Resistance

I just wanted to post this charts real quick today, I’m getting married tomorrow and so as I’m sure you can imagine I have a lot going on today.

We are now back to the top of our rising channel. A close above 1410 would be a big win for the bulls.

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Disclaimer: Everything in this post is meant for educational and entertainment purposes only. Do not construe anything written in this post or blog as a recommendation, advice, or an offer to buy or sell any securities. I or my affiliates may hold positions in securities mentioned in the blog. Please see my Disclosure page for full disclaimer.

Gasolina

While doing my morning reading I came across an article from Time Moneyland discussing that gas prices are actually lower today than they were a year ago. I thought this would be a good time to check out the chart of spot gasoline and see where we stand.

Well Brad Tuttle was right, we are lower than a year ago as the horizontal line shows. The current setup in unleaded gasoline looks pretty similar to 2011. We had a rise to $3.40 with an oversold RSI and CCI in late April. Will the drop look like 2011 too? The 70-period CCI has done a fairly good job at showing us short- and intermediate-bottoms in gasoline when it breaks below -100. We aren’t there yet but with the drop in volatility we looked at yesterday, it’s not unlikely we continue to fill the price gap created in February which would take us down to $3.00.

 

Moneland article: Gas Prices are Cheap

Photo: Daddy Yankee

 

Disclaimer: Everything in this post is meant for educational and entertainment purposes only. Do not construe anything written in this post or blog as a recommendation.

Checking in on the Futures Data

Each week I check two places to get a feel for what’s going on in the futures market. First I head over to see what Peter Brandt has to say, Peter is one of the brightest traders and commentators when it comes to the futures market. Then I head to the COT data. I use to compile the data myself but I have turned to other sources to do it for me. Today I’m going to dive into a few charts from Finviz that shows the commercial hedgers as well as the large traders and small traders net positions.

 

First up is the soybean market. This chart stuck out to me due to the large divergence in large and commercial trader’s net positions. I’ve marked with orange boxes previous occurrences where large traders have been extremely net long  while commercial hedges have been extremely net short. As you can see this has not fared well for the soybean market during the previous three occurrences. Although there was a large divergence between these two groups in ’07 and ’08 which took longer to cause a drop in soybean prices.

 

Corn has been creating a descending triangle since mid-2011, the further the price of corn gets to the apex the less likely we will see the measured move of $200 that the pattern suggests. I’ve highlighted with orange boxes when the commercial hedges have gone net long corn, which doesn’t last very long but tends to put in an intermediate bottom in the crop. What’s different about today is the overly net long large traders, which hasn’t been the case when commercials get net long. The commercials haven’t gotten net long quite yet, but something to watch.

 

30-year Treasury’s are seeing the commercial traders approaching a net short position which has caused weakness in the bond market. Although in 2009 we saw the 30-year bond take a nose dive while commercials were heavily net long

 

Commercials have gotten extremely net long the Japanese yen, they haven’t had this many net long contracts since back in 2007.

 

Disclaimer: Everything in this post is meant for educational and entertainment purposes only. Do not construe anything written in this post or blog as a recommendation.