TY1PRW010615

Ten-Year Notes, Jan. 6 Reassessment

Ten-Year Notes (TYH5), Jan. 6, 2014 General Assessment: Short term trader sentiment has become very positive on notes and bonds following recent upward momentum, but a large number of longer time-frame oriented traders remain short the market in anticipation of gradual monetary policy normalization in mid-2015. These shorts must however contend with negative carry, event-risk, and relative value…

CLF5PRD121214

Crude Oil, Dec. 12 Reassessment

Crude Oil (CLF5), Dec. 12, 2014 General Assessment: Crude is trying to establish a new price equilibrium in a post-OPEC world. With the U.S. producing as much oil as Saudi Arabia, and other large exporters like Russia and Venezuela acting solely in their own interests, OPEC knows it can no longer effectively control output and prices and the…

ZCH5PRD120414

Corn, Dec. 4 Reassessment

Corn (ZCH5), Dec. 4, 2014 General Assessment: After falling to 330 on Oct. 1, March corn recovered back towards 400 and the 38% retracement of the decline from the March highs. Corn has since trended sideways in what some observers may interpret as the right shoulder of an inverse head & shoulders bottom. A convincing break above 400…

ESZ4PRD120414

S&P 500, Dec. 4 Reassessment

S&P 500 (ESZ4), Dec. 4, 2014 General Assessment: Much like last time, sentiment is still very bullish, positions are long, momentum is stretched, and valuations are high, but investors’ faith in the central banks remains unshaken. The ECB, BOJ, and BOC all expected to keep major equity indices on a rising path with yet more stimulus. The market,…

DXY120214

Is the Long Dollar Trade Over?

It seemed almost too obvious. The European Central Bank was imposing negative interest rates and devising new quantitative easing schemes to combat the growing threat of deflation; the SNB was buying foreign currencies in “unlimited quantities” to cap the value of the Franc; the Bank of Japan was madly printing Yen in a desperate frenzy to…

CL1PRD111914

Crude Oil, Nov. 19 Reassessment

Crude Oil (CLF5), Nov. 19, 2014 General Assessment: Several factors have conspired to push crude prices sharply lower over the past few months. Competition among OPEC members for increased market share amid rising production in the US, high inventories, waning demand, and a steady liquidation of long futures positions among speculators have all contributed to a $35 decline…

ESZ4PRD111214

S&P 500, Nov. 12 Reassessment

S&P 500 (ESZ4), Nov. 12, 2014 General Assessment: Sentiment is bullish, positions are long, momentum is stretched, and valuations are high, but investors’ faith in the central banks appears unshaken (for now). Nonetheless, trend resistance may come into play today or tomorrow and potentially encourage a decline back into the meat of what is looking like a large…

HG1PRW111014

Copper, Nov. 10 Reassessment

Copper (HGZ4), Nov. 10, 2014 General Assessment: Copper has probed the 300 area numerous times over the past few years without much downside follow-through. Subsequent bounce attempts have grown successively weaker as bulls have grown discouraged, forming a large descending triangle pattern on the weekly charts. Sentiment has now reached bearish extremes, falling to just 6% bulls on…

ZWZ4PRD111014

Wheat, Nov. 10 Reassessment

Wheat (ZWZ4), Nov. 10, 2014 General Assessment: After building a modest base in the high 400s, wheat recently recovered enough to test its prior support and breakdown level at 545, where it then failed and retraced a bit of its bounce. Broadly speaking, the near and medium term trend for wheat now appears rather noncommittal, but speculators remain…

NGZ4PRD110614

Natural Gas, Nov. 6 Reassessment

  Natural Gas (NGZ4), Nov. 6, 2014 General Assessment: Natural Gas traders spent much of the spring and summer accumulating large short positions after the cold weather pushed gas prices sharply higher over the winter. Prices dropped sharply after spiking in February, then consolidated a bit before declining further in July. One final push lower in October found…