Saturday, June 14, 2014

Weekend Commodities Report: The Daily Charts

Commentary will appear tomorrow. Enjoy the charts for now and enjoy the weekend/World Cup!

Agriculture: DBA
I had been recommending DBA for a while, bought in and then on Thursday sold out at a small loss because of my preoccupation with the hourly charts and general perceived weakness in the market. Then what happens on Friday? It goes up 0.91% and sits comfortably at the resistance set back in March and April with two lows. It goes to show my daily charts are always stronger.

"Buy" signal on the RSI has been made, momentum has just gone positive and the slope on my PPO indicator has just turned up. I renew my fears of a generally weak market and an overall downturn in commodities. I will therefore list this as a "weak sell." The middle Bollinger band is rapidly approach and I expect it to hover around this area.

Aluminum: JJU
I called a "sell" earlier in June on JJU and I maintain it. This shallow, albeit wide, incline channel seems to be taking control but a fall back to $17.80 seems appropriate before it retests the upper channel. With three taps on the shallow horizontal channel I can't tell if its going break down and resume the larger decline. This will play out between now and beginning of July.

Coal: KOL
KOL doesn't look very healthy but did have a stellar day on Friday. This declining red channel looks like it's beginning to take over but I haven't seen a convincing "sell" sign yet (except on the RSI which has been making lower-highs for a month now).

Coffee: JO
My "buy" on JO was perfect. The blue "buy" arrow was placed in advance of an anticipated breakout and that's exactly what happened on Friday. It doesn't, however, look amazingly strong so I'm anticipating a "sell" at around $36.00.

Commodities Index: DBC
Me "sell" signal on DBC was also perfectly placed. The declining red channel is in charge now. On Friday there was an open above the channel but as the day progressed it closed back within the channel (not a breakout). On Thursday I issued a "sell" and I have shorted commodities.

Copper: JJC
Again, JJC had a beautifully timed and positioned "sell/short" and now I think the moment has arrived for a weak rebound. I think JJC will rise from here but I do not consider JJC to be a "buy" worthy of any attention. JJC does have some oversold conditions to contend with so I expect momentum to turn upwards in order to work them off, but I'm not confident a corresponding rise in JJC price will happen.

Corn: CORN
CORN has fallen a lot further than I imagined (as you can tell from all the resistance lines I've drawn in). Earlier in May I felt pretty weak about CORN making it to $30.60, but here we are! It was a depressing fall. The descent wasn't wide but did spend most of it's time in the lower half of the channel. I've issued a "weak buy" similar to JJC because a bounce will happen here, but I'm not very confident it will be considerable enough worthy of a placement. Momentum is looking nice, though.

Cotton: BAL
BAL is looking nice, and similar to CORN and JJC after a steep decline in a fairly narrow channel a bounce is in order. I prematurely issued a "buy" at the beginning of June which has aborted but now this second time looks much better. The channel developing looks shallow and what seems to be developing is a 'relief rally' to work off the oversold conditions. In addition to JJC and CORN, this bounce doesn't look substantial. I could see this channel widening, but the slope will remain the same meaning a gain of only about $0.50 will take place.

Crude Oil: USO
USO is currently being goverened by emotions and political events. No charts can really capture the volatility at the moment. On the announcement earlier in the week of a possible (and highly likely) rebel siege of Baghdad I issued a "buy."

Natural Gas: UNG
UNG looks like it's set for a bounce down to complete this descending triangle shape. I'd recommend a "sell/short."

Gold: GLD
I warned everyone back when I issued my "buy" that this felt like a relief rally.  The descending resistance line at $131.00 will be tested again but this is not that time. I'm issuing a "sell" since I do not expect it to through $123.50.

Lithium: LIT
The bounce has completed and a "sell" has been issued on LIT. A lower high is almost in place on the RSI so I expect a breakdown imminently on the chart.

Palladium: PALL
I'm not sure how close PALL is going to come to the lower channel resistance line, but I have indicated a blue arrow in approximately the region where I would expect it to happen. Please bare in mind that PALL has been charging on for some time, so although I do not expect to a see a formal declining channel, horizontal movement between $77.00 and $83.00 would allow it work off some of the overbought conditions. The channel seems pretty solid since we don't even have a single hit on the lower channel yet.

Platinum: PPLT
This strange inner versus outer triangle is unfolding (I personally have never witnessed one). We had a decline below the inner triangle and now we are maneuvering towards the outer one. I've indicated a "buy" arrow in approximately the area where I expect that to happen. PPLT and PALL are the same victims of events in South Africa so after it's tap I expect PPLT to continue on moving upwards.

Silver: SLV
SLV made a surprising development - it broke out of the wide declining channel and charged towards the outermost resistance line set up by highs February and March 2014 and November 2012. This is the second to last resistance line before a perceived break out and move upwards. It will not break out I am afraid. I really feel that this is another test and a decline will follow.

Soy Bean: SOYB
Presented without comment.

Sugar: SGG
We're getting close to my perceived convergence point at around $53.50. We've waited a long time but I think an upper test is coming of $56.50 or so. Listed as a "buy."

Uranium: URA
I'm not entirely unconvinced that this declining red channel has run it's course. If you made a purchase at my call of $14.20 I'd hold it because this could retest $15.05.

Wheat: WEAT
Just as CORN kept declining with a premature "buy" signal issued, so too has WEAT. For the time being I think we have a bottom in place at $14.00. I am re-issuing my "buy" for WEAT.

Jakob Richardson © 2014