A quick look a some of my favorite agricultural commodities, along with updated price targets. The scope and duration of any rally in the commodity sector will likely be commensurate (and dependent) on a reversal in the US dollar index.
Although the SPY (S&P 500 Index tracking etf) bounce slightly exceeded the two previously posted bounce targets, moving about 1.75% above the former T1 level & less than 3/4% above the "next resistance level", that bounce, assuming that it is complete, was well within the normal range of a counter-trend bounce as the SPY stopped [...]
It looks like commercial traders (i.e.- the "smart" money) are also looking for an imminent reversal in the nearly parabolic rise in the US Dollar. Over the weekend, a couple of fellow traders had forwarded this article from McClellan Financial Publications which discusses the extreme high net short interest amongst commercial traders. As Tom McClellan [...]
I've recently discussed the strong (inverse) correlation between the US Dollar and gold prices along with my thoughts that both gold & the dollar are likely to reverse course soon. In the previous update showing the $USD (US Dollar Index) 20-year monthly chart, I had stated that next solid monthly close above or below the large symmetrical triangle pattern would most likely determine the next major direction in gold. As of the close on Tuesday (Sept month end), the $USD did print a solid close above the triangle pattern, certainly a bullish technical event on face value. Although I continue to hold off on adding any exposure to gold or the mining sector, I have yet to throw in the towel at this point either. There are a few reasons for not writing off gold at this time nor jumping on board the crowded "bullish $USD" bus just yet. First of all, as of today, despite the recent breakout in the $USD, gold (GLD) has just fallen to test the mid & late 2013 lows, thereby completing the triple-bottom scenario that I've been discussing as a possibility for many months now. I also continue to remain open to the possibility of a brief washout break below those previous lows before a lasting bottom is finally hammered out in gold but again, I'm just not confident enough to add any more exposure to the metals or miners until I see some decent technical evidence of a reversal in gold (and silver) prices. Another reason that I have not yet jumped on the bullish dollar bandwagon, despite the recent breakout above the long-term downtrend line in the dollar index is two-fold. First, the $USD has significant horizontal resistance just overhead to contend with. The monthly $USD chart below is an EOD (end-of-day) chart and has yet to reflect today's sharp rally in the dollar but the UUP (Dollar Index Tracking ETF) weekly chart below does a fairly decent job of tracking the index and shows today's move pushing into the resistance zone. Finally, the $USD Index is simply a sum of its parts. In fact, although the $USD is comprised of a basket of six currencies, the top two largest components account for over 70% of the performance of the index: The Euro at a very top-heavy 57.6% weighting, followed by the Japanese Yen at a 13.6% weighting. Therefore, where the Euro & Yen are heading will most certainly determine the future path of the US Dollar Index. The chart below is a 10 year weekly chart of the $XEU (Phily Euro Index). What stands out to me on this chart is the fact that the $XEU is only about 2 1/2% above a major multi-year uptrend support line which defines the bottom of a large triangle pattern. Not only are prices just above a major support level but the $XEU is also at rarely (if ever) seen oversold levels on the weekly RSI. Although admittedly we have a small sampling of such readings reference, previous such readings [...]
MCP 60 minute After months of relentless selling, MCP could provide a quick trade to any of these near-term targets on this above-avg. breakout above the 60 minute downtrend line. Those three horizontal lines are the actual resistance levels, best to set your sell limit orders a few cents below your preferred target(s). [...]
SPY 60 minute-2 Oct 2nd The reaction off of the T2 support level is likely to terminate here at the former T1 support, now resistance level, thereby providing an objective short entry at this time. The SPY made a very brief, momentum fueled overshoot of the T2 level as shown by this 60 [...]