Thursday, May 21, 2015

Commodities Report: Daily Charts (DBA, DBC, JO, UNG, USO, GLD, BAL)

The markets have felt a little deflated and flat this week which is hardly surprising given the Fed's 'minutes' published on Wednesday and long weekend coming up for U.S. markets. Meantime I have done very well shorting crude oil and natural gas.  In the coming two weeks I still expect to be bearish on energy.

Agriculture: DBA
  • Listed as a speculative long/buy.
  • My position hasn't changed and DBA continues to hover just above $22.00. The furthest channel resistance line is fast approaching and momentum continues to develop positively.

Coffee: JO
  • Coffee is listed as a short/sell.
  • My call several weeks ago, the red arrow at the beginning of May, was early but today we finally had a close below $22.50.  

Commodities: DBC
  • DBC is listed as a speculative long/buy.
  • Whatever is bad for the American dollar is good for commodities, apparently.
  • The counter trend decline that I called at the beginning of May I think has run it's course. It seems poised to return to $18.30 but I need to see a convincing break above to believe this ascent is real. I've drawn in what I think this channel looks like.

Cotton: BAL
  • Cotton is listed as a short/sell.
  • BAL is not looking great at the moment. We already have two hits on the lower channel support line.
  • My longer-term KST and PMO indicators have been bearishly crossed over for some time so my feeling is this is going to break down with a $42.30 target.

Crude Oil: USO
  • Crude Oil is still a short/sell.
  • I did very well by shorting crude oil and exiting after it's 4% collapse two days ago (using DWTI). I have re-bought some shorts as a retracement was expected.
  • Today's 3.33% ascent has me a little worried but I'm not seeing any bullish crossovers yet and Saudi Aramco announced that crude oil production last month was the greatest in the last ten years.

Gold: GLD
  • GLD is listed as a speculative short/sell.
  • Target is the support line at about $114.80. I really thought that an ascent to $120.00 was possible but we are approaching a very worrisome pivot point for the long term price of gold if it does in fact decline to that level.

Natural Gas: UNG
  • Natural gas is a speculative short/sell.
  • This is strictly a counter-trend play because I think natural gas will resume it's climb afterwards. UNG should be a buy when natural gas returns to about $2.75 BTU.
  • Meantime over the next week a gradual descent to the furthest channel line between $14.20 to $14.30 is expected.

Jakob Richardson © 2015