Meats look firm this week on cold weather

FOR TUESDAY: (1/3) First of the year trading for grains is often crazy. Weather gaps up are possible and chances are they will be sold for the rest of the week and that is our strategy. Meats look firm this week on cold weather but it’s relative and not as bad as early January can be. Off to the races. Wishing you a successful trading year!Continue reading

Favoring long stocks, dollar next week

FOR FRIDAY: (12/30) Not expecting much going into a quiet holiday weekend. If there are no violent shocks over the weekend, we do want to be long and stocks and the dollar next week and they should be oversold enough for better risk/rewards. Crude looks lower next week and gold and silver are topping on Friday and lower into next week.Continue reading

Lower grains next week

FOR FRIDAY: (12/30) Final day of the year may have funds doing position squaring and hopefully cattle are lower because they have been higher all week and not pulling back. We do see lower grains next week and will exit longs and look to get short on Monday night or Tuesday if we can get a decent risk/reward.Continue reading

Higher grains into Friday

FOR THURSDAY: (12/29) Thin market conditions are not making for fun trade and we might normally just sit back but there were some clear patterns and cycles, and we still think that is the case. We will go with higher grains into Friday and then lower next week and still looking for pullbacks on cattle the next few days and rallies on hogs.Continue reading

More position squaring in play

FOR WEDNESDAY: (12/28) The Brits and Canadians are back from Boxer Day on Wednesday so volume should increase a bit on Wednesday. The world seemed to survive terrorist threats over the weekend and that may still allow a last-week final bounce. Still may not get much of anything this week but year-end book-squaring and we’re starting to think a lot of sideways action going nowhere in all the markets until volume returns after vacation. We are inclined to expect end-of-the-week position squaring and then completions of key patterns in early January.Continue reading

OK buying pullbacks on grains

FOR WEDNESDAY: (12/28) We had higher grains this week but never like to play the first day of three-day weekends although funds do and they got a bit crazy. Grain cycles look higher into the New Year and we’re OK buying pullbacks and exiting by Friday or near the open of next Tuesday. Cattle may hold up on Wednesday but look lower into the end of the year and hogs look higher all week.Continue reading

Year-end bounce possible

FOR TUESDAY: (12/27) Post-holiday markets are hard to trade because of the release of pent-up energy from lack of trading. Given closed European markets, that may not be an issue this week. The Brits and Canadians take an extra day off for Boxers Day so that keeps volume lighter. The world seemed to survive terrorist threats over the weekend and that may still allow a last-week final bounce. Still may not get much of anything this week but year-end book-squaring.Continue reading

May get short-covering on grains into Tuesday’s low

FOR TUESDAY: (12/27) Grains may be done to the downside by Tuesday and recover next week. We usually like to favor shorts into the end of the year but it may be that we get short-covering from oversold conditions into Tuesday’s low. The Dec. 1 cattle on-feed report looked neutral to a bit negative: on feed, 99%; placed in November, 115%; marketed in November, 117%. The Dec. 1 Hogs & Pigs report was a bearish surprise: total hogs, 104%; kept for breeding, 101%; kept for market, 104%. Cattle look lower all week and hogs may have a wash-out day on Tuesday and then have nowhere to go the rest of the week.Continue reading

Tuesday may be the best trading day of next week

FOR MONDAY NIGHT: (12/26-27) We’re flat going into the holiday weekend. Will send additional technical comments in the event of some major volatile event. Otherwise, next update will be Monday afternoon. We would expect that Tuesday may be the best trading day of next week.

MARCH E-MINI S & P 500
TRADING RECOMMENDATION: Stand aside.

S&P ANALYSIS FOR MONDAY: (12/26-27) Market has still done nothing but continue in a 4th-wave congestion pattern, and that will remain the case unless 2040 comes out. That leaves two more new highs to 2295 and 2330 into the New Year. We originally had cycles lower for next week but would feel better if the pattern completion came in on a post-holiday spurt. We’re still dealing with end of the year profit-taking next week, as the market has had a 250 point run-up since the election lows. We will advise on next week’s trading after we get through holiday tensions.

OVERALL: We do see 2295-2300 and then congestion next week or have a surprise pullback if any major terrorist attempts happen and upset the trade. So far they are confined to Europe. Any surprises and a break below 2240 might start leading to 2230 and then 2219.

BIG PICTURE: Patterns suggest two new highs to 2300 and 2330 into early January before we really have to worry about a 100-point pullback that may happen into the spring. Unless there’s something really wild coming, our focus for swing trades will be to buy a pullbacks.

WEEKLY CHART: Market has to hold 2240 and probably the market will not get close to that level. We still would expect a new high by Dec. 22 toward 2296 with additional resistance at 2330. It would seem that 5-wave up from the election low would be complete at 2330 and set up larger fall. Eventually we might get a 110-point correction from 2330 to 2220 and could take a few months which we need to confirm in the cycles. That means that much of the fun of the current rally will be over soon. Daily cash charts starting to project 2300 and weekly charts 2335. We have a bias for higher prices from FOMC into Dec. 22 but we’re not clear how long it will take to do the last push up to 2330. Could be as late as Jan. 7.

MONTHLY CHART PATTERNS: 2420 or 2520 isn’t out of the question before this bull market ends and it takes a long time to turn an ocean liner around in so V-tops and crashes are not to be looked for and publications that steer you that direction are being too sensational.

CYCLES OVERVIEW: Higher into Dec. 26; profit-taking into Jan. 2.