Sunday, June 01, 2014

Weekly Commodities Report: Part II

Silver: SLV
SLV is approaching an interesting junction in the coming trading sessions. The low achieved back in late June of the previous year is upon us. I do not feel optimistic that it will be held. SLV will still be listed as a "short." What's most worrying are the indicators, particularly MACD and MACD histogram, that have all been virtually horizontal since mid April. I've stated this before in other situations (in fact I did in a previous article called "Apathy") that when this occurs the equity will generally continue the pattern it was taking prior to the horizontal 'apathetic' phase, which in this case is down.
  • Not only are the indicators down but my TRIX, MACD and PPO signal lines are beginning to point down as well. 
  • My KST indicator has also crossed over (it serves as a good confirmation signal for me)
  • I maintain my prediction that a bottom at around $17.00 will be achieved in the coming months for SLV before a genuine transition to an upward channel is seen. 
  • The significance of this fall cannot be understated. A low of around $17.00 is in place due to a bottom put in several times around mid 2010. This is why I feel that all this falling nonsense will stop around this level. However, if this fails we're looking at $14.25. 
  • From here like my stocks and equities a year or two will be spent trading in a shallow band ("cup and handly pattern").

Lithium: LIT
Not much to report, but I do remember calling the transition to an upward channel. Some resistance appearing around $13.60. "Buy" recommendation holding until the resistance line. I will advise accordingly in the coming weeks.

Natural Gas: UNG
Not much to report here either. UNG has been looking good. Let's have a "sell" signal around $26.00. Strong resistance is coming into play there and there are a lot of tantalizing resistance lines from there to it's base set at $24.00. It's longer term decline will continue.

Palladium: PALL
PALL continues it's strong upward trend but I fear some more fluctuations will be seen in the near term in preparation for a new more permanent transition.
  • Near term MACD histogram has transitioned to negative.
  • Watch hourly reports in the coming week or so because momentum has been gradually condensing. 
  • "Sell" signal issued although minor movements up may be made. Fluctuations  may continue at this level. 

Platinum: PPLT
PPLT has assumed a very interesting configuration - two incline triangles, a smaller one within a larger one. PPLT is currently in a sharp and narrow decline. I'm issuing a "sell" signal on PPLT (red arrow being placed just a few sessions retrospectively since PPLT was a new addition this week). I do not recommend a short on an equity with a condensing configuration.
  • TRIX signal line has just crossed over with the MACD histogram already negative.
  • MACD signal line has also crossed over downwards. 
  • Short term PPO has crossed downward.
  • I am not a fan of deliberate symmetry because its very rare but it doesn't 'feel' like it will hold at the first resistance line just above $140.00. I think a bounce off of $138.00 is much more likely.
  • Because of events in South Africa there's a lot of upward pressure on this precious metal. "Buy" signals are pending.

Soy Bean: SOYB
Trending seems to be in a very large upward channel. Currently it appears to be cresting after the last upward thrust between January and May. I have issued a "sell" alert of SOYB.

Sugar: SGG
If I had the cash I would have stayed in the trade, but I think shorting crude oil will be more lucrative in the short term. I expect the fluctuating decline to just below $54.00 to continue at which point a "buy" will be issued.

Uranium: URA
URA has been the darling of the commodities market. It bounced off of $13.89 just as predicted and is merrily on it's way having broken out of the descending channel on the two hour chart. The question now becomes, "will it break out of the larger descending red channel?" The bounce we have been enjoying was off an intermediate resistance line meaning that the larger downward trend may not be broken. I like where URA is going but a "sell" should be put in at $15.50 in case this turns back around. There are a lot of coincident resistances put in by bottoms and tops from October, December, and January so my inclination is a move downwards off of the upper resistance channel line.

Wheat: WEAT
A "buy" is being issued imminently for WEAT. Indicators having been moving up since its amalgamation at around $15.00.
  • MACD histogram is not yet positive so this may fall to around $14.50 once contact with the upper limit of the channel is established. 
  • Follow the hourly chart with me in the coming week to see if a breakout happens, but right now I like the look of it. A tap should be made around $15.25 to $15.30.