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Commodities Daily Hotline
12 November 2015                             By Cornelia Dichio, Analyst
Chart of the day: Counter rally by Hogs


In the Meats sector, the Lean Hogs instrument's decline from the October ceiling at 68.825 was steep; and the recently low level of the RSI indicates that it had become very oversold.  A rebound from a new contract low, at 52.80 has occurred.  A long trade is opened in expectation of a further recovery over the short term.  The stop is placed at 51 for the time being.

Daily Comment:


Also in the Meats sector, the Cattle issues have also bounced from the oversold contract lows, at 127.425 for the Live instrument shown here and 160.775 for the Feeder product.  There is now the possibility of some further 'bear trap' recovery over the near term following the failed breaks under last month's lows.

In Grains, the Oats contract has recorded a 3.6% gain as it jumps up to the highs of the short-term range at 240.  This is also a sideways area running across the page.  We watch to buy in the event of a breakout, as a base formation would be in place.

A long trade is opened in Soft commodity LIFFE Cocoa following the move over the September high at 2256 (see yesterday's hotline), which has taken prices into new high ground.  The stoploss is placed at 2120 for now.

In the Industrial Metals grouping, Lead and Zinc have encountered intraday support at 1582 and 1553.5, respectively, as they rebounded from oversold levels on Wednesday.  Given the failed breaks under the prior lows, there is a chance of an additional 'bear trap' move upwards.  We remain long Zinc.

In the Precious Metals sector, Platinum has extended its short-term decline past the early-October floor at 893.4.  This takes prices to a new contract lows.  We would like to point out, though, that the RSI is in oversold territory.  This increases the likelihood of a counter move before long.

In Energies, the Heating Oil instrument has continued to retrace the small rally after a 'Peak' Key Day Reversal was drawn on 4 November at 158.16.  A clearance of that barrier is now required to remove pressure from the August-October floor at 142.71; and revive the base theory. 

Gainers / Losers
Top 5 Gains.
SymbolStockClose% Change
LHZ5Lean Hogs CME (LH Dec 2015)56.175+4.9%
O Z5Oats CBT (December 15)234.75+3.6%
O 1Oats CBT 1st Month Continuation234.75+3.6%
LH1Lean Hogs CME 1st Month Continuation55.875+3.5%
LH2Lean Hogs CME (cont)57.075+3.5%
Top 5 Losses.
SymbolStockClose% Change
PAZ5Palladium NYME (Dec 15)577-3.5%
PA1Palladium NYME 1st Month Continuation577-3.5%
PA2Palladium NYME (cont)577.5-3.5%
COZ5Crude Oil IPE (December 2015)45.81-3.4%
The Commodities Model Portfolio
Date Stock Code Type Open Price Current Price % P&L Target Stop
5 Oct 2015 Soybean Oil CBT (December 2015) BOZ5 Long 28.3 27.18 -3.96% 26.75
9 Oct 2015 Zinc Special HG LME 3 Months LMZSDS03 Long 1836 1623 -11.60% 1550
14 Oct 2015 Silver CMX (December 2015) SIZ5 Long 16.117 14.263 -11.50% 1415
4 Nov 2015 Wheat MATIF (December 2015) CAZ5 Long 184.5 181.5 -1.63% 171.5
10 Nov 2015 Sugar NYBOT (March 2016) SBH6 Long 14.71 14.69 -0.14% 13.45
11 Nov 2015 Lean Hogs CME (LH Dec 2015) LHZ5 Long 56.175 56.175 0.00% 51
11 Nov 2015 Cocoa LIFFE (December 2015) QCZ5 Long 2256 2260 +0.18% 2120
  • Longs are opened in Hogs (Chart of the Day) and Cocoa.
  • We watch to buy Oats.
Daily Analysis

Symbol Name Comment Close 1 day Support Resistance
CRYCRB Index NYFEFalls from the 'Peak' KDR of 4 Nov out of the s-t range. Points to the Aug low. Questions base theory.188.348-0.6% 185.132203.679/198.318
CLZ5Crude Oil NYME (December 15)Retraces the small 'Bear trap' rally. Tests Oct support (42.58). Questions base theory.42.93-2.9% 39.22/42.5851.42/48.36
XBZ5Gasoline RBOB NYME (December15)Failed break over the s-t range resistance (bull trap). Potential base extension.132.94-2.4% 117.56/126.2164.19/147.14
HOZ5Heating Oil NYME (December 15)Small rally from the Aug floor is capped by a 'Peak' KDR on 4 Nov. Drifts back to test the Aug-Oct floor. Base theory under scrutiny.144.77-2.6% 142.71166.43/158.16
NGZ5Natural Gas NYME (December 15)Counter move from the oversold contract low struggles near 2.1882.875/2.78
QZZ5Coal (December 15)Remains penned in by the 50-day MA. Probes the Jun floor.41.78-0.2% 41.7542.98
GCZ5Gold CMX (Dec 15)Oversold s-t fall tests the Jul/Aug floor.1084.9-0.3% 1073.71207.3/1191.7
PAZ5Palladium NYME (Dec 15)Extends the oversold s-t decline from the Oct high.577-3.5% 519.2/568800/724.95
PLF6Platinum NYME (January 16)Extends the oversold fall past the early-Oct contract low (893.4).883.1-1.8% /1095.8/1039
SIZ5Silver CMX (December 2015)Failed break over the July/early-Oct band. 'Bull trap' reaction continues towards the Aug low. RSI oversold.14.263-0.6% 13.9517.85/16.51
LMAHDS03Aluminium HG LME 3mOversold fall towards the 2009 lows has reversed.1518+0.7% 1279/1383/14601669/1664.75
LMCADS03Copper Grade A LME 3mFalls to the s-t range lows. Questions base theory. RSI low.4943+0.4% 4710/48555722.5/5440.5
LMPBDS03Lead LME 3 MonthsFalls to intraday support at 1582. Failed break under the early-Oct low (1608). Potential 'bear trap'. RSI low.1620-0.9% 15351881/1832
LMNIDS03Nickel LME 3 MonthsOversold s-t fall shows a slight loss of momentum.9660+1.6% 8850/921511980/11275/10785
LMSNDS03Tin HG LME 3 Months'Trough' KDR of 10 Nov reverses the oversold fall from the m-t range/base highs; and 200-day MA. 'Bear trap' under the Sept low (14560) within the pattern.14825+0.7% 13365/1445017651/16600
LMZSDS03Zinc Special HG LME 3 MonthsOversold fall finds intraday support at 1553.5. Failed break under the Sept floor (1601.5). Potential 'bear trap'.1623+1.0% 1432/14402117.5/1905.5/1881.5
FCF6Feeder Cattle CME (January 2016)Bounces from the oversold contract low. Potential failed break under the early-Oct low (164.05)166.075+2.8% 160.775192.275/187.5
LCZ5Live Cattle CME (Dec 15)Rebound from oversold. Failed break under the early-Oct floor (128.1). Potential 'bear trap'.131.325+2.3% 127.425146.725/144.725
LHZ5Lean Hogs CME (Dec 15)Rebounds from the oversold contract low.56.175+4.9% 52.870.8/68.725
C Z5Corn CBT (December 15)Small bounce from the new contract low. Failed break under the Aug low (357.5). Potential 'bear trap'. Revives base theory.362.25+0.9% 356?402/387.5
O Z5Oats CBT (December 15)Jumps up to the highs of the s-t range/base; at the sideways area along 240.234.75+3.6% 210253/240
IJG6Rapeseed LIFFE (February 16)Pauses the rally towards the Aug high (387.5).375.75+0.3% 340.25/356397/387.5
S F6Soybeans CBT (January 16)Holds the s-t fall near the contract low.860.75+0.6% /923.5
SMZ5Soybean Meal CBT (December 2015)Retreat from sideways resistance near 320; and the 200-day MA, shows a loss of momentum on the way to the June floor.294+0.6% 286344/321
BOZ5Soybean Oil CBT (December 2015)Failed break over the small late-Aug/early-Oct base. 'Bull trap' reaction follows.27.18-0.3% 25.731.14/29.48
W Z5Wheat CBT (December 2015)Continues to find resistance at the Aug-Oct highs; near the 200-day MA.494.75+0.8% 463/480623.75/533.25
QKK6Wheat LIFFE (May 2016)Easier within the s-t range (base?).120.25-0.2% 117.15127.6
CCZ5Cocoa NYBOT (December 2015)Finds support at the 50-day MA. Reverses up to the highs of the m-t trading band. Questions top theory.3307+1.2% 2989/31873375/3341
KCZ5Coffee NYBOT (December 2015)Renews the s-t decline to the Sept floor.116.8+0.4% 14.55137.6/122.35
CTZ5Cotton (December 2015)Drops out of the s-t range forming beneath resistance at the 200-day MA, which was confirmed with a 'Peak' KDR on 22 Oct.62.18+0.4% 59.78/60.9767/64.69
LBF6Lumber CME (January 2016)Reverses the s-t fall. Points back towards the Oct high.252.2+1.3% 218/240.3267
JOF6Orange Juice (January 2016)Extends the overbought advance to intraday resistance at 159.05153.65+3.1% 105.05/128.45164.1/162.75
SBH6Sugar NYBOT (March 2016)Reverses the correction from overbought. Reaffirms support near the 50 and 200-day MAs.14.69-0.1% 11.28/13.6916.64/15.53

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