Friday as New Yorkers head for their bomb-shelters if they make it in. Let’s pray for no power outages as they could be life-threatening. The next pullback could be 70 points but that would look like nothing and it may happen from 2749.50.
SHORT-TERM: (1/2) Inclined to think that the trade will buy the market Jan. 2-5. It does then seem like a 3-week correction into Jan. 24-25 is likely with a recovery into Feb. 2. Now we have the Jan. 19 debt ceiling to deal with or will they kick it down the road again?
CYCLE SYNTHESIS: Higher into Jan 5 and 7; lower into Jan. 12; lower into Jan. 19.