Technically Speaking
Darin Newsom DTN Senior Analyst

Sunday 02/07/16

Weekly Analysis: Grain Markets

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.42 1/4, down 6 1/4 cents for the week. Despite the lower weekly close the secondary (intermediate-term) trend still looks to be up. However, the minor (short-term) trend has turned down with initial support near $3.41 1/2. This price marks the 33% retracement level of the previous minor uptrend from $3.27 1/4 through the high of $3.48 1/2. The 50% retracement level is down near $3.38. Daily stochastics are bearish.

Source: DTN ProphetX

Corn (Old-crop futures): The March contract closed 6.25cts lower at $3.65 3/4. The futures contract moved back into a secondary (intermediate-term) sideways trend as the minor (short-term) trend turned down. Initial minor support is pegged near $3.65 1/4, the 33% retracement level of the previous uptrend from $3.48 1/2 through last Tuesday's high of $3.73 3/4. A move below this support would signal an extended minor downtrend to the 67% retracement level of $3.56 3/4.

Corn (New-crop futures): The December 2016 contract closed at $3.89 1/4, down 4 cents for the week. Despite the lower weekly close the contract looks to still be in a secondary (intermediate-term) uptrend. However, like the NCI.X and thee March futures contract, the minor (short-term) trend has turned down with daily stochastics now bearish. Initial support is near $3.88 1/4, then $3.84 3/4, and finally $3.81, $3.81 1/4.

Soybeans (Cash): The DTN National Soybean Index (NSI.X, national average cash price) closed at $8.19 1/2, down 16 cents for the week. The secondary (intermediate-term) trend has turned sideways again between resistance near $8.48 and support at the major (long-term) low of $8.08 1/2. Weekly stochastics are neutral-to-bearish above the oversold level of 20%.

Soybeans (Old-crop futures): The March contract closed 14.75cts lower at $8.67 1/2. While the secondary (intermediate-term) trend remains sideways, last week's bearish close could lead to renewed selling. Initial support is at the recent of $8.52, then the contract low of $8.47. Weekly stochastics are neutral-to-bearish above the oversold level of 20%.

Soybeans (New-crop futures): The November 2016 contract closed 9.755cts lower at $8.83 3/4. Despite the lower close it could still be argued, technically, that the secondary (intermediate-term) trend is up. However, bearish weekly stochastics could lead to another test of support near $8.75 1/2. The contract low is down at $8.50.

SRW Wheat (Cash): The DTN SRW Wheat National Index (SR.X, national average cash price) closed at $4.25, down 12 1/4 cents for the week. The SR.X posted a bearish outside week last week, indicating potential selling to continue. If so, initial support could be found at the recent low of $4.18 3/4, then the major low of $4.10 3/4.

SRW Wheat (New-crop futures): The July 2016 Chicago contract closed 14 3/4cts lower at $4.75 3/4. The secondary (intermediate-term) trend looks to have turned sideways following last week's sell-off. Resistance is at the 4-week high of $4.99 while support is at the contract low of $4.69 1/4.

HRW Wheat (Cash): The DTN HRW Wheat National Index (HW.X, national average cash price) closed at $3.97, down 17 1/4 cents for the week. The secondary (intermediate-term) trend turned sideways again with last week's close a test of major (long-term) support at the low near $3.95 1/4. Resistance is at the 4-week high of $4.21 3/4.

HRW Wheat (New-crop futures): The July 2016 Kansas City contract closed 19.25cts lower at $4.73 last week. The secondary (intermediate-term) trend turned down again as the July KC wheat posted a new contract low of $4.71 1/4. Weekly stochastics turned bearish, falling back below the oversold level of 20%.

HRS Wheat (Cash): The DTN HRS Wheat National Index (SW.X, national average cash price) closed at $4.66, down 11 cents for the week. The secondary (intermediate-term) trend is down. Initial support is at the previous low of $4.56, then the major (long-term) low of $4.44.

HRS Wheat (New-crop futures): The September 2016 Minneapolis contract closed 7.50cts lower at $5.14 1/4. The secondary (intermediate-term) trend turned down as Sep Minneapolis wheat posted (and closed at) a new contract low of $5.14 1/4. However, weekly stochastics continue to show the contract is sharply oversold and vulnerable to renewed buying interest.

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Posted at 12:37PM CST 02/07/16 by Darin Newsom
 
Weekly Analysis: Livestock Markets

Live Cattle: The April contract closed $0.40 higher at $134.40. The secondary (intermediate-term) trend remains up with initial resistance pegged at the recent high of $138.95. Retracement resistance is at $139.025, the 50% level of the previous downtrend from $165.00 through the low of $123.05. The minor (short-term) looks to have turned down after last Friday's sell-off established a bearish crossover by daily stochastics. Minor support is between $133.525 and $131.95, the 33% and 50% retracement levels of the previous minor uptrend from $127.15 through last Thursday's high of $136.725.

Source: DTN ProphetX

Feeder Cattle: March contract closed $3.425 lower at $15.825. March feeder cattle remain in a wide ranging secondary (intermediate-term) sideways trend between the recent high of $166.875 and the 4-week low of $147.775. Weekly stochastics turned neutral last week with a bearish crossover above the oversold level of 20%. This would indicate possible bearish momentum the next couple of weeks leading to a test of secondary support.

Lean hogs: The more active April contract closed $0.40 lower at $70.30 last week. Despite the lower close the secondary (intermediate-term) trend remains up, supported by continued noncommercial buying. Last Friday's weekly CFTC Commitments of Traders report showed this group adding 6,672 contracts, pushing their net-long position to 11,294*. Feb hogs are testing resistance between $69.55 and $71.05, prices that mark the 67% and 76.4% retracement levels of the previous downtrend, as weekly stochastics approach the overbought level of 80%.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.42 1/4, down 6 1/4 cents for the week. Despite the lower weekly close the secondary (intermediate-term) trend still looks to be up. However, the minor (short-term) trend has turned down with initial support near $3.41 1/2. This price marks the 33% retracement level of the previous minor uptrend from $3.27 1/4 through the high of $3.48 1/2. The 50% retracement level is down near $3.38. Daily stochastics are bearish.

Soybean meal: The March contract closed $7.40 lower at $265.00. The secondary (intermediate-term) trend remains sideways between the major (long-term) low of $263.80 and the 4-week high of $277.20. However, continued commercial selling had the contract near major support at last week's close threatening a move to a new low. If realized this could lead to an extended major sell-off to near $250.00 despite monthly stochastics indicating an already sharply oversold situation.

*The weekly Commitments of Traders report showed positions held as of Tuesday, February 2.

To track my thoughts on the markets throughout the day, follow me on Twitter: www.twitter.com\DarinNewsom

Posted at 12:02PM CST 02/07/16 by Darin Newsom
 
Weekly Analysis: Energy Markets

Brent Crude Oil: The spot-month contract closed $0.68 lower at $34.06. Despite the lower close the secondary (intermediate-term) trend remains up. Initial resistance is pegged at $37.14, a price that marks the 23.6% retracement level of the previous downtrend from the high of $69.63 through the low of $27.10. Weekly stochastics remain bullish following a crossover below the oversold level of 20% the week of January 17.

Source: DTN ProphetX

Crude Oil: The spot-month contract closed $2.73 lower at $30.89. Despite the lower close the secondary (intermediate-term) trend remains up. Initial resistance is pegged at $34.78, a price that marks the 23.6% retracement level of the previous downtrend from the high of $62.58 through the low of $26.19. Weekly stochastics remain bullish following a crossover below the oversold level of 20% the week of January 17.

Distillates: The spot-month contract closed 0.39ct higher at $1.0590. The secondary (intermediate-term) trend remains up following a bullish crossover by weekly stochastics below the oversold level of 20% the week of January 17. The initial upside target is $1.4185, a price that marks the 23.6% retracement level of the previous downtrend from $3.2633 through the recent low of $0.8487.

Gasoline: The spot-month contract closed 11.04cts lower at $0.9927. A move to a new major (long-term) low of $0.9670 erased the previous week's bullish secondary (intermediate-term) signals. While the market still looks to be nearing the end of its secondary 3-Wave downtrend, it needs to reestablish a bullish pattern.

Ethanol: The spot-month contract closed 1.0ct higher at $1.436. The secondary (intermediate-term) trend remains up. However, daily stochastics are showing the minor (short-term) uptrend in an overbought situation as the spot-month contract moves toward resistance at $1.458. This could spark a round of short-term selling.

Natural Gas: The spot-month contract closed 23.5cts lower at $2.063. Despite the lower close the secondary (intermediate-term) trend remains up with initial resistance at the recent high of $2.495. The minor (short-term) downtrend looks to have bottomed out after testing support at $1.954 last week. This price marks the 67% retracement level of the previous minor uptrend from $1.684 through the $2.495 high.

Propane (Conway cash price): Conway propane closed 1.12cts higher at $0.3350. The secondary (intermediate-term) trend remains up with the market testing resistance $0.3249 and $0.3612. These prices mark the 33% and 50% retracement levels of the previous sell-off from $0.4700 through the low of $0.2525. Weekly stochastics remain bullish meaning the market could test the 67% retracement level up at $0.3976.

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Posted at 11:22AM CST 02/07/16 by Darin Newsom
 

Wednesday 02/03/16

Another Round of Bearish Signals for USDX

Stop me if you've heard this one before: Based on my analysis of its weekly chart the U.S. dollar index (USDX) looks to be in a secondary (intermediate-term) downtrend. I'll wait a moment for the laughter to die down.

Source: DTN ProphetX

Yes, I know the January jobs data (nonfarm payrolls, unemployment rate) is scheduled for release this coming Friday (February 5), and this could very well light a fire underneath the U.S. dollar. And yes I'm well aware of the normality of foreign central banks moving to negative interest rates, weakening domestic currencies and driving global investment buyers to the greenback.

But the USDX weekly chart is what it is; and what it is is bearish (a tip of the cap to Andy Griffith's famous "What it Was Was Football" bit ahead of this weekend's big game).

Let's take this apart piece by piece. First, go back to the left-cent of the top chart and note the high of 100.390 the week of March 9, 2015. If you drop down to the weekly stochastics (momentum study, bottom chart) you'll see that the sell-off the following week established a bearish crossover (faster moving blue line crossed below the slower moving red line) above the overbought level of 80%. This was the initial signal that the secondary trend was in a period of change.

From there the USDX tested support between 93.316 and 92.257, the 33% and 38.2% retracement levels of the previous uptrend from 78.906 through the 100.390 high. However, an autumn rally saw the USDX post a new high of 100.510 the week of November 30.

Take a close look at the action that week (Nov 30) though. Notice that the USDX posted its new high, then fell well below the previous week's low of 99.312 before closing lower for the week. This is a clear bearish reversal that coincided with a confirming bearish crossover by weekly stochastics below the levels of the first the previous March. From a technical point of view this is as clear a case of a market moving into a downtrend as there could be.

But the USDX isn't an ordinary market, at least not these days. Rather than collapsing it immediately went into a consolidation phase marked by gradually higher lows (top chart, blue line). Until this week, that is. Thee USDX has not only fallen below consolidation trendline support, but is challenging the 4-week low 98.049 (dashed red line) as well. Moving to new 4-week lows (or highs) is another important indicator that the trend, and momentum, of a market has changed. In this case it would be down.

How far the USDX might fall is a matter of simple math. Find the bearish breakout point from the week of its bearish reversal (in this case the previous week's low of 99.312) and find the range to the low before consolidation began (97.190). This gives a range of 2.122 that is then subtracted from the bearish breakout point of the consolidation phase (98.759). This time around that formula puts the downside target at approximately 96.637, still above initial technical support at the 23.6% retracement level of 95.411.

Now let's consider the major (long-term) trend also looks to be down based on trade patterns and monthly stochastics. If the USDX extends its secondary downtrend beyond the targeted 96.637 level and moves beyond support near 93.316, then the major downtrend could ultimately test support near 85.600. This level marks a 50% retracement of the previous major uptrend from 70.698 (March 2008 low) through the December 2015 high of 100.510.

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Posted at 8:44AM CST 02/03/16 by Darin Newsom
Comments (1)
The pries on my DTN charts do not match the ones you are using. My Mar.9,2015 weekly high is 100.785 not 100.39 and the Nov.30, 2015 high is lower than the March at 100.60 not a new high like you have, which is still lower than my March high of 100.785. The same goes for the low of the breakout low of 99.312, my low is 99.365. The same goes for the Mar. 2008 low, you 78.906 mine 71.205 with my April low being 71.05. How come do none of these numbers match ?
Posted by Grant Maddess at 2:57PM CST 02/05/16
 

Monday 02/01/16

Monthly Analysis: Grain Markets

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.48 1/2, up 14 3/4 cents for the month. Technically the NCI.X remains in a 5-Wave uptrend (Elliott) dating back to the Wave C low near $2.81 1/2 back in October 2014. However, much of the time since has seen cash corn move sideways between support at roughly $3.23 and resistance at the December 2014 high of $2.80. Initial resistance is at the August 2015 peak of $3.64 1/2. Monthly stochastics are neutral with the last major signal a bullish crossover below the oversold level of 20% in conjunction with the October 2014 low. The weekly chart shows the secondary (intermediate-term) trend has turned up with the NCI.X posting a new 4-week high last Friday. Initial resistance on the weekly chart is between $3.49 1/2 and $3.59 1/2.

Source: DTN ProphetX

Corn (Futures): The March contract closed at $3.72, up 13 1/4 cents on the monthly chart. Similar to the cash market, corn futures remain in a major (long-term) 5-Wave uptrend (Elliott) on the monthly chart. However, as seen in the NCI.X, nearby futures have had difficulty breaking out of a sideways pattern with support near $3.50 1/4 and initial resistance at the October 2015 high of $3.99 3/4. Monthly stochastics are neutral, with the last major signal a bullish crossover below the oversold level of 20% in conjunction with the October 2014 low. Noncommercial traders continue to hold a net-short futures position, with possible short-covering in February providing support.

Soybeans (Cash): The DTN National Soybean Index (NSI.X, national average cash price) closed at $8.35 1/2, up 16 3/4 cents for the month. The major (long-term) trend is sideways with support at the previous low of $8.0857 (September 2015). However, the rally late in the month led to a bullish crossover by monthly stochastics below the oversold level of 20%, signaling increasingly bullish momentum. However, the close near the monthly high of $8.38 1/4 opens the door for a potential breakaway bullish gap if the market continues its rally into February.

Soybeans (Futures): The March contract closed at $8.82 1/4, up 18.00 cents on the monthly chart. The major (long-term) trend remains sideways with support at the low of $8.44 1/4 (November 2015). However, monthly stochastics established a bullish crossover below the oversold level of 20%, setting the stage for increased upside momentum. This could come from continued noncommercial short-covering, with this group continuing to hold a net-short futures position of 40,504 contracts late in January.

Wheat (Cash): The DTN National SRW Wheat Index (SR.X, national average cash price) closed at $4.37 1/4, up 12 cents for the month. The major (long-term) trend remains sideways, though the SR.X was able to close near its monthly high of $4.43. The sideways range is bounded by the September 2015 low of $4.19 3/4 and the November 2015 high of $4.77 1/2. Monthly stochastics are nearing a bullish crossover below the oversold level of 20%.

SRW Wheat (Futures): The March Chicago contract closed at $4.79 1/4, up 9.25 cents on the monthly chart. After posting a new low of $4.56 during January the March contract was able to rally late in the month. This sets the stage for January's move to later be viewed as a bullish spike reversal, though no bullish crossover was seen by monthly stochastics. The latter is close, and could be seen if buying interest continues in February. The most likely support could come from noncommercial short-covering with this group holding a net-short futures position of 55,743 contracts in late January.

To track my thoughts on the markets throughout the day, follow me on Twitter: www.twitter.com\DarinNewsom

Posted at 4:17AM CST 02/01/16 by Darin Newsom
 
Monthly Analysis: Livestock Markets

Live Cattle: The April contract closed at $134.00, down $2.80 on the monthly chart. The market remains a mix of technical signals. However, its major (long-term) trend may best be described as sideways in the wide range between resistance near $138.90 and support near $126.50. Monthly stochastics still have not established a bullish crossover below the oversold level of 20%, possibly indicating another round of pressure could be seen.

Source: DTN ProphetX

Feeder Cattle: The March contract closed at $157.25, down $6.40 on the monthly chart. The market continues to indicate it has moved into a 5-Wave uptrend (Elliott), though Wave 1 may have already run into resistance near $165.15. This price marks the 23.6% retracement level of the previous downtrend from $245.75 through the December low of $143.20. The January high was $166.875 before the market fell back.

Lean Hogs: The April contract closed at $70.70, up $10.90 on the monthly chart. The major (long-term) trend remains up as the market remains in Wave 1 of a newly established 5-Wave (Elliott) move. However, the April contract is already testing resistance near $71.05, the 23.6% retracement level of the previous downtrend from $133.425 through the November 2015 low of $51.80. Characteristically, Wave 1 is usually the shortest of the five waves. Monthly stochastics remain bullish above the oversold level of 20%.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.48 1/2, up 14 3/4 cents for the month. Technically the NCI.X remains in a 5-Wave uptrend (Elliott) dating back to the Wave C low near $2.81 1/2 back in October 2014. However, much of the time since has seen cash corn move sideways between support at roughly $3.23 and resistance at the December 2014 high of $2.80. Initial resistance is at the August 2015 peak of $3.64 1/2. Monthly stochastics are neutral with the last major signal a bullish crossover below the oversold level of 20% in conjunction with the October 2014 low. The weekly chart shows the secondary (intermediate-term) trend has turned up with the NCI.X posting a new 4-week high last Friday. Initial resistance on the weekly chart is between $3.49 1/2 and $3.59 1/2.

Soybean meal: The March contract closed at $272.40, up $6.90 on the continuous monthly chart. The market posted a new long-term low of $263.80, its lowest price since July 2010, in January before rallying late in the month. Despite the rally, no bullish technical signal was established leaving the major (long-term) trend down for now. However, monthly stochastics are nearing a bullish crossover below the oversold level of 20%.

To track my thoughts on the markets throughout the day, follow me on Twitter: www.twitter.com\DarinNewsom

Posted at 4:13AM CST 02/01/16 by Darin Newsom
 
Monthly Analysis: Energy Markets

Brent Crude Oil: The spot-month contract closed at $35.99, down $1.29 on the monthly chart. After posting a new low of $27.10 in January, the lowest price since November 2003, the spot-month contract posted a strong rally to close out the month. This move led to the establishment of a bullish crossover by monthly stochastics below the oversold level of 20% and possibly a bullish spike reversal on the continuous monthly chart. If so, then the major (long-term) trend would be considered up with an initial price target of $51.01. This price marks the 23.6% retracement level of the previous downtrend from $128.40 through the January low. Keep in mind that spike reversals are one of the least reliable technical signals studied.

Source: DTN ProphetX

Crude Oil: The spot-month contract closed at $33.62, down $3.42 on the monthly chart. After posting a new low of $26.19 in January, the lowest price since May 2003, the spot-month contract posted a strong rally to close out the month. This move led to the establishment of a bullish crossover by monthly stochastics below the oversold level of 20% and possibly a bullish spike reversal on the continuous monthly chart. If so, then the major (long-term) trend would be considered up with an initial price target of $47.11. This price marks the 23.6% retracement level of the previous downtrend from $114.83 through the January low. Keep in mind that spike reversals are one of the least reliable technical signals studied, and that the spot futures spread continues to trend down indicating an increasing bearish fundamental situation.

Distillates: The spot-month contract closed at $1.0787, down 2.20cts on the monthly chart. As with the crude oil markets, the spot-month distillates contract moved to a new low of $0.8487 in January before rallying. This established a bullish crossover by monthly stochastics below the oversold level of 20% as well as a potential bullish spike reversal. If the major (long-term) trend has turned up, then the initial upside target is $1.4437. This price marks the 23.6% retracement level of the previous downtrend from $3.37 through the January low.

Gasoline: The spot-month contract closed at $1.1323, down 13.49cts on the monthly chart. Like the oil markets (crude, distillates) the spot-month RBOB contract posted a new low of $0.9924 during January. However, unlike the above mentioned markets gasoline die not see the clear establishment of a bullish spike reversal or a bullish crossover by monthly stochastics. This would suggest that the major (long-term) trend remains down, or at least should move sideways above the January low. However the weekly chart did turn more bullish, and the market's 5-year and 10-year seasonal indexes show a tendency for the spot-month to post a strong rally, 20% and 23% respectively, through the last weekly close in April.

Ethanol: The spot-month contract closed at $1.426, up 0.26cts on the monthly chart. The major (long-term) trend remains sideways with the spot-month contract posting January low of $1.296. This establishes a major (long-term) double-bottom pattern with the low of $1.292 (December 2014), setting the stage for an uptrend if the contract can move above the interim high of $1.709 (May 2015). This would then project a possible test of retracement resistance at $2.181, the 50% level of the previous downtrend from $3.07 through the $1.292 low.

Natural Gas: The spot-month contract closed at $2.298, down 3.9cts on the monthly chart. The major (long-term) trend remains up with the bullish spike reversal and bullish crossover by monthly stochastics still in effect. Initial resistance remains at $2.636, the 23.6% retracement level of the previous downtrend from $5.72 through the December 2015 low of $1.684. Beyond that, the 33% retracement level is pegged at $3.028.

Propane (Conway cash price): Conway propane closed at $0.3238, down 1.00ct on its monthly chart. Like much of the rest of the energy complex cash propane looks to have established a bullish spike reversal during January. After posting a new low of $0.2525 the market was able to rally through the end of the month. This led to a bullish crossover below the oversold level of 20% by monthly stochastics, also indicating the major (long-term) trend has turned up.

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Posted at 4:11AM CST 02/01/16 by Darin Newsom
 

Sunday 01/31/16

New-Crop Febraury Rallies

If you live in the U.S. Plains or Midwest, most likely you are going to see a blizzard this week. Forecasts are calling for north winds of 50 mph or so, and snow totals ranging from 4 inches to as much as 2 feet. Unless you have livestock to tend, you'll probably spend Groundhog Day (Tuesday, February 2) burrowed in your den, afraid to poke your head out and see 6 more weeks of winter.

All the possible time in the house will give U.S. grain producers time to ponder what has become a February anomaly. A quick look at 5-year and 10-year seasonal indexes (based on weekly closes) for new-crop December corn and November soybean futures shows us nothing spectacular over the month of February. But if we zoom the telescope in a bit tighter and focus on daily closes for both contracts during the month, something UDSA's Risk Management Agency (RMA) does to establish initial crop insurance prices, we something dramatically different.

Before discussing the results, remember that the lasts three harvests for both corn and soybeans have been the largest on record for both. Therefore the 2013 production figures of 13.829 bb (corn) and 3.358 bb (soybeans) would have carryover influence on the 2014 new-crop contract prices, 2014 production of 14.216 bb and 3.927 bb affecting 2015 contracts, and 2015 production of 13.601 bb and 3.930 bb influencing 2016 futures contracts. Though it is a small sample size, we have the two years of data to project what could be seen in 2016 new-crop futures during February.

Logically, one would think that record production numbers the previous year would weigh on the next year's new-crop futures contracts. But, as has been proven time and time again, logic doesn't have much to do with futures markets.

For example, using the change between the last daily close of January and the last daily close of February for both 2014 and 2015, December corn has gained approximately 4%. Soybeans have been a bit more impressive averaging a gain of 5% during February. And since RMA uses the average daily close for the month, monthly averages have been 3% above January's last daily close for both corn and soybeans. In 2016 the Dec corn futures contract closed January at $3.93 1/4 while Nov soybeans were priced at $8.93.

Let's look at what the last two years might mean for corn first. Based on its $3.93 1/4 close, the Dec 2016 futures contract would be projected to see a high daily close in February of approximately $4.09, and an average daily close for the month of $4.05. From a technical point of view, Dec corn has a possible target near $4.10 on its daily chart. This price marks the 50% retracement level of the downtrend from $4.46 3/4 through the recent low of $3.74 1/2. This would seem to line up with the high projected by the last two year's activity, except for....

According to December corn's daily stochastics (short-term momentum study) the contract is already in an overbought situation. This technical indicator would seem to hint at renewed selling to hit the market over the coming weeks. On the other hand, the contract's weekly chart is more bullish after posting a new 4-week high last Friday. Recall that in the grand scheme of technical analysis, weekly patterns can override daily and monthly trump weekly.

As for November soybeans, its final January close of $8.93 would project to a February high daily close of $9.38 and an average daily close of $9.20. The contract's daily chart shows a possible target all the way up at $9.40, the 67% retracement level of the previous downtrend from $9.85 through the low of $8.50. As with corn though, daily stochastics are already near the overbought level of 80% suggesting the recent run of buying interest could soon come to an end. But also like Dec corn, the weekly chart for Nov beans grew more bullish last week as it too posted a new 4-week high of $8.96 1/4.

As we move into February, the weather is expected to remind us with no uncertainty that it is indeed still winter. Settle in, maybe watch the movie "Groundhog Day", and wait to see if new-crop corn and soybeans don't relive the same patterns seen the last couple of years.

P.S. This is one of the few Technically Speaking blogs to not have an attached chart. I wrestled with it for a while, but finding a way to show all the data in a readable form was beyond my comprehension on a beautiful Sunday afternoon that looks to be the calm before the storm.

To track my thoughts on the markets throughout the day, follow me on Twitter:www.twitter.com\Darin Newsom

Posted at 3:44PM CST 01/31/16 by Darin Newsom
 

Saturday 01/30/16

Weekly Analysis: Grain Markets

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.48 1/2, up 1 3/4 cents for the week. The NCI.X looks to have established a secondary (intermediate-term) trend, holding above its recent bullish breakaway gap and moving to a new 4-week high last Friday. Weekly stochastics are also growing more bullish. Initial resistance is pegged near $3.53 1/2, the 33% retracement level of the previous downtrend from $4.05 3/4 through the recent low of $3.27 1/4.

Source: DTN ProphetX

Corn (Old-crop futures): The March contract closed 1.75cts higher at $3.72. The futures contract posted a new 4-week high last Friday of $3.72 1/2, indicating the secondary (intermediate-term) trend has finally turned up. Seasonally the market tends to rally during February, gaining 4% on both its 5-year and 10-year seasonal indexes. Weekly stochastics are bullish above the oversold level of 20%.

Corn (New-crop futures): The December 2016 contract closed at $3.92, up 1 1/4 cents for the week. Dec corn looks to have established a secondary (intermediate-term) uptrend with a move to a new 4-week high of $3.94 last week. The next upside target is the previous set of highs at $4.03 1/2. Weekly stochastics are growing more bullish above the oversold level of 20%.

Soybeans (Cash): The DTN National Soybean Index (NSI.X, national average cash price) closed at $8.35 1/2, up 4 1/2 cents for the week. Technically the NSI.X looks set to begin a secondary (intermediate-term) uptrend, but needs a move to a new 4-week high to confirm. Last week came close with the high of $8.37 1/2 a mere 1/4 cent below the previous week's high of $8.37 3/4. A failure to move to a new high could lead to a test of the low side of the sideways trend at $8.08 1/2. Weekly stochastics remain bullish above the oversold level of 20%.

Soybeans (Old-crop futures): The March contract closed 5.75cts higher at $8.82 1/4. Both the secondary (intermediate-term) and minor (short-term)) trends remain sideways. However, the contract looks to have regained short-term bullish momentum that could lead to a test of minor resistance at $8.91 3/4 on its daily chart. This price marks the 67% retracement level of the previous downtrend from $9.11 1/2 through the low of $8.52.

Soybeans (New-crop futures): The November 2016 contract closed 9.25cts higher at $8.93. The secondary (intermediate-term) trend looks to have turned up as the contract posted a new 4-week high of $8.96 1/4. With weekly stochastics bullish a test of initial resistance at $9.24 1/4 is possible. This price marks the 23.6% retracement level of the previous downtrend from $11.65 through the contract low of $8.50.

SRW Wheat (Cash): The DTN SRW Wheat National Index (SR.X, national average cash price) closed at $4.37 1/4, up 4 1/2 cents for the week. The secondary (intermediate-term) trend remains up with the SR.X posting a new 4-week high of $4.43. The initial upside price target remains $4.61, the 23.6% retracement level of the previous downtrend from $6.23 through the low of $4.10 3/4.

SRW Wheat (New-crop futures): The July 2016 Chicago contract closed 5 1/4cts higher at $4.90 1/2. The secondary (intermediate-term) trend remains up. Initial resistance is at the previous high of $5.10 1/4.

HRW Wheat (Cash): The DTN HRW Wheat National Index (HW.X, national average cash price) closed at $4.14 1/4, up 2 cents for the week. The secondary (intermediate-term) trend remains up. Initial resistance remains at the 4-week high of $4.21 3/4. Support is at the 4-week low of $3.95 1/4.

HRW Wheat (New-crop futures): The July 2016 Kansas City contract closed 1.50cts higher at $4.92 1/4. The secondary (intermediate-term) trend remains up with initial resistance is at the 4-week high of $5.02. Weekly stochastics are bullish above the oversold level of 20%.

HRS Wheat (Cash): The DTN HRS Wheat National Index (SW.X, national average cash price) closed at $4.77, up 4 cents for the week. The secondary (intermediate-term) trend is sideways with the SW.X holding near support at $4.73. Resistance remains at the previous high of $5.02.

HRS Wheat (New-crop futures): The September 2016 Minneapolis contract closed 2.75cts higher at $5.21 3/4. The secondary (intermediate-term) trend remains sideways with support at the double-bottom contract low of $5.15 1/4. Resistance is at the 4-week high of $5.33 1/4. A bearish breakout would suggest an extended sell-off to $4.97 1/4. A bullish breakout would put the upside target at $5.51 1/4.

To track my thoughts on the markets throughout the day, follow me on Twitter: www.twitter.com\DarinNewsom

Posted at 7:18AM CST 01/30/16 by Darin Newsom
 
Weekly Analysis: Livestock Markets

Live Cattle: The more active April contract closed $0.925 higher at $134.00. The key factor in live cattle remains its high volatility, with the weekly figure for the April futures contract calculated at 21.7% last Friday. Trends on both weekly (intermediate-term) and daily (short-term) charts are difficult to discern, with the major (long-term) trend on the monthly chart still sideways in the wide range between $138.90 and December's low of $121.975. For what it's worth, the contract posted a minor reversal on its daily chart Friday near resistance at $135.025. This could lead to a short-term sell-off.

Source: DTN ProphetX

Feeder Cattle: The more active March contract closed $0.65 lower at $157.25. March feeder cattle remain in a wide ranging secondary (intermediate-term) sideways trend between the 4-week high of $166.875 and the 4-week low of $147.775. Retracement resistance is near $165.30, then $171.10. These prices mark the 33% and 50% levels of the previous downtrend from the high of $212.525 through the contract low of $141.70.

Lean hogs: The more active April contract closed $1.70 higher at $70.70 last week. The secondary (intermediate-term) trend is up as the contract moved above resistance near $69.55. This price marks the 67% retracement level of the previous downtrend from $74.70 through the low of $59.225. Weekly stochastics are nearing the overbought level of 80% increasing the markets vulnerability to renewed selling interest.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.48 1/2, up 1 3/4 cents for the week. The NCI.X looks to have established a secondary (intermediate-term) trend, holding above its recent bullish breakaway gap and moving to a new 4-week high last Friday. Weekly stochastics are also growing more bullish. Initial resistance is pegged near $3.53 1/2, the 33% retracement level of the previous downtrend from $4.05 3/4 through the recent low of $3.27 1/4.

Soybean meal: The March contract closed $3.90 higher at $272.40. While the secondary (intermediate-term) trend remains sideways between resistance at its 4-week high of $277.20 and support at the contract low of $263.8, weekly stochastics are growing more bullish below the oversold level of 20%. This would suggest a stronger likelihood toward a bullish breakout in the coming weeks.

To track my thoughts on the markets throughout the day, follow me on Twitter: www.twitter.com\DarinNewsom

Posted at 6:23AM CST 01/30/16 by Darin Newsom
 
Weekly Analysis: Energy Markets

Brent Crude Oil: The spot-month contract closed $2.56 higher at $34.74. The recently established secondary (intermediate-term) uptrend strengthened last week, building on the previous week's bullish spike reversal. The minor (short-term) trend is also up with resistance between $37.14 and $41.26, the 23.6% and 33% retracement levels of the previous downtrend from $69.63 through the low of $27.10.

Source: DTN ProphetX

Crude Oil: The spot-month contract closed $1.43 higher at $33.62. The recently established secondary (intermediate-term) uptrend strengthened last week, building on the previous week's bullish spike reversal. The minor (short-term) trend is also up with resistance between $34.78 and $38.31, the 23.6% and 33% retracement levels of the previous downtrend from $62.58 through the low of $26.19.

Distillates: The spot-month contract closed 5.94cts higher at $1.0551. Both the minor (short-term) and secondary (intermediate-term) trends are up, the latter following the previous week's spike reversal and bullish crossover by weekly stochastics. Initial minor resistance is at $1.1339, the 23.6% retracement level of the previous downtrend from $2.0572 through the low of $0.8487.

Gasoline: The spot-month contract closed 1.93cts higher at $1.1031. The market looks to have concluded its three-wave secondary (intermediate-term) downtrend, posting a bullish reversal with last week's outside range and higher weekly close. Weekly stochastics also established another bullish crossover below the oversold level of 20%, confirming the market is set to begin its seasonal uptrend that lasts through late April.

Ethanol: The spot-month contract closed 3.33cts higher at $1.426. The spot-month contract posted a new 4-week high of $1.437 last week, technically establishing a secondary (intermediate-term) uptrend. However, weekly stochastics did not crossover below the oversold level of 20%. The minor (short-term) uptrend has taken daily stochastics well above the overbought level of 80%. Next minor resistance is $1.458, the 50% retracement level of the previous downtrend from $1.619 through the low of $1.296.

Natural Gas: The spot-month contract closed 15.9cts higher at $2.298. The secondary (intermediate-term) uptrend continues to strengthen. Initial resistance is at the 4-week high of $2.495, then $2.819. The latter marks the 23.6% retracement level of the previous downtrend from $6.493 through the low of $1.684.

Propane (Conway cash price): Conway propane closed 1.63cts higher at $0.3238. The market extended its recently established secondary (intermediate-term) uptrend, testing initial resistance at $0.3249. This price marks the 33% retracement level of the previous sell-off from $0.4700 through the low of $0.2525. However, weekly stochastics remain bullish meaning the market could test the 50% retracement level of $0.3612 or the 67% retracement level up at $0.3976.

To track my thoughts on the markets throughout the day, follow me on Twitter: www.twitter.com\DarinNewsom

Posted at 5:57AM CST 01/30/16 by Darin Newsom
 

Friday 01/29/16

Gold Bulls Have a Weekend to Dream

Another month has come and gone, and what a month it was. The main feature of most global markets was increased volatility creating wild weekly, daily, and intraday moves. However, sitting outside the fray, for the most part, was one of the calmer Kings of Commodities: Gold.

Source: DTN ProphetX

As discussed in my On the Market column "Two and a half Kings", gold was on the verge of establishing major (long-term) bullish technical signals on its monthly chart, depending on how it closed out the month of January. Now that the dust has settled, things really aren’t much clearer than they were at the beginning of the day.

Gold did indeed close higher for the month, finishing at $1,118.10 as compared to December's settlement of $1,060.00. This higher close led to another bullish crossover by monthly stochastics (middle study, faster moving blue line crossing above the slower moving red line) below the oversold level of 20%. And finally, the final weekly CFTC Commitments of Traders report of the month showed noncommercial interests increasing their net-long futures position (bottom study) to 59,040 contracts, as compared to December's final 19,102 contracts. In other words, all systems are "go" for gold to finally break out of the major downtrend it has been in since 2011.

But, and there always seems to be a "but" when talking about commodities and uptrends, it could be argued that the market still has some work to do. The simplest definition of a downtrend is lower highs and lower lows. As you can see on the chart, gold has consistently posted spike highs before falling to new lows, with each high failing to move above the previous peak.

For gold bugs to really turn bullish, the more active contract (now the April contract) needs to climb above the previous high of $1,191.70 (dashed green line) from October 2015. To do that the market is going to need to see continued noncommercial buying, more than just a one month spike in interest.

That may be easier said than done given the sharp rally in the U.S. dollar index (USDX) to close out the month. The USDX rallied a full 1.000 Friday, leaving it within striking distance of its double-top highs (100.390 from March 2015, 100.510 from December 2015). Its monthly close only chart continues to show an uptrend that could stretch to the target area between 101.700 and 104.100. If that's the case gold, and the rest of the commodity sector, is going to have trouble building on bullish technical signals.

To track my thoughts on the markets throughout the day, follow me on Twitter:www.twitter.com\Darin Newsom

Posted at 3:20PM CST 01/29/16 by Darin Newsom
 

Sunday 01/24/16

Weekly Analysis: Grain Markets

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.46 3/4, up 6 1/2 cents for the week. While the secondary (intermediate-term) trend remains sideways, the NCI.X is nearing a move to an uptrend. The NCI.X left a bullish breakaway gap between the previous week's high of $3.40 1/4 and last week's low of $3.44, while putting itself in position to establish a new 4-week high above last week's peak (and close) $3.46 3/4 this coming week. A move above the December high of $3.56 1/2 would establish a bullish reversal on the monthly chart, signaling the major (long-term) trend has turned up again.

Source: DTN ProphetX

Corn (Old-crop futures): The March contract closed 7.00cts higher at $3.70 1/4. The secondary (intermediate-term) trend remains sideways with initial resistance at the 4-week high (last week's high) of $3.72 then the previous peak of $3.82 (week of December 7). However, the minor (short-term) uptrend looks to be nearing its end with as the contract tests resistance near $3.70 3/4, a price that marks the 67% retracement level of the previous minor downtrend from $3.82 through the contract low of $3.48 1/2. Daily stochastics are above the overbought level of 80%.

Corn (New-crop futures): The December 2016 contract closed at $3.92, up 6 3/4 cents for the week. Dec corn is similar to March in that its secondary (intermediate-term) trend remains sideways while indications are that the minor (short-term) uptrend is coming to an end. Initial secondary resistance is at the 4-week high (last week's high) of $3.93, then the previous peak of $4.03 1/2. Support is at the contract low of $3.77.

Soybeans (Cash): The DTN National Soybean Index (NSI.X, national average cash price) closed at $8.30 3/4, down 3 3/4 cents for the week. The secondary (intermediate-term) trend remains sideways. Support is at the triple-bottom low near $8.08 1/2 ($8.08 1/2, $8.09 1/4, $8.11 1/4) while resistance looks to be at roughly $8.48 (though the interim highs of the triple bottom are spikes to $8.57 1/2 and $8.60 1/2). A clear bullish breakout would imply a rally to near $8.90, while a bearish breakout would indicate an extended sell-off to near $7.70. However, monthly stochastics indicate the NSI.X is sharply oversold and nearing a confirming bullish crossover (the initial was posted at the end of November 2015).

Soybeans (Old-crop futures): The March contract closed 2.50cts lower at $8.76 1/2. Both the secondary (intermediate-term) and minor (short-term)) trends remain sideways. Regarding the minor trend, March soybeans continue to find renewed selling interest between $8.81 3/4 and $8.91 3/4, prices that mark the 50% and 67% retracement levels of the previous sell-off from $9.11 1/2 through the low of $8.52.

Soybeans (New-crop futures): The November 2016 contract closed 1.50cts lower at $8.83 3/4. The secondary (intermediate-term) trend remains sideways between the recent high of $9.26 1/2 and the 4-week low of $8.68. Below that support is the contract low of $8.50.

SRW Wheat (Cash): The DTN SRW Wheat National Index (SR.X, national average cash price) closed at $4.33, up 1/2 cent for the week. Technically the secondary (intermediate-term) trend remains up despite last week's lower close and continued neutral-to-bearish weekly stochastics. The most recent signal was a bullish reversal on its weekly chart (week of January 4).

SRW Wheat (New-crop futures): The July 2016 Chicago contract closed 3/4ct higher at $4.85 1/4. Technically both the secondary (intermediate-term) and minor (short-term) trends remain up. Initial resistance is at the recent high of $4.94 3/4.

HRW Wheat (Cash): The DTN HRW Wheat National Index (HW.X, national average cash price) closed at $4.12 1/4, down 3 cents for the week. Despite the lower close the secondary (intermediate-term) trend remains up. Initial resistance is at the 4-week high of $4.21 3/4. Support is at the 4-week low of $3.95 1/4.

HRW Wheat (New-crop futures): The July 2016 Kansas City contract closed 2.75cts lower at $4.90 3/4. The secondary (intermediate-term) trend remains up with initial resistance is at the 4-week high of $5.02. Weekly stochastics are bullish above the oversold level of 20%.

HRS Wheat (Cash): The DTN HRS Wheat National Index (SW.X, national average cash price) closed at $4.73, down 2 cents for the week. The secondary (intermediate-term) trend remains down despite the recent consolidation pattern. Last week's low of $4.71 would signal the downtrend could resume with the target price being the major (long-term) low of $4.44.

HRS Wheat (New-crop futures): The September 2016 Minneapolis contract closed 1.75cts lower at $5.19. The secondary (intermediate-term) trend turned sideways as the contract equaled its low of $5.15 1/4 last week while weekly stochastics turned neutral below the oversold level of 20% once again. Resistance is at the 4-week high of $5.33 1/4. A bearish breakout would suggest an extended sell-off to $4.97 1/4. A bullish breakout would put the upside target at $5.51 1/4.

To track my thoughts on the markets throughout the day, follow me on Twitter: www.twitter.com\DarinNewsom

Posted at 10:46AM CST 01/24/16 by Darin Newsom
 
Weekly Analysis: Livestock Markets

Live Cattle: The more active April contract closed $4.575 higher at $133.075. The key factor in live cattle remains its high volatility, with the weekly figure for the April futures contract calculated at 21.8% last Friday. Trends on both weekly (intermediate-term) and daily (short-term) charts are difficult to discern, with the major (long-term) trend on the monthly chart still sideways-to-down in the wide range between $138.90 and December's low of $121.975.

Source: DTN ProphetX

Feeder Cattle: The more active March contract closed $7.625 higher at $157.90. While indications are March feeder cattle remain in a wide ranging secondary (intermediate-term) sideways trend, the contract did post a bullish outside week last week. This would suggest a test of the 4-week high at $166.875 is likely. Retracement resistance is near $165.30, then $171.10. These prices mark the 33% and 50% levels of the previous downtrend from the high of $212.525 through the contract low of $141.70.

Lean hogs: The more active April contract closed $1.55 higher at $69.000 last week. Technically, the secondary (intermediate-term) trend remains sideways while the contract has seen a strong minor (short-term) uptrend from its low of $59.225 through last week's high of $69.675. However daily stochastics indicate the contract is sharply oversold, and given last Friday's close back below resistance near $69.05 a move to a minor downtrend could soon be seen. The contract also tested secondary resistance on its weekly chart near $69.55.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.46 3/4, up 6 1/2 cents for the week. While the secondary (intermediate-term) trend remains sideways, the NCI.X is nearing a move to an uptrend. The NCI.X left a bullish breakaway gap between the previous week's high of $3.40 1/4 and last week's low of $3.44, while putting itself in position to establish a new 4-week high above last week's peak (and close) $3.46 3/4 this coming week. A move above the December high of $3.56 1/2 would establish a bullish reversal on the monthly chart, signaling the major (long-term) trend has turned up again.

Soybean meal: The March contract closed $2.20 lower at $268.50. The secondary (intermediate-term) trend remains sideways between resistance at its 4-week high of $277.20 and support at the contract low of $263.80. Weekly stochastics are neutral-to-bullish below the oversold level of 20%.

To track my thoughts on the markets throughout the day, follow me on Twitter: www.twitter.com\DarinNewsom

Posted at 9:16AM CST 01/24/16 by Darin Newsom
 
Weekly Analysis: Energy Markets

Brent Crude Oil: The spot-month contract closed $3.24 higher at $32.18. The market established a spike reversal on its weekly chart, in conjunction with a bullish crossover by weekly stochastics below the oversold level of 20%. Both would indicate the secondary (intermediate-term) trend has turned up. The minor (short-term) trend on the daily chart also turned up last week with a bullish crossover by stochastics Thursday.

Source: DTN ProphetX

Crude Oil: The spot-month contract closed $2.77 higher at $32.19. The market established a spike reversal on its weekly chart, in conjunction with a bullish crossover by weekly stochastics below the oversold level of 20%. Both would indicate the secondary (intermediate-term) trend has turned up. The minor (short-term) trend on the daily chart also turned up last week with a bullish crossover by stochastics Thursday.

Distillates: The spot-month contract closed 6.14cts higher at $0.9957. The market established a spike reversal on its weekly chart, in conjunction with a bullish crossover by weekly stochastics below the oversold level of 20%. Both would indicate the secondary (intermediate-term) trend has turned up. The minor (short-term) trend on the daily chart also turned up last week with a bullish crossover by stochastics Friday.

Gasoline: The spot-month contract closed 6.26cts higher at $1.0838. The spot-month contract posted a spike reversal on its weekly chart, though unlike the oil contracts did not see a bullish crossover by weekly stochastics. Daily stochastics did establish a bullish crossover below the oversold level of 20% signaling the minor (short-term) trend has turned up. This could lead to a bullish turn in the secondary (intermediate-term) trend as well.

Ethanol: The spot-month contract closed 4.3cts higher at $1.393. While the secondary (intermediate-term) trend remains sideways, last week's bullish close put the spot-month contract in position to establish a new 4-week high. A rally through the previous mark of $1.405 would signal the market has moved into a secondary uptrend. The minor (short-term) trend on the market's daily chart remains up.

Natural Gas: The spot-month contract closed 3.9cts higher at $2.139. While the secondary (intermediate-term) trend is up the minor (short-term) trend remains down. The consolidation pattern on the market's daily chart looks to be a bear flag, indicating a resumption of the minor downtrend could take the spot-month contract to a test of next support at $1.954. This price marks the 67% retracement level of the previous minor uptrend from $1.685 through the high of $2.495. Daily stochastics have not crossed below the oversold level of 20% as of last Friday's close.

Propane (Conway cash price): Conway propane closed 4.00cts higher at $0.3075. The market looks to have established a two-week reversal given last Friday's settlement near the weekly high of $0.3100 following the previous Friday's settlement near the new low of $0.2525. The market could establish a clearer signal of moving to a secondary (intermediate-term) uptrend with a move to a new 4-week high above $0.3575.

To track my thoughts on the markets throughout the day, follow me on Twitter: www.twitter.com\DarinNewsom

Posted at 8:34AM CST 01/24/16 by Darin Newsom
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