Crude oil futures in the March contract are trading far below their 20 and 100 day moving average settling last Friday in New York at 49.13 a barrel while currently trading at 46.00 down over $3 for the trading week continuing its bearish trend and if you’re still short this market my recommendation would be to continue to place your stop loss above the 10 day high which currently stands at 51.73 risking about $6 or $6,000 per contract plus slippage and commission from today’s price levels.
The next level of major resistance is the January 13th low of 44.78 and if that level is broken I think prices could head into the mid-30s as over supplies are overwhelming at the current time plus the fact that the U.S dollar is hitting an 11 year high with the Euro currency down over another 100 points this Friday afternoon continuing to put pressure on the entire commodity sector.
The king of Saudi Arabia died this week sending prices up to 47.76 on the night session before succumbing to pressure once again as the U.S dollar is starting an exponential move to the upside as traders continue to sell all rallies in crude oil. If you have not been short this market I certainly would sit on the sidelines as you have missed the boat, however I am definitely not recommending any type of bullish position as I still think prices go lower, however the 10 day stop will not be lowered until next Friday so you’re going to have to be patient with this trade as the trend still remains bearish in my opinion.
Trend: Lower
Chart structure: Improving
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Gold futures in the February contract are trading above their 20 and 100 day moving average settling last Friday in New York at 1,277 while currently trading at 1,288 an ounce down about $12 this afternoon as I have been recommending a bullish position when prices cracked 1,245 and if you took that trade place your stop at the 10 day low which in Monday’s trade will be 1,217 still risking about $70 or $7,000 per contract plus slippage and commission, however the chart structure will start to improve on a daily basis starting next week.
Gold prices hit a 5 month high this week and now is being considered as a currency and not a commodity as nobody wants to own any of the foreign currencies especially the Euro currency which was down another 100 points today sending the U.S dollar to an 11 year high as countries like Yemen are collapsing right in front of our eyes and many other countries are getting crushed by the low crude oil prices so investors are seeking a safe haven in gold despite today’s negative tape.
The chart structure in gold is poor at the current time as prices have gone up sharply in recent days as that will tighten up but the trend is your friend in the commodity markets and the trend in the precious metals is higher as I have been very bearish the entire commodity sector except for gold and silver and I will stay with that theory, but continue to make sure you place the proper amount of contracts risking 2% of your account balance on any given trade. If you have not entered this market on the bullish side wait for another price dip lowering risk so keep an eye and sit on the sidelines waiting for a retracement before entering and then continue to place the stop at the proper level.
Trend: Higher
Chart Structure: Improving
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Coffee futures in the March contract settled last Friday at 171 while currently trading at 159.80 down around 1500 points for the trading week as I’m still sitting on the sidelines waiting for a trend to develop as prices have traded down for the 6th consecutive trading session right at major support at 160 & if prices break that level you’re looking at a bear market as we have not seen these prices since last February.
Coffee futures are trading below their 20 and 100 day moving average telling you that the trend is to the downside, however the chart structure is terrible at the current time but I do believe lower prices are ahead but I’m not recommending any type of futures position as rain has hit key coffee growing regions and it certainly doesn’t look at this time that we are going to have a back to back drought situation so the trend is lower and I do think prices can trade as low as 140 in coming weeks as the commodity markets in general are still are headed lower in my opinion.
Coffee is considered a luxury item and is still historically relatively expensive as I will keep an eye on this market and wait for better chart structure to develop as right now the 10 day high is too far away & does not meet my criteria that’s why I’m sitting on the sidelines as the risk is too high but I certainly am not recommending any type of bullish position in this market at all.
Trend: Lower
Chart Structure: Awful
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