Saturday, February 28, 2015

Still a slippery slope for oil (USO)? Probably...

I and many other commentators agree (Clive Maund) that the rally we've had in oil is likely just a brief bear rally whereupon crude's catastrophic decline will continue. At the very least we are likely to witness a fall back to $16.50 on USO according to the daily charts.


Where do we go from there once $16.50 is reached? A case could be made for a bounce (medium term projection) or a further collapse (long term projection). Looking at USO's monthly chart you perhaps can get a sense of why I feel this way. Everything so far has occurred in a nice downward slopping channel with it's current lows being only the second hit on the lower resistance line. We need a third in order for a break downwards to happen. What's more, USO on the monthly chart is well outside the Keltner channel so any move downwards will first require a normalization of price which may include a further rally. We could see an appreciation back to $22.00 (and perhaps beyond) before the decline resumes. 


Another good reason for my pessimism is what happens when you stop looking at USO the ETF and start looking at Brent Crude the index. Brent crude fell to about $35.00 at the end of 2008 and I don't see any conceptual reason why it can't do so again. The new resistance for crude is about $75.00 once this relief rally is finished.


Jakob Richardson © 2015

Friday, February 27, 2015

Commodities Report: Daily Charts

Agricultural's (DBA, WEAT, CORN and COW) are looking surprisingly strong and on the daily charts I've issued a 'buy' signal as a result. I continue to maintain my medium term forecast of weakness in the precious metals (GLD, SLV, PALL and PPLT) which will probably make the near term strength a little confusing. On the GLD chart I have tried to show where a "head and shoulders" pattern is emerging. Some commentators think it could return to $950. Additionally the bear rally in crude oil (USO) is coming to end. A renewed decline should be expected with the bottom in 2009 of $20 a barrel a distinct possibility. The corollary of this is that natural gas (UNG) will follow crude oil. Glancing at the monthly charts for UNG I noticed that the KST indicator just crossed downwards! Globally natural gas is being diversified as much as possible due to excess in places like Australia and U.S.

Agriculture: DBA
  • DBA still listed as a buy/long.

Aluminum: JJU
  • JJU is still listed as a short/sell

Coal: KOL
  • Daily chart shows KOL as a speculative buy
  • EMA's have made a bullish crossover.

Coffee: JO
  • JO has been switched to a short/sell on the daily charts.

Commodities: DBC
  • DBC is listed as a speculative long/buy.
  • Very close to the final resistance channel line.

Copper: JJC
  • JJC listed as neutral on the daily charts.

Corn: CORN
  • CORN has been switched to a long/buy.


Cotton: BAL
  • Listed as a speculative short
  • After the breakout I speculated a retracement towards the support line which sort-of-happened, except now BAL finds itself outside the Keltner channels again. An over-bought sign.


Crude Oil: USO
  • A sell/short signal is now issued.

Gold: GLD 
  • Gold is now a speculative buy on the daily charts.
  • Is a head-and-shoulders pattern emerging?

Lithium: LIT
  • Lithium is still listed as a speculative short on the daily charts.

Livestock: COW
  • COW is listed as a speculative buy on the daily charts and still quite precariously positioned near the last resistance level.
  • Some really nice divergences are still being seen on the MACD supporting an upward movement.

Natural Gas: UNG
  • Natural gas is listed as a short/sell.

Palladium: PALL
  • Palladium is listed as a neutral.
  • Support at about $78.50 and resistance at $82.00.

Platinum: PPLT
  • Platinum is still listed as a speculative buy at the moment.

Silver: SLV
  • Silver is a speculative buy.

Soy Bean: SOYB
  • Soy has been changed to a neutral.
  • We are approaching upper resistance at around $20.70.

Steel: SLX 
  • Steel is still listed as speculative short.
  • The daily charts are looking really good. EMA's have crossed over and upper resistance is estimated at around $40.25.

Sugar: SGG
  • Sugar is being switched to a short/sell on the daily charts.

Timber: CUT 
  • CUT is listed as a long term buy
  • All the indicators are still over-stretched so my downward arrow is simply indicating the possibility of some retracement.

Uranium: URA
  • Uranium is a strong short/sell.

Wheat: WEAT
  • Wheat is a speculative buy on the daily chart. 
  • Let's see if support at $10.65 holds, otherwise this was a channel widening exercise and a further fall will occur (I've tried to show what this larger downward channel might look like).

Jakob Richardson © 2015

Wednesday, February 25, 2015

Commodities Report: Daily Charts

Agriculture (DBA) is not looking good. Not only has it almost contacted the furthest channel support line but a breakdown from it's long-term downtrend seems imminent. Whenever this happens this usually the end of it's 'death throws.' Additionally, I am stills sensing weakness in precious metals (GLD, SLV, PALL, PPLT). The latest COT reports have really changed my opinion on the matter and looking at gold's long term chart (going back 20 years, that is) we might be witnessing the development of an A-B-C decline.


Agriculture: DBA
  • DBA still listed as a short/sell.

Aluminum: JJU
  • JJU is still listed as a short/sell
  • MFI index has recently shown an overbought status which is ironic since JJU is already in a massive declining channel. 

Coal: KOL
  • Daily chart shows KOL as a speculative buy
  • EMA's have made a bullish crossover.

Coffee: JO
  • JO has been switched to a short/sell on the daily charts.

Commodities: DBC
  • DBC is listed as a speculative short.
  • We've had a good run so far but I now expect a bit of a retracement while we see whether a bottom is actually being put in.
  • The recent upward move was supported by the MACD and KST indicators. Let's monitor how solid this floor is at $17.00.

Copper: JJC
  • JJC listed as speculative short on the daily charts.

Corn: CORN
  • CORN has been switched to a sell/short.
  • All the EMA's have crossed downwards.

Cotton: BAL
  • Listed as a speculative buy
  • After the breakout I speculated a retracement towards the support line which sort-of-happened, except now BAL finds itself outside the Keltner channels again. An over-bought sign.

Crude Oil: USO
  • A neutral signal is now issued.

Gold: GLD 
  • Gold is now a speculative buy on the daily charts.
  • Is a head-and-shoulders pattern emerging?

Lithium: LIT
  • Lithium is still listed as a buy on the daily charts. EMA(4), (9) and (13) have all crossed the EMA(34).
  • Resistance at around $12.00.

Livestock: COW
  • COW is listed as a speculative buy on the daily charts and still quite precariously positioned on the last resistance level.
  • Some really nice divergences are being seen on the MACD supporting an upward movement.

Natural Gas: UNG
  • Natural gas is listed as a speculative short.
  • Resistance placed at $15.00 and $16.50.

Palladium: PALL
  • Palladium is listed as a speculative short
  • Support at $73.00 and resistance at about $78.50.

Platinum: PPLT
  • Platinum is still listed as a neutral
  • Five days ago a break below $114.00 happened which doesn't signal positive or uplifting tidings!

Silver: SLV
  • Silver is a neutral
  • I want to see a convincing bounce off of $15.20.

Soy Bean: SOYB
  • Soy has been changed to a neutral.
  • We are approaching upper resistance at around $20.70.

Steel: SLX 
  • Steel is still listed as speculative buy.
  • The daily charts are looking really good. EMA's have crossed over and upper resistance is estimated at around $40.25.

Sugar: SGG
  • Sugar is being switched to a short/sell on the daily charts.
  • A lower high has just been put in which is not a positive development. 
  • $36.00 didn't end up holding and the downward trend is continuing.

Timber: CUT 
  • CUT is listed as a long term buy
  • All the indicators are a little over-stretched so my downward arrow is simply indicating the possibility of some retracement.

Uranium: URA
  • Uranium is a strong short/sell.

Wheat: WEAT
  • Wheat is a short/sell on the daily chart. 
  • Let's see if support at $10.65 holds, otherwise this was a channel widening exercise and a further fall will occur (I've tried to show what this larger downward channel might look like).



Jakob Richardson © 2015

Friday, February 20, 2015

Commodities Report: Daily Charts

I've misread precious metals. Some have broken critical support lines when I figured the recent strength would mean a bounce up. I continue to advise a short on palladium, but platinum, silver and gold are not looking too hot at the moment.

Agriculture: DBA
  • DBA still listed as a speculative buy.
  • A bounce is likely to be observed which is why I think this speculative, but still holding above $22.90 which is good. Let's wait to see what happens when it breaks the red channel which is still some time off.

Aluminum: JJU
  • JJU is still listed as a short
  • We've had a small bounce off of $17.00 but have very tight stops set up, please.  

Coal: KOL
  • Daily chart is poised to breakout so at least on the daily time-frame I'd treat it as a speculative buy. EMA's are also looking to crossover which is a bullish setup.

Coffee: JO
  • JO has been switched to a speculative short on the daily charts.
  • We had a break below $29.00 earlier in the week which means the next stop is the lower resistance line of the larger red declining channel.

Commodities: DBC
  • DBC is listed as a speculative short.
  • We've had a good run so far but I now expect a bit of a retracement while we see whether a bottom is actually being put in.
  • The recent upward move is supported by the MACD and KST indicators. Let's monitor how solid this floor is at $17.00.

Copper: JJC
  • JJC listed as speculative short on the daily charts.

Corn: CORN
  • CORN has been switched to a sell/short.
  • All the EMA's are poised to cross downwards.

Cotton: BAL
  • Listed as a speculative short
  • Cotton was listed as a neutral while it approached the red resistance line which it has since blasted through. Excellent long term signal.
  • I expect a retracement while it stays above the red support line.

Crude Oil: USO
  • A speculative short signal is now issued.

Gold: GLD 
  • Gold is now a speculative short on the daily charts. The 'pause' that I have called for in GLD is still happening. The EMA(34) is trailing quite far behind it's current price and I would like to see it catch up before moving on. It is now above the MA(144) which is a huge development. 
  • According to my weekly charts we are closing in on my projected support of $116.00. This is going to be a phenomenal buy area.

Lithium: LIT
  • Lithium is still listed as a buy on the daily charts. EMA(4), (9) and (13) are all about to cross the EMA(34).
  • Resistance at around $12.00.

Livestock: COW
  • COW is  listed as a speculative buy on the daily charts and still quite precariously positioned on the last resistance level.

Natural Gas: UNG
  • Natural gas is listed as a buy.
  • Resistance placed at $17.00.

Palladium: PALL
  • Palladium is listed as a speculative short
  • All EMA's are bearishly aligned and I am not seeing a lot of encouraging movement at the moment. Support at $73.00.

Platinum: PPLT
  • Platinum is still listed as a neutral
  • Three days ago a break below $114.00 happened which doesn't signal upward movement! We may have witnessed a false breakout.

Silver: SLV
  • Silver is a neutral
  • I want to see a convincing bounce off of $15.20.

Soy Bean: SOYB
  • Soy has been changed to a neutral.

Steel: SLX 
  • Steel is still listed as speculative buy.
  • The daily charts are looking really good. EMA's have crossed over and upper resistance is estimated at around $40.25.

Sugar: SGG
  • Sugar is being switched to a neutral on the daily charts.
  • A lower high has just been put in which is not a positive development. 
  • I don't expect $36.00 to hold.

Timber: CUT 
  • Cut is listed as a long term buy
  • All the indicators are a little over-stretched so my downward arrow is simply indicating a possibility of some retracement.

Uranium: URA
  • Uranium is a speculative buy to about $11.40.

Wheat: WEAT
  • Wheat is a neutral on the daily chart. 
  • A bounce off of resistance at $11.65 was expected and occurred within two cents!
  • Let's see if support at $10.65 holds, otherwise this was a channel widening exercise and a further fall will occur (I've tried to show what this larger downward channel might look like.



Jakob Richardson © 2015