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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
 

November 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 Metals: this 84-page volume analyzes gold, silver, copper, platinum with seasonal patterns and weekly charts; presents 72 seasonal and spread strategies.

Recently published:

2018 Historical Interest Rates:  a 222-page volume with seasonal patterns and weekly charts for 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; 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 and gasoil (similar to heating oil); with 74 seasonal and spread strategies, including Brent vs. crude light.


CRB & Physical Commodities


As bad as August looked for the CRB Index, September may have been almost as good.  The CRB closed August at 192.96 but September at 195.16.

A higher monthly close, yes.  But the chart shows more.  Although the 50dma (192.19) is below the 200dma (195.56), the index is poking at the 200-dma.  Better still, and perhpas surprisingly, the rising 50-week ma (194.51) crossed over the still declining 200-week ma (193.18) during September!

Now what?  Gold, silver, platinum, and copper are still grossly oversold, and four tend to rise into winter.

Wheat harvest is complete.  Corn and soybean harvests are underway, but prices for both typically make their seasonal low during early October.  Soybeans may have already made theirs, and corn may also have made its low then, although the nearby weekly chart made its low in June!  despite tariffs, a new aggreement with Canada and Mexico may help prices.  Further, US officials in Beijing reportedly see Chinese corn supplies ending 2018-19 at the tightest in 50 years!

Crude oil prices continue to rise, exceeding $75 on October 1.  Exports from Iran, Venezuela, and Libya lag.

And the US dollar?  

Maybe we better be ready to ...


Trade 'em,


Jerry Toepke

Last Updated on Wednesday, 31 October 2018 07:42
 

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

CRB & Physical Commodities


Sigh ... tariffs, now emerging markets.  What next?

After trading to a 3-year high in May at 206.95, the CRB fell to as low as 186.74 in mid August.  As it did, it fell below the 50-day ma (dma) which fell below the 200-dma.  By the end of the month, it did retrace back up to 193.63 in a retest of the 50-dma at 193.42 (on August 31) but closed lower for the month at 192.12.

As ugly as is the daily chart, the weekly holds out some hope.  The rising 50-week ma - 193.93 - is converging with the declining 200-week ma at 194.24.

Unfortunately, September got off to an ugly start.  Allegedly precious metals got hit hard as the US dollar rose, with silver making a new low for the move only 40 cents off its 9-year low.  Coffee made a 12-year low.  Wheat got hammered.  Crude oil was higher but only because a weak hurricane approached the US Gulf Coast.

Discouraging sentiment.  Lots of supply in several markets.  Strong US dollar.  Money still flowing into stock markets.

Can it get worse for commodities?  Of course.  But will it?  For how long can the US dollar remain strong?  How long can US stocks continue to climb without a significant correction?  If stocks do correct, will commodities rally?  Or will they be too depressed?

Maybe we better be ready to ...


Trade 'em,


Jerry Toepke

Last Updated on Wednesday, 03 October 2018 12:34
 
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