Friday, October 31, 2014

Commodities Report: Daily Charts

I have to work two 12 shifts at the care home this weekend and again on Tuesday so I'm going to do my best to update the charts, post the weekly charts and add the commentary.

Agriculture: DBA
 
Aluminum: JJU

Coal: KOL

Coffee: JO

Commodities: DBC

Copper: JJC

Corn: CORN

Cotton: BAL

Crude Oil: USO

Gold: GLD

Lithium: LIT

Livestock: COW

Natural Gas: UNG

Palladium: PALL

Platinum: PPLT

Silver: SLV

Soy Bean: SOYB

Steel: SLX 

Sugar: SGG

Timber: CUT

Uranium: URA

Wheat: WEAT




Jakob Richardson © 2014

Before the Bell: Silver (SLV) to $13.00 and Gold (GLD) to $96.00

I had already shorted gold and silver with DSLV and DGLD so yesterday was a good for me. Imagine my surprise waking up this morning and going to 321gold.com and seeing the KITCO ticker saying gold was down $27.00 (now down $33.60). At the time of writing this silver is down 2.1% and gold around 2.6%. I've posted the monthly charts for two reasons. The first is that my daily and weekly charts are already so low I simply don't have any space left, and second, long term perspective after a catastrophic fall like this requires only long term thinking. I've been bearish on precious metals since mid summer and in my commentaries I have not let up on this theme. Posted below you will see the current monthly channel that SLV and GLD are in. The lowermost support line for SLV comes in at about $13.00 and around $96.00 for GLD.

SLV is leading GLD in this fall (extremely bearish) and has already passed through it's 62%, 50%, and 38% Fibonacci levels. Except for support at $13.00 it's entirely possible for SLV to breakdown from the descending channel like many commodities have already.
GLD: Gold Index ETF Monthly Chart
SLV: Silver Index ETF Monthly Chart

Jakob Richardson © 2014

Jehovah's Witnesses don't celebrate halloween. I guess they don't appreciate random people coming up to their door.

Important news from around the globe:

  • Some Halloween costumes that are a cut above the rest (The Chive)
  • European stock rally after Japan boosts stimulus (Bloomberg)
  • Algeria plans to be leading player in liquid natural gas bunkering (Ship and Bunker)
  • Market "explodes" higher as Bank of Japan goes all-in, QE increase to 80 trillion (Zero Hedge)
  • The real story of why oil prices went down so far so fast (Financial Post)
  • Falling bank deposits in China provide another warning sign (Bloomberg)
  • Commodities:
    • Gold tumbles with silver to lowest since 2010 (Bloomberg)
    • Emerging market currencies hurt by oil, metals (Bloomberg)
    • Alert: Gold down $26.00 and silver down $0.53 three hours before opening
    • Metal investors head for the exit amid slowdown (South China Morning Post)
  • Meh...Porsche Panamera Exclusive 570 horsepower 3.9 seconds 193 miles per hour (Hi Consumption)

Thursday, October 30, 2014

Commodities Report: Daily Charts ("...a whiff of deflation has returned, again...")

Some critical events have taken place on the charts the importance of which I fear is lost on most people. Recall over the weekend I kept harping on about "false bottoms" and "further breakdowns?" What happened to silver (SLV) today is a foreshadowing of what will happen (I expect) to most other commodities. The establishment of that first bounce after the sharp decline starting about ten days ago simply widened and continued the preexisting downward channel. This fall has only just started.

Peculiarly we are seeing the same pattern play out now with natural gas (UNG) albeit in a hugely reduced form largely because heating season begins in three weeks. A bounce occurred off of the lowermost resistance line putting it back in it's previous declining channel, but what I think this is setting up is another fall to about $18.60 and possibly beyond. The "false bottom" has been set at around $19.00.

SLV could be indicator of what will happen for other commodities that also produced this "false bottom" pattern meaning that the line I drew for them is just a step down on a very long staircase. 

The only area of commodities where we are not seeing this are the agricultural's. Some of them like CORN and WEAT had a bounce a few weeks ago and have enjoyed a strong ascent since then which hasn't broken. Others, like JO, may be making new patterns upwards and still others like SOYB have just started their new transitions to ascending patterns. COW still looks strong and has for a while.

Strong recommendations:
  • Short gold (GLD)
  • Short silver (SLV)
Agriculture: DBA

Aluminum: JJU

Coal: KOL

Coffee: JO

Commodities: DBC

Copper: JJC

Corn: CORN

Cotton: BAL

Crude Oil: USO

Gold: GLD

Lithium: LIT

Livestock: COW

Natural Gas: UNG

Palladium: PALL

Platinum: PPLT

Silver: SLV

Soy Bean: SOYB

Steel: SLX 

Sugar: SGG

Timber: CUT

Uranium: URA

Wheat: WEAT



Jakob Richardson © 2014

After reading an article on the dangers of drinking and alcohol, I've decided to stop reading.

Important news from around the world:
  • German unemployment falls (Bloomberg)
  • News veteran details massive censorship/propaganda in media (Zero Hedge)
  • Mystery buyer of last weeks huge crude cargoes revealed (Zero Hedge)
  • BG Group to delay liquid natural gas terminal on Canada's Pacific coast (Reuters)
  • A win for the environment! U.S. banks vow not to fund Great Barrier Reef coal export facility (The Guardian)
  • Commodities:
    • Soy set for biggest monthly gain since 2008 (Bloomberg)
    • Trading in nonferrous halted in possible privatization plan in China (South China Morning Post)
    • Hungry chickens spark biggest feed price rally since 1974 (Bloomberg)
    • Metals investors exiting in global slowdown (Bloomberg)
    • Exports of steel boosted to countries qualifying for tax exemptions in China (South China Morning Post)
    • Gold slides as dollar strengthens after Fed (Bloomberg)
    • Gold imports to India plunge after four fold jump in September (Bloomberg)
  • L.A. Autoshow: The 2015 Audi R8 Competition (Hi Consumption)