Cyprus Begins To Affect Markets in Late Week Trade
Written by Al Martin Monday, 25 March 2013 18:07
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(3-25-13) We saw good volatility in Friday’s action in the June Long Bond contract, wherein our standing contingent order to sell the Bonds at 143.20, covering at 143.12 was filled three times. Bonds continued to vacillate in Friday’s action. Depending on the play out of the Cypriot situation in Monday’s trade, we think the action in the Bonds is going to be as much as plus one point if no Cypriot deal can be reached or as much as minus one point if a Cypriot deal is reached and the fear bid comes out of the US Treasury market.
The June Dollar index continued to consolidate around the 83.00 level in Friday’s trade, when good short covering came into both the Euro and the Pound, pushed up on a so-called “good Cypriot outcome.” We shorted the Euros late as well as the Pounds and think that the withdrawal of the fear bid in both markets is overdone, particularly considering the Fitch downgrade of UK debt in late Friday action.
April Gold contract fell back in line with our expectation as fear bids came out of the market late Friday. We were short the Gold from our overnight positions at 1615 and were able to cover on our standing orders at 1607 in late trade. Again look for a plus or minus $10move in the Gold Monday depending on Cypriot play out.
May Sugar contract continued to fall back in late week trade. We were sellers once again on rallies above 18.30. Although the Sugar continues to hold the 18.00 level, we continue to believe the Sugar has nowhere to go but south.
May Orange Juice contract – we continue to short on our standing order at 1.3950, covering on 1-3 cent dips throughout the week. We will continue to look at the 1.40 level for fresh shorting opportunities.
May Lumber continues to fall back in line with our expectation. We had shorted the Lumber at 403 in last week’s trade on our standing order and had recommended that readers do the same. Our 383 cover orders were hit in Friday’s trade. We think that Lumber also has had its play for now.
Selling action again early week in the May Bean contract. Despite bullish shillism about Chinese buying, we continue to short the Beans on rallies. Again we had sold the Beans just above 14.50 in Thursday night action, wherein we were able to take 10 cents out of them in the day session. We continue to believe that the Beans will come back down to retest the $14 area.
The Corn and Wheat also remain overbought at current levels. We have been consistently shorting the Corn in the 7.30 or better level, covering on 5-10 cent dips and would continue to look at anything above 7.30 as a short selling opportunity in the May Corn. We also look at the levels above 7.35 as a shorting opportunity in the May Wheat.
May Silver – after having played catch-up with the Gold midweek came back down to begin to trade underneath the Gold in the Gold/ Silver equator. Silver continues to act weak. We continue to short the Silver on our standing orders at 29.12 and have shorted the contract as much as 29.20 in Friday’s trade, allowing us to take a 50 cent profit out of the contract by the close. We continue to look at the 29.12/ 20 area as the shorting zone.
April Platinum – we continue to short the Platinum on moves above 1600, as we did throughout the week, covering on $10-15 dips. We continue to believe Platinum is the short in the 1600/10 area.
Good short covering action in the Copper as Copper failed to move decisively under 3.40 midweek. We believe however that the short covering bounce in the Copper is now overdone with global Copper news becoming as bearish as it has been in 20 years. We think the Copper will come down for a retest of the 3.40 area.
May Coffee – we were consistently shorting the Coffee throughout the week. Late week bounce off the 1.3250 area was strictly short covering-led. We would be looking to sell the Coffee again on any move back above 1.36.
May Cocoa – we were consistently hit throughout the week on our standing short order at 2180, which we have been covering on $20 dips.
May Cotton – we had warned of overvaluation in the May Cotton contract. Indeed we saw the Cotton fall back some 6 cents week over week. We think the Cotton has more to go on the downside.
Waiting for Pattern Completions
Written by Al Martin Sunday, 17 March 2013 23:52
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(3-17-13) The June Long Bond contract continued to move higher in Friday's trade, continuing to disassociate from equity markets. After three good US Treasury auctions last week, we would expect the Bonds to move up to the 143 area in early week trade.
March Dollar contract continues to meet resistance at 83.00 However we think any moves in the Euros back to 1.31 or better are shorting opportunities, as we expect the 1.29 area to be tested within the next five days.
April Oil also being turned back consistently in the 93.50-80 area. We shorted the Oil again on our standing order at 93.75 in Friday’s trade and would expect to be able to take a dollar out of the contract by the close Monday.
April Gold contract continues to be turned back at the 1593 resistance area. We think moves above that area are shorting opportunities.
May Sugar contract -- after having a short covering run in mid-session Friday touching buy stops above 19.01 settled back. We continue to believe that the Sugar is dramatically overbought above 18.75.
May Orange Juice -- we had shorted early week on our standing orders at 1.3905, taking 2-1/2 cents out of the contract. We were short sellers again at 1.3925 in Friday’s action. We would expect that the Juice will fall back again to the mid-1.30’s area.
May Lumber which we had shorted on our standing orders at 408. We were filled on our cover orders at 403 in Friday’s trade. We think the Lumber is also dramatically overbought at current levels.
Beans continue to fall back in late week trade. We had warned that a breaking of the 14.60 support area would likely lead to a sharp pullback. Indeed we saw that in Thursday- Friday trade, our 15.5975 sell stops touched off early Friday. We were able to take 30 cents out of the contract on the close. We suspect that the Beans are coming down for a retest of the 14.00 area.
Also we were consistent short sellers of the May Wheat contract in the 7.25 area, covering on small scalps. We think the Wheat is now overdone at current levels and should be shorted on any moves back to 7.25 or better.
We also believe the May Corn should also be shorted on any move above 7.17.
The May Silver continues to act lethargic relative to the action in the Gold. We were consistently selling the contract once again on moves above 29.00 throughout the week, covering on 25 cent dips. We think moves above the 29.00-29.20 area are still shortable.
April Platinum – we were consistent sellers throughout the week on our standing orders at 1604, covering on $10-15 dips. We continue to like selling the Platinum in the 1600-1610 area.
May Copper – once again we were short sellers throughout the week in the 3.55 range, covering on 2-3 cent dips. We think the Copper is now pulling back and will come down for a test of its early week lows in the 3.47 area in the coming week’s trade.
May Coffee – we had noted that we had warned that the Coffee contract would pull back under the 1.40 area. Indeed we saw this in late week action. We think the May Coffee contract will now come down to establish a contract low in the coming week’s trade.
We had also warned of overvaluation in the May Cocoa contract. Indeed the contract came down throughout the week. We were short sellers on our standing orders midweek at 21.70, covering on Friday’s close at 21.15. We still believe the Cocoa is $100 overbought at current levels.
Short squeeze action continues in the May Cotton contract, as the contract soars above cash bids. We think this speculative fervor in the May contract is sharply overdone and would look to be sellers at current levels.
Record Sell-Off in US Treasuries Creates Buying Opportunity, as Equities Near a New Top
Written by Al Martin Sunday, 10 March 2013 21:53
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(3-10-13) The June Long Bonds came down again in Friday’s trade. We were automatic buyers at 140.18 in early Friday morning trade, which represented a 4-1/2 point decline off of the five day - intraday highs. Noting that such a decline only occurs on average of once every two years, we had sold the Bonds late, as they rallied on fresh short-covering at 141.04, taking a half a point out of the contract. We think the Bonds have reached a near-term low and should be bought again on Sunday night on any fall back under 141.00.
March Dollar Index continues to meet resistance in the 82.70 - 80 area. Next up resistance at 83.30 – 40. We still suspect -- as we were proved right last week – that the Euro wants to hold 1.30. We think the Euro should be sold on any move above 1.3130 and should be covered on dips down to the 1.30 area.
The April Crude Oil, although picking up in Thursday-Friday trade, nonetheless unable to get back above 92.00. We were sellers on the close Friday after having been long the contract on our 91.01 buy stops. We sold the contract at 91.88 in late Friday trade and would expect a retest of 91.00 in Monday’s day session.
The April Gold continued with a ten day range, representing consistent superb shorting opportunities on rallies up to the 1582-84 level. We have now sold the contract nineteen times at that level within the last ten sessions, covering on $5-10 dips. Friday’s retest of the 1560 support area presented a buying opportunity, as we believe the Gold wants to hold the 1560 area for now.
The May Sugar contract picked up Thursday-Friday on fresh Chinese interest and short covering. We suspect there are too many that were short the May Sugar in the 18.20-30 area, looking to cover down at 17.70. No shorts were flushed in Thursday and Friday trade. However we think the supposed Chinese interest into a market with a 7 million ton surplus is meaningless and Sugar should be reshorted, as we did in Friday’s session at 18.83 or better.
May Orange Juice picked up sharply in Friday’s session, touching nearly limit bid. Again large-scale short covering in the May Juice contract from shorts that were in under 1.25, expecting a break at 1.20 in the near term. We think this move was largely short covering generated. Although our 130.10 buy stops were hit in Friday’s trade, which we sold MOC, we would nonetheless be looking to sell the current level.
May Lumber also picked up in late week trade. Our next up order in the May Lumber in Friday’s trade selling at 401.60, covering at 397.60 was done. We think the Lumber should be shorted on any move back above $400, as Lumber is now approaching record levels with falling demand.
Grains – some short covering seen, particularly in the Corn and Wheat in Friday’s trade. We had warned that the Corn and Wheat would come down for a test of $7 respectively. We saw good breaks midweek underneath the $7 level in each with our 6.9975 sell stops triggered in Thursday’s trade in each contract, allowing us to take 10 & 15 cents out of the contracts respectively. We think that these contract are just coming back for a test of the $7 area before resuming their decline. We particularly believe that the Wheat should be sold again on any move back above 7.00.
May Beans – supplies continuing to improve globally. Chinese demand preventing the May contract from falling back under 14.60.We have been consistently shorting this contract on our standing order at 14.80 and covering at 14.65, a trade we have made five times in the last ten trading sessions. We continue to think that the May Beans should be shorted on moves to 14.80 or better.
May Silver continues to be turned back in the same range as has the Gold. We are consistently selling the Silver on our 29.12 standing sell orders, covering on dips down to 28.72, Silver also stuck in the range. Keep trading the ranges until they tell you otherwise.
April Platinum picked up in late week trade again back above 1600. We have been consistently selling the contract on moves to 1606-10, covering on $10-15 dips. We think the Platinum should continue to be sold in the current range.
May Copper continues sloppy action. We were sellers throughout the week between 3.52 – 3.5350, covering on 2 – 3 cent dips. We think that any moves above 3.52 continue to be shortable, given record global surpluses in Copper which continue to build.
Friday short covering in the May Coffee contract as the Coffee held the 1.41 area. We were sellers once again on our standing orders at 1.4420. We think the Coffee should be sold on any move above 1.44 and covered on 2 cent dips.
Good short covering action also seen in Friday’s trade in the May Cocoa. We think the move is substantially overdone with no fresh news in global Cocoa inventories building. We think the Cocoa at current levels is a prime shorting opportunity.
May Cotton contract – we continue to be sellers on our standing orders at 87.50, covering on penny dips. We like the 87.50 area and we think this represents a near term top, as global Cotton inventories are also now in surplus.
Rolling Tops Continue To Be Formed in Equities & Commodities
Written by Al Martin Sunday, 03 March 2013 21:57
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(3-3-13) We continue to trade the March Long Bonds from the long side on dips. We were consistent buyers of the Bonds late week on dips down to the 145.16 area, selling at 145.28 or better. We finally saw a close Friday above 146, as we had promised you in our last week's missive. We believe that 146.04 reaches this level will now give way in Monday's trade and we will look to trade up to the 146.16 area. Traders should be watching the 30-year yields. Any move
March Dollar Index continues to move higher in line with our previous week's missive. With the 81.70- 80 resistance area now surmounted, the Dollar Index now turning up to the 82.30- 40 next up resistance zone. We believe this current area could be a temporary top in the Dollars, as we continue to believe that the Euro will hold 1.30 as it did in all of last week’s trade. However if the Euro can break under the 1.29 area, we would look for further breaks.
April Crude Oil continued to break in line with our previous week's suggestion with the 92.00 level now having been given up, we expect the Oil will come down this week for a hard test of 90.00, where we expect the first test to be held.
The April Gold contract mounted intermittent rallies throughout the week after its test of 1562. We were consistently shorting the Gold above 1580, covering on $5-7 dips. We will continue to look to short the Gold in the coming week's trade, as we believe the 1562 level will not hold and that the Gold will come down for a retest of its annual low.
Sugar continues to be a license to print money and we continue to short the contract on moves in the 18.30 – 40 area, covering on dips down into the 17.95 area. The Unwashed consistently bought the Sugar in the early session, only to give it up late off their 18.00 sell stops, which we have been using to cover our shorts. Supply/ demand fundamentals in Sugar continue to worsen. We look to continue to short the Sugar on moves up to 18.30 or better.
We had warned that the May Orange Juice contract would begin to give ground in this week's session. We were short Friday from Thursday's close at 1.2780. We covered on Friday’s close at 1.2095. Juice had a sharp 7 cent drop in Friday's trade. We think the juice has further to go on the downside.
May Lumber contract -- we had shorted down to the 375 level, two consecutive limit bid days Thursday and Friday. We'd be looking to resell the May Lumber on our standing order at 399.
Grains – finally beginning to pull back. Beans, after their spike above $15 early week, wherein we were sellers at 15.10. We held the position all week, covering in Friday's session on our standing order at 14.43. We think the Beans are coming back down to reality and that the May Beans will come down for a retest to the 14.00 area. We think that strength in the Corn and Wheat is nothing more than short covering and rollover pressure from the expiring March contracts. We would look to sell the May Wheat again on our standing orders at 7.23. We are looking to sell the May Corn on any move up to 7.14.
The May Silver contract continues to trade weaker than the Gold. We were looking to sell the contract on moves up to 28.80 or better as we have been consistently doing, covering on 20 cent dips.
April Platinum – falling back further in line with our last week's missive. With the Platinum being unable to hold 1600, we had suggested 1599.90 sell stops from our last week's recommendation. Ours was hit in Thursday trade which we covered at 1573 on Friday's close, taking $26 out of the contract. We believe Platinum still has lower to go.
We had also warned of a crack coming in the May Copper contract. Indeed we saw the Copper contract trade below 3.50 in Thursday overnight trade. We believe that any move back to 3.53 is a shortable trade.
May Coffee – we continue to short on our standing order at 1.4420, which was filled four times last week, taking a penny out of the contract on each occasion. Although the May Coffee continues to want to hold the 1.43 area, we think that this hold is temporary in that we do not believe a diminishment in Vietnamese Coffee crop to be a near term game changer vis-a-vis supply/ demand fundamentals.
We had warned that the May Cocoa would break the 2100 support area. Indeed in Friday’s trade, we were sellers at 2103, covering MOC (Market On Close) at 2083. Watch in early week trade any retracement back above 2100 should be shorted again.
Late week short covering in the May Cotton contract -- we think is now done. The contract shows resistance at the 85.50 – 86.00 level. We sold the contract twice in that area late week, covering on penny dips. We think the short covering rally in the Cotton is now done.
US Treasury Long Bonds Continue To Climb; Gold Declines in Line With Our Predictions
Written by Al Martin Monday, 25 February 2013 18:55
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(2-25-13) We have been warning traders to continue to trade the March Long Bonds from the long side on dips, as we have been doing now since the first of the year. Indeed we were buyers of the Long Bonds once again in Thursday's trade on our standing orders at 143.20, which we sold on Friday’s close at 144.00. We are watching the 144.16 level in the March Long Bonds and that a close above 144-1/2 would prompt fresh short covering from institutional short sellers.
The March Dollar Index continues to move higher, although it is now meeting resistance at the next up -- meaning 81.70/ 80 resistance level. We think this resistance will be held for now, as we think that Euros are not coming below 1.3100 anytime soon. We continue to short the March Euros on moves back above 1.33.
March Oil – we had been warning of a crack in the March Oil, being the single most overbought industrial mineral on the boards. We were short the Oil from Thursday, when the Oil came under 96.00 and rode it all the way down for the test of 93.20 in late Friday’s lows. We believe that the back of the Oil market has been broken and that it will come down to its supply/ demand reality and that 90.00 is now in the cards.
The April Gold contract came down for a test of 1562, as we had warned in our last week’s missive. Indeed the last low in the Gold had been reached at the very same level. We anticipated a small bounce and covered our shorts at 1563 and got long. We were sellers of our long April contracts in the 1582 area in Friday's trade, and would look to establish shorts again at 1592 level
The May Sugar continues to be topped on moves back to 18.20 or better. We are now consistently selling the contract on moves to 18.20/ 30 covering on 30-40 point dips. Despite recent shilling in the Sugar, we think that the Sugar has lower to go.
The May Orange Juice contract -- turning back once again from the 1.30 area, as recent freeze damage in north Florida crop was less than expected. We continue to think that the Juice is overbought by at least 10 cents at current levels.
March Lumber – we had suggested to sell short again on moves above 393 to be sellers again on moves above 393. In fact we were sellers at 396 early week. Lumber having fallen back after being turned back from a test of the 400 level. Lumber remains dramatically overbought at current prices.
Grains – finally a turn-back in the Beans. We had been shorting the beans in size in a Sunday overnight move above $15 with an average short of 15.10 coming into the morning session. We covered on the close at 14.62. We think that the back of the Beans has now been broken. Unwashed longs were stopped out in Friday’s trade and we think the Beans will come back down for a test of 14.20 within the next five sessions.
The March Silver contract – also continuing to act sloppy. We were short sellers again on moves to 28.80 and higher, covering on 10-20 cent dips. We think that the March Silver is coming down for a test of 28.00.
Also we had warned of overvaluation in the April Platinum contract. Indeed the Platinum fell horrendously in late week trade. We were short the Platinum from 1670 and rode our shorts all the way down to Friday’s 1608 close before covering. With Platinum production in South Africa and Russia now increasing and global demand falling, we think Platinum has nowhere to go but south and would look to establish fresh shorts on any move back to 1630.
We had warned of a coming crack in the May Copper contract. Indeed we saw that crack late week. Our 3.5995 sell stops were hit in Thursday’s trade, which we did not cover until our 3.5180 cover orders were hit in Friday’s pullback. We think that the Copper will not hold the 3.50 level.
The May Coffee contract - we were short again in Friday’s session and are now short from 1.4360, looking for a 5 cent decline. Coffee is now regularly trading down to the 1.37 area. We suspect Coffee prices have lower to go with Arabica prices now falling underneath Robusta prices for the first time ever, bespeaking of a growing global Coffee glut.
May Cocoa – we had also warned that the May Cocoa should be shorted again on any moves above 2150. We continue to look at the 2150 fresh shorting opportunities to take $50 out of the contract.
May Cotton continues to be turned back on moves above 84.00. Recent bullishness in the Cotton, we think, is overdone with global supplies continuing to build. We are short sellers of the May Cotton on moves above 84.00.
We also believe that the Corn and Wheat have lower to go. We were short the Wheat midweek from 756 in the March contract finally covering in Friday’s 718 close. We think that with global supplies of Wheat building once again, Wheat will come down for a test of $7. We also feel that the March Corn will come down for a test of the 6.75 area.
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