Providio's Daily Futures Market Comment for 11/29/11 (Part 1)

Discussion in 'Energy Futures' started by provitrading, Nov 30, 2011.

  1. Currencies:Â_Â_Â_Â_ 29Nov Rates of Change have reversed, but none have pulled Momentum with them… yet. Volumes have returned to decent levels and Open Interest has actually risen in selected markets.

    Aussie: 29Nov The wider picture since September shows a pattern of higher highs and higher lows. Recent action keeps within this theme, as the most recent low failed to breach the previous low of 93.02 on 04Oct. This market has been moving very rapidly, so beware of quick overextensions from moves that have gone too far, too fast. This recent rally off the lows may be one of those kinds of moves. Beware of a gap down to 9748 left on the Sunday night opening.

    That said, resistance should be offered at a variety of levels in relation to the previous fall:

    * The previous decline paused at some congestion at par on 10Nov which is also near the 38.2% retracement (100.35) of the move.
    * The 200-day moving average is just above par at 102.02
    * A new high would have to take out 26Oct’s at 106.87.

    Open interest has fallen, but not to a new recent low.

    Seasonal Snapshot: All three patterns firming until the end of the year.

    British: 29Nov The previous decline paused at 156.85. Look for this area to offer some resistance. Resistance has also been offered at the 200-day moving average, currently at 160.70. Open interest has been rising on this recent rally and Volume has been decent.

    Seasonal Snapshot: The 5yr is diverting from the 15&30yr: 5yr continues the descent into the end of the year, the 15&30yr move higher.

    Canadian 29Nov Still struggling with the 9700 level which served as material support level before the general collapse to the 9500 lows. 9650 is now a support level to watch as another failure to hold likely targets much lower prices. Open interest is consolidating last week’s gains.

    Seasonal Snapshot: All three patterns are weak through the end of the year.
    Dollar Index: 29Nov The recent failure to achieve new highs (7987 on 25Nov vs 80.43 high on 04Oct) targets the 200-day moving average at 76.50. Before that, old resistance at 78.60 should also offer new support.

    Seasonal Snapshot: Choppy consolidation with a downward bias until year end.

    Euro-FX: 29Nov Despite recent headlines, the Euro is not really participating in this recent reversal of fortune… today was another session of probing higher, then giving away gains by the close. Yesterday resulted in a Doji Candle, indicating indecision and today may see the same. Any hints of a rally have been accompanied by a decline in open interest… the crowd is obviously short.

    Seasonal Snapshot: A more positive bias until the end of the year.

    Yen: 29Nov Momentum has gone negative and there is secondary weakness. However, it should be noted the Yen bounced off the post-intervention congestion area. Though there are fundamental reasons to short the Yen, the technical picture is not yet clear.

    Seasonal Snapshot: Consolidation with a downward bias ion all three patterns until year end.

    Energies: 29Nov A positive day across the complex, but an ‘inside’ one in the Crude. Expectations for tomorrow’s DOEs show little change in the supply picture.

    Seasonal Snapshot: All three tracked Petro markets commence a pronounced negative bias at the onset of December until mid month.

    Crude: 29Nov Crude has been oscillating around the 200-day moving average (97.20), finding support there the last two sessions. Below this level, the Jan contract has been supported at 95.00. Volume has been trending higher on this recent rally, but from much lower levels. Our rising Rate of Change is threatening to pull Momentum higher, signaling a resumption of the month-and-a-half rally. The previous high at 103.37 (17Nov) should offer some resistance.

    NatGas: 29Nov The Jan contract needs to break out above its clearly defined falling channel, currently capped at 3.80. The new positive Momentum is a good start. Cold weather would be better. If it can’t get there, look for a further test of the 3.45 support, now in the Jan, Feb, and March contracts.

    Seasonal Snapshot: The 15 & 30yr patterns are pointed strongly to the downside through the end of the year. The 5yr is sideways with a mild downward bias.

    Equities: 29Nov Today’s modest rally ran into some resistance at the old lows from early Nov (SP 1208; Dow 11600). We should start seeing the action regress as the markets wait for Friday’s payroll report. This sector has seen the steepest, most drastic reversal of our Oversold measures.

    Seasonal Snapshot: The SP and Dow Dec contracts’ 5yr pattern is in a downward bias until the end of November. The 15&30yr patterns are in an uptrend for the rest of the year.

    The NASDAQ’s upward pattern has been in place since the middle of July and continues until the end of the year.

    Grains: 29Nov The risk-on trade is still current on the day but the earlier material gains for Corn and Soybeans are proving ephemeral at best. Volume is difficult to read in Wheat and Corn due to the roll to March as front month. Inferring from Jan Soybeans, Volume is suspect, being down from yesterday’s modest post-holiday levels. Likely short covering in the face of the Euro-zone inspired moves.

    Corn: 29Nov While a nice move in the early portion of the session was material, the fact that it retreated from the 38.2% retracement 11/17 highs and sell-off. Volume is up on March but within the context of additional volume related to the roll from Dec to March. With recent action, Mar has bounced off the major 5.90 support level. That traces back to late June’s test and again in late Sept. If a test of 5.90 produces a penetration and settlement below, the target is materially lower; likely below 5.00.

    Seasonal Snapshot: The 15 and 30 year patterns are now in a general modest downtrend going into early December. The 5-year choppy, but with a modestly upward bias until early Dec when it rises precipitously until the end of the year.

    Soybeans: 29Nov Despite today’s settlement higher, it’s on a Doji (indecisive day)and with lower Volume. Indecisive action points to looking at the bias and the bias is lower. In addition to our still relevant comment from 11/23, Jan has failed to convincingly bounce materially through the 11.20 resistance. Jan has 2 significant negative factors in addition to its generally negative technical bias. First, It has decisively broken support near 11.65 with lower lows and lower highs extending back to the 10/14 highs. Secondly, that high is an almost perfect 38.2% retracement of the 8/31-10/4 move. With the failure at that 10/14 high, the current falling Trend is strongly validated. This speaks to likely substantially lower levels. The 200-day Moving Average is clearly falling.

    Seasonal Snapshot: The end of November marks the end of the upward seasonal bias in all three patterns. The 30yr consolidates and the 5&15yr patterns chop down until mid Dec, then rise until year’s end.

    Wheat: 29Nov Mar is now front month and today’s Volume figures reflect the roll from Dec. While primary indicators are still negative, our secondary indicators are rising, indicating an easing of downward pressure. Mar ran into resistance at 6.20. Failure at that level, also showing from 11/20, indicates a likely test of the 5.85 support. Look for another test of the resistance.