In This Issue
Soybeans See Short-Covering Bounce But Chart Damage Serious
Economic Reports and Expiration Notices
by Jim Wyckoff
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July soybeans on Wednesday morning were seeing a short-covering bounce following recent strong losses that have produced serious near-term chart damage to suggest that a market top is in place. Tuesday's price action, in which prices opened very sharply lower and then closed higher and near the session high did produce a selling "exhaustion tail," whereby sellers became exhausted at lower price levels and then prices drifted back higher to close near the session high. Now, Tuesday's low of $11.35 a bushel in July soybeans is very strong technical support. There is strong psychological and trendline resistance at $13.00 a bushel in July beans. It would not surprise me to see July soybeans in the near term, or even the next couple weeks or longer, trade within the support and resistance levels seen on the daily chart. But remember that at present the soybean bears still have the near-term technical advantage.
Jim has an excellent daily newsletter where he reviews different markets, alerts you for potential trades and much more. Included is his great bi-weekly newsletter with charts and a little longer term outlook. We recommend checking out his website, educational CDROM, and services at Jim Wyckoff
February was another difficult month for the markets, with the major equity indices chalking up another losing month as the credit crisis grinds on. News of an imminent announcement on the bond insurers rescue plan that could shield their AAA ratings provided a glimmer of hope, but not enough to turn markets around. As market watchers wait for 'the other shoe to drop' in the sagging financial sector, the shoe in question may be busy kicking the dollar while it is down. The weak dollar is driving the stampede into commodities, and the Fed has made it clear it will continue to favor rate cuts to support the ailing economy rather than holding the line against rising prices. In light of this situation, there are several key events to watch out for this month, leading up to the FOMC meeting on March 18.
Earnings
Wall Street firms will report slimmer earnings this month (GS 3/12, LEH 3/14, MS /20); earnings for most of the brokers and investment banks are expected to be halved from a year ago, and some could be even worse. Investors may overlook more modest results, however, as long as the financial firms manage to refrain from announcing further writedowns. FedEx also reports earnings this month (3/20) and may provide a final post-mortem on the Christmas shopping (and shipping) season.
Commodities...
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Disclaimer:
Trading commodity futures and options involves substantial risk of loss. The recommendations contained in this letter is of opinion only and does not guarantee any profits. These are risky markets and only risk capital should be used. Past performances are not necessarily indicative of future results. This is not a solicitation of any order to buy or sell, but a current futures market view provided by Cannon Trading Inc. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgment in trading!
Source: Moore Research Center, Inc.
| Date | Reports | Expiration & Notice Dates |
|---|---|---|
| 04/03 Thu |
7:30 AM CDT - USDA Weekly Export Sales
7:30 AM CDT - Initial Claims-Weekly 9:00 AM CDT - ISM Services(Mar) 9:30 AM CDT - EIA Gas Storage 3:30 PM CDT - Money Supply |
|
| 04/04 Fri |
7:30 AM CDT - Nonfarm Payrolls & Unemploy Rate(Mar) 7:30 AM CDT - Ave Workweek & Hourly Earnings(Mar) 7:30 AM CDT - Dairy Products Prices |
LT: Apr LC Options(CME)
Apr US Dollar Index Options(ICE) Apr Currency Options(CME) Apr Canadian Dollar Options(CME) May Cocoa Options(ICE) |
| 04/07 Mon |
2:00 PM CDT - Consumer Credit(Feb)
|
|
| 04/08 Tue |
9:00 AM CDT - Pending Home Sales(Feb)
1:00 PM CDT - FOMC Minutes(Mar 18) |
|
| 04/09 Wed |
7:30 AM CDT - WASDE Report & Crop Production 7:30 AM CDT - Supply & Demand Report 9:00 AM CDT - Wholesale Inventories(Feb) 9:30 AM CDT - API & DOE Energy Stats |
|
| 04/10 Thu |
7:30 AM CDT - Trade Balance(Feb)
7:30 AM CDT - USDA Weekly Export Sales 7:30 AM CDT - Initial Claims-Weekly 9:30 AM CDT - EIA Gas Storage 1:00 PM CDT - Treasury Budget(Mar) 3:30 PM CDT - Money Supply |
FN: Live Cattle(Apr)
|
* Please note that the information contained in this letter is intended for clients, prospective clients, and audiences who have a basic understanding, familiarity, and interest in the futures markets.
** The material contained in this letter is of opinion only and does not guarantee any profits. These are risky markets and only risk capital should be used. Past performances are not necessarily indicative of future results.
*** This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgment in trading!