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April 2019 Editors Comments

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Special Historical Reports

MRCI publishes a new round of volumes in its series of special reports each year.

Hottest off the press:

2019 Historical Grains: this 174-page volume contains seasonal analysis for corn, oats, and wheat KC, CBOT, and MGE; 122 seasonal and spread strategies for year round trading ideas.

2019 Historical Live Cattle/Feeder Cattle:  this 148-page volume contains seasonal patterns and weekly charts for each delivery and several spreads, and also live/feeder cattle spreads; historical daily charts; cash prices at several locations; 66 seasonal and spread strategies for year-round trading ideas.

2019 Historical Lean Hogs & Hog/Cattle Spreads:  a 126-page volume with seasonal patterns and weekly charts for each delivery and several spreads, including hog/cattle spreads; historical daily charts; 76 seasonal and spread strategies for year-round ideas.


CRB & Physical Commodities


Follow through!!!  After closing December at an 18-month low near 170, the CRB Index completed a December/January double bottom at 168 and reversed to close January at about 180.  Between mid January and mid February, the Index traded in a bull flag formation from which it then broke out to trade as high as 185 before closing Februaryat 183.  From that high it may now be pulling back to retest its flag breakout near 180 and/or its 50-day moving average, currently near 178 -but slowly beginning to rise.

The question now before us then is whether a pullback will hold 178-180.  If so, the CRB may be building an inverted head-and-shoulders bottom.  If so, the head would be 168 and the neckline at 185.

What could be bullish that might drive the Index higher?  Wheat will soon emerge from dormancy and be vulnerable, with winter wheat acreage thought to be at a 100-year low.  US corn, soybeans, and cotton have yet to be planted.  What about energy, the most consequential complex?  Is natural gas building a long-term base?  What will Mideast crude oil suppliers do?  Will US/Chinese trade talks resolve tariff and trade issues?

And perhaps of greatest import, what will the US dollar do?

Maybe we better be ready to ...


Trade 'em,


Jerry Toepke

Last Updated on Tuesday, 05 March 2019 08:09
 

March 2019 Editors Comments

E-mail Print

Special Historical Reports


MRCI publishes a new round of volumes in its series of special reports each year.

Hottest off the press:

2019 Historical Live Cattle/Feeder Cattle:  this 148-page volume contains seasonal patterns and weekly charts for each delivery and several spreads, and also live/feeder cattle spreads; historical daily charts; cash prices at several locations; 66 seasonal and spread strategies for year-round trading ideas.

2019 Historical Lean Hogs & Hog/Cattle Spreads:  a 126-page volume with seasonal patterns and weekly charts for each delivery and several spreads, including hog/cattle spreads; historical daily charts; 76 seasonal and spread strategies for year-round ideas.


CRB & Physical Commodities


What a difference a month might make!  The CRB Index ended the year at 169.80 not far off its 18-month low of 166.48.  Those looking for a collapse through that low were immediately disappointed.

The Index had made a high in May at 206.95, fell, rallied to a new high in October at 201.72.  But as the stock market, so too did the CRB.  At the end of 2018, it looked bleak for commodities.

But within about a week over the transition to a new year, the Index made daily lows of 168.21, 168.37 and then 168.26 a sequence suggesting equilibrium.  That may seem like minutiae, but we are looking for hints to whether disinflationary markets have evolved into inflationary ones.

That January then reversed December adds to mounting evidence offered by a possible turn downward it the US dollar, for example, which itself is reinforced by stronger gold prices.  Energy markets are again flickering with potential.  If/when US-China tariff talks reach an agreement, soybeans and corn may rally, at least modestly.  US wheat acreage, to be estimated February 8 in a release delayed by government shutdown, could be historically low.  What if weather continues to be erratic?  Could agricultural production be at risk?  Maybe we better
be ready to ...


Trade 'em,


Jerry Toepke


Last Updated on Monday, 04 February 2019 09:49
 

February 2019 Editors Comments

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CRB & Physical Commodities


Conventional wisdom says the Chinese economy is and will continue slowing, decreasing demand for commodities in general and depressing their prices.  Is that why the CRB Index had such a bearish December?

After making its most recent high at 200.04 in early October, the CRB fell again through much of December, making a low on Christmas Eve at 168.21 just above its June 2017 low at 166.48.  After a powerful surge on the day after Christmas up to 173.15, it spent the remainder of 2018 between those two levels.

But if daily and weekly indicators were oversold before, they are grossly oversold now.  The 50-dma is below the 200-dma, but 50-week is above the 200-week.

Gold, grains, and precious metals were all higher on the first day of 2019.  Does that also suggest it is overdone?  The market will find out more when USDA reports are released January 11, but it has been suggested that US winter wheat acreage could be the lowest in 100 years.  Precious metals may have begun a trend higher.  Silver, for example, appears to have broken out of a multi-month low.  Has crude oil put in a low?  Was that natural gas rally in December just a fluke - or a harbinger?


Maybe we better be ready to ...


Trade 'em,


Jerry Toepke

Last Updated on Wednesday, 02 January 2019 15:54
 

January 2019 Editors Comments

E-mail Print

Special Historical Reports


MRCI publishes a new round of volumes in its series of special reports each year.

Hottest off the press......

2018 Historical Indices: a 186-page volume that arrives just in time for the "best six months of the year," with contract-specific seasonal patterns and weekly charts for domestic indices S&P500, S&P Midcap 400, NASDAQ, Russell 2000, DJIA and several international markets; with 62 domestic and 108 international seasonal strategies.

Recently published......

2018 Historical Interest Rates: a 222-page volume with seasonal patterns and weekly charts for each delivery month of US financial instruments such as 30-yr bonds, 2-, 5-, and 10-yr T-notes,
and Eurodollars; also seasonal analysis of several international debt instruments and of US Treasury spreads in exchange-recognized ratios; complete with 206 seasonal and spread strategies.

2018 Historical Forex: a 218-page volume with seasonal analysis of A$, C$, Br-pound, euros, J-yen, Sw-franc, Mexican peso, New Zealand $, and the US$ Index; contains seasonal patterns and weekly charts; with 78 seasonal and 158 spread strategies.

2018 Historical Energy: this 282-page volume contains seasonal analysis of crude oil, heating oil, gasoline, and natural gas; includes 190 seasonal, spread (both intra- and intermarket), and crack strategies.

2018 Historical Brent: this 124-page volume contains seasonal analysis for Brent crude oil (used by most of the world for pricing crude) and gasoil (similar to heating oil); with 74 seasonal and spread strategies, including Brent vs. crude light.

2018 Historical Softs: this 154-page volume contains seasonal analysis for cocoa, coffee, cotton, sugar, orange juice, and rice; with 84 seasonal and spread strategies for year-round trading ideas.


CRB & Physical Commodities


Ugh...November was miserable.  After a promising beginning to the year, the CRB broke down to the lowest low since August 2017.

What happened?  The US$ was strong.  Crude oil crashed from almost $77 at the beginning of October to trade below $50 at the end of November.  Tariff wars kept soybeans at or near their lows, holding down wheat and corn.  All metals with the exception of non-CRB component palladium declined back toward lows.

How bad was the CRB itself?  From the early October high of 201.72, the close for that month was 190.97.  The November high was 193.66, but the low was 178.79 just below the November close of 181.74.

The good news?  The daily chart shows divergence with the RSI, and its MACD is very low.  The weekly chart suggests a reversal upward for the last week of November.  On the first day of December, after tariff pressures eased (modestly? temporarily?), all metals, rose, crude oil closed up well over $2, with products higher Several softs markets were up.  Was that a turn?

Also of note, the 10-yr to 2-yr yield curve was last seen flattening back toward its low of 18 basis points.  Will it invert?

And what about the dollar?  

Maybe we better be ready to ...


Trade 'em,


Jerry Toepke



Last Updated on Wednesday, 05 December 2018 10:21
 

December 2018 Editors Comments

E-mail Print

Special Historical Reports


MRCI publishes a new round of volumes in its series of special reports each year.

Hottest off the press......

2018 Historical Indices: a 186-page volume that arrives just in time for the "best six months of the year," with contract-specific seasonal patterns and weekly charts for domestic indices S&P500, S&P Midcap 400, NASDAQ, Russell 2000, DJIA and several international markets; with 62 domestic and 108 international seasonal strategies.

Recently published......

2018 Historical Interest Rates: a 222-page volume with seasonal patterns and weekly charts for each delivery month of US financial instruments such as 30-yr bonds, 2-, 5-, and 10-yr T-notes,
and Eurodollars; also seasonal analysis of several international debt instruments and of US Treasury spreads in exchange-recognized ratios; complete with 206 seasonal and spread strategies.

2018 Historical Forex: a 218-page volume with seasonal analysis of A$, C$, Br-pound, euros, J-yen, Sw-franc, Mexican peso, New Zealand $, and the US$ Index; contains seasonal patterns and weekly charts; with 78 seasonal and 158 spread strategies.

2018 Historical Energy: this 282-page volume contains seasonal analysis of crude oil, heating oil, gasoline, and natural gas; includes 190 seasonal, spread (both intra- and intermarket), and crack strategies.

2018 Historical Brent: this 124-page volume contains seasonal analysis for Brent crude oil (used by most of the world for pricing crude) and gasoil (similar to heating oil); with 74 seasonal and spread strategies, including Brent vs. crude light.

2018 Historical Softs: this 154-page volume contains seasonal analysis for cocoa, coffee, cotton, sugar, orange juice, and rice; with 84 seasonal and spread strategies for year-round trading ideas.


CRB & Physical Commodities


As of October 23, the month that began so well for the CRB Index is in danger of failing.  After September closed at 195.16, October raced to its high of 201.72 in 3 days.  The low?  194.37 on October 23, with markets soft the day after.  That leaves the index caught between the 50-dma at 193.95 and the 200-dma at 196.25.  The 50 is below the 200, but both are rising.

The 50-wma at 195.25 remains above the 200-wma at 192.27, with the 50-wma rising.  So, closing above the October high (201.72) would be bullish, closing above the May high (206.95) would be very bullish.  Closing below the August low (186.74) would be bearish.

Corn and soybeans tend to enjoy post-harvest rallies but have been caught in ranges of 330-375 and 790-900 since mid June.  CBOT wheat has been in a range of about 500-525 for 6 weeks.  Closes above 1245 in gold and 15.00 in silver would be moderately bullish.  Is copper forming a massive head-and-shoulders bottom, with a potential head at 255 and neckline at 287?

What about coffee and sugar, 35% and 41% higher in barely a month?  Natural gas broke higher from a 7-month range.  Crucial levels in crude oil are the 76.90 high and the August  low of 64.43.  And what about the US dollar, and tariffs, and politics, and ...?

Maybe we better be ready to ...


Trade 'em,


Jerry Toepke

Last Updated on Tuesday, 27 November 2018 08:23
 
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