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Commodities Daily Hotline
14 November 2014                             By Cornelia Dichio, Analyst
Chart of the day: New low for Crude, but oversold


The Oil sector suffered a further slide on Thursday.  Gasoline and Heating Oil issues have dropped to new contract lows, while Crude, shown here, is pointing in the direction of the 2009 lows at 71.2-64.56.  In all three cases, the RSI is indicating that the short-term declines are oversold.  In fact, these instruments are trading in positive ground in the out of hours session, with this Crude contract currently priced at 74.27, though much stronger up moves are required to confirm new floors.


Daily Comment:


Natural Gas has posted a 5% loss, as it retraces a good portion of the recovery from the October floor at 3.62 (see 'Losers' for the chart).

The Energy sector has a large weighting in the CRB Index, at 39%.  Oils and Natural Gas products slipped lower on Thursday.  This has certainly had a negative effect on the Commodities index, which has renewed the downtrend towards the August 2010 low at 260.22.  A push over 271.979 is needed to interrupt the downward tendency.

In contrast, the Live Cattle instrument extended its uptrend to new high ground during yesterday's session.  We continue to hold a long position in the item and raise the stop to 162.75, keeping this just beneath the 50-day moving average.

The stop is tightened on the short held in Cocoa, where the decline from the September peak is becoming oversold.  Placed just over Thursday's high, at 2848, this guarantees a profit.

Also in the Softs sector, Cotton has dropped out of the multi-month range to a new contract low.  The fall through the September floor at 60.83 has triggered the opening of a short trade (see yesterday's report).  The stop is placed at 67 for the time being.

The chart for the LIFFE Sugar contract was last printed in the hotline for 12 November.  It was decided to ignore the bullish P&F Breakout signal in favour of waiting for a push over the sideways area along 440 before considering longs.  A 'Peak' Key Day Reversal was drawn yesterday, reaffirming that barrier; and certainly delaying a base breakout.

One observes that the recovery by the NYBOT Sugar issue has slowed by the 50-day MA, at 16.44.

On the other hand, Coffee has recorded a 2.4% gain, as the oversold fall finds support near the September floor and the 200-day MA.  A long is established in expectation of a further rally towards the October trading levels (see also report for 11 November).  The stop is inserted at 175.

In Grains, Corn appears on the 'Gainers' board with +2.3%.  A long is opened here on the push past the August high at 381 (see hotline for 12 November).  Note that the shorter-term MA is offering support and so the stop is placed under that line, at 350.

Gainers / Losers
Top 5 Gains.
SymbolStockClose% Change
KCZ4Coffee NYBOT (December 2014)188.75+2.4%
KC1Coffee NYBOT 1st Month Continuation188.75+2.4%
KC2Coffee NYBOT (cont)193.15+2.3%
C Z4Corn CBT (December 14)386.25+2.3%
Top 5 Losses.
SymbolStockClose% Change
XB1Gasoline RBOB NYME 1st Month Continuation200.16-5.0%
NG1Natural Gas NYME 1st Month Continuation3.977-5.0%
XBZ4Gasoline RBOB NYME (December 2014)200.16-5.0%
NGZ4Natural Gas NYME (December 14)3.977-5.0%
XB2Gasoline RBOB NYME (cont)198.27-4.7%
The Commodities Model Portfolio
Commodities Model Portfolio Longs
Date Stock Code Type Open Price Current Price % P&L Stop Comment
23 Oct 2014 Live Cattle CME (LC Dec 2014) LCZ4 Long 169.1 169.65 +0.33% 162.75
11 Nov 2014 Soybeans CBT (January 15) S F5 Long 1037.5 1053.5 +1.54% 985
12 Nov 2014 White Maize SAFEX (December 04) WZZ4 Long 2000 1999 -0.05% 1825
13 Nov 2014 Coffee NYBOT (December 2014) KCZ4 Long 188.75 188.75 0.00% 175
13 Nov 2014 Corn CBT (December 14) C Z4 Long 381 386.25 +1.38% 350
Commodities Model Portfolio Shorts
Date Stock Code Type Open Price Current Price % P&L Stop Comment
29 Oct 2014 Lumber CME (January 2015) LBF5 Short 325 323.5 +0.46% 345
4 Nov 2014 Tin HG LME 3 Months LMSNDS03 Short 19575 19860 -1.46% 20600
12 Nov 2014 Cocoa NYBOT (December 2014) CCZ4 Short 2851 2798 +1.86% 2848
13 Nov 2014 Cotton (December 2014) CTZ4 Short 60.83 59.73 +1.81% 67
  • Longs are opened in Corn and Coffee; and a short in Cotton.
  • Stops are adjusted on long Live Cattle and short Cocoa.


Daily Analysis

Symbol Name Comment Close 1 day Support Resistance
CRYCRB Index NYFEExtends the downtrend towards the Aug 2010 low (260.22).264.556-1.6% 247.25/253.48/260.22275.411/271.979
CLZ4Crude Oil NYME (December 14)Renews the oversold decline.74.21-3.8% 64.56/71.284.08/79.85
XBZ4Gasoline RBOB NYME (Dec14)Resumes the fall to a new contract low. RSI oversold.200.16-5.0% /248.83/220.53
HOZ4Heating Oil NYME (Dec 14)Falls out of the s-t range to a new contract low. RSI oversold.236.21-3.5% /272.49
NGZ4Natural Gas NYME (Dec 14)Overbought rally finds intraday resistance near supply from this year's earlier top. Retraces.3.977-5.0% 3.625/4.544
QZZ4Coal (Dec 14)Retreats from downtrend resistance at the 50-day MA. Tests the Oct low.51.95-0.1% 51.6560.02/53.25
GCZ4Gold CMX (Dec 14)Trades above the oversold contract low. Potentially basing.1161.5+0.2% 1130.41297.6/1255.6
PAZ4Palladium NYME (Dec 14)Extends the range forming beneath resistance at the early-Oct high; near the 50 and 200-day MAs. Potential base?770.85-0.4% 729.95825.45/812.75
PLF5Platinum NYME (January 15)The oversold and accelerated contract low holds.1199-0.5% 1186.51350.2/1294.8
SIZ4Silver CMX (December 2014)Pauses the oversold decline at a new contract low.15.621-0.0% 15.0418.885/17.82
LMAHDS03Aluminium HG LME 3mS-t rally pauses beneath the Aug/Sept ceiling.2041-0.9% 1953/20082184/2119.5
LMCADS03Copper Grade A LME 3mDowntrend flattens above the Apr-Oct floor.6657-0.3% 6321/6513.256992/6835.5
LMPBDS03Lead LME 3 MonthsRanging near the 2013 floor (1938). Tests the pattern highs, which hold.2020-1.4% 1818/19382120.25/2058
LMNIDS03Nickel LME 3 MonthsDowntrend slows above the oversold 'Trough' KDR of 28 Oct.15400-1.3% 14830/1469016999/16175
LMSNDS03Tin HG LME 3 MonthsPotentially developing downtrend resistance near the 50-day MA.19860-1.3% 18809/1900020620/20245
LMZSDS03Zinc Special HG LME 3 MonthsS-t rally from the 200-day MA falters. Top heavy.2251-1.3% 2073.25/21662354/2331
FCF5Feeder Cattle CME (January 2015)Reasserts the uptrend after the correction from the overbought contract high.234.225+0.4% 216.525/225.75239.3
LCZ4Live Cattle CME (Dec 14)Renews the uptrend.169.65+1.1% 161.8/164.9/
LHZ4Lean Hogs CME (Dec 14)Finds support above sideways trading along 85. Edges up to Sept/mid-Oct supply; near the 50 and 200-day MAs.91.275+0.7% 84.05/84.27599/97.3
C Z4Corn CBT (December 14)Renews the s-t uptrend on the break over the Aug high (381).386.25+2.3% 330.5/359458.75/395.75
O Z4Oats CBT (December 14)Fall from the 'Peak' KDR of 24 Oct slows.338.75+0.2% 326372.5/348.5
IJG5Rapeseed LIFFE (February 15)S-t range forms between the overbought Oct high and 50-day MA.337.25-0.1% 323.5/332.25363/349
S F5Soybeans CBT (January 15)S-t rally finds intraday resistance at the 200-day MA, but remains above uptrend support at the 50-day MA.1053.5+0.5% 912.25/995.251126.5
SMZ4Soybean Meal CBT (December 2014)Failed break over the May peak. Potential 'bull trap'.393.5-0.4% 295.1/364417.6
BOZ4Soybean Oil CBT (December 2014)'Bull trap' reaction probes support at the prior base lows.32.07-0.5% 31.5237.36/34.95
W Z4Wheat CBT (December 2014)Extends the recovery into the Jul/early-Sept supply zone.553.75+2.0% 466.25/510.5591/579.25
QKF5Wheat LIFFE (January 2015)Renews the recovery.125.85+1.1% 113.75/119.25127.45
CCZ4Cocoa NYBOT (December 2014)Decline from the Sept peak is becoming oversold.2798-1.9% 26753208/2953
KCZ4Coffee NYBOT (December 2014)Developing support near the 200-day MA and Sept trough.188.75+2.4% 163.1/176.4225.5/193.85
CTZ4Cotton (December 2014)Breaks the Sept floor (60.83) falling to a new contract low.59.73-3.6% /68.48/66.05
LBF5Lumber CME (January 2015)Reasserts the s-t decline. Top heavy.323.5+0.3% 305/318.5340.3/331
JOF5Orange Juice (January 2015)The oversold fall pauses.128.6+1.4% 115.35/121.35146.8/142.4
SBH5Sugar NYBOT (March 2015)'Bear trap' recovery slows by the 50-day MA.16.01-2.1% 15.4217.2/16.44

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