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Commodities Daily Hotline
10 November 2014                             By Cornelia Dichio, Analyst
Chart of the day: Rebound by Gold...

 

The Gold instrument reversed its oversold decline in a dramatic fashion on Friday.  Jumping up from a new contract low, 1130.4, the price appears capable of a further recovery over the near term. 

We would point out that the October low at 1183.3 does have the capacity to convert into a barrier.  Otherwise, the important chart resistance is the sideways area along 1250.

 

Daily Comment:

 

Also in the Precious Metals sector, the Palladium contract has recorded a 2.7% gain for Friday's session.  The price has stabilized within the trading band forming beneath resistance at the early-October high at 812.75.  Note that that barrier is reinforced by the presence of both the 50 and 200-day moving averages.  We watch to buy in the event of a breakout (see also hotline for 3 November), as this would complete a base. 

In the Energy grouping, Coal's recovery from a deeply oversold position is in the process of being retraced.  Resistance was encountered at 53.25 recently; beneath the downtrend channel as delineated by the 50-day MA.  A move over that level is needed to remove pressure from last month's low at 51.65, which is also the contract low.

In Softs, Lumber has reasserted the short-term decline.  The chart pattern is very top heavy and appears capable of forcing further weakness towards the June floor at 305.  We continue to hold a short trade in the commodity for that scope.

In the Grains sector, Wheat contracts have continued to drift.  The Kansas City Wheat instrument, for instance, shed 1.7% before the weekend.  The price points back to the October low at 550.  That floor must hold in order to keep the basing theory alive.

Also in this grouping, the Soybeans issue could be reasserting its recovery after a brief correction from overbought.  Support appears to have formed near the psychological 1000 level; close to the 50-day MA, recently.  A breach would be required to indicate lasting resistance at the late-October high at 1059.25.

Gainers / Losers
Top 5 Gains.
SymbolStockClose% Change
XAUPHLX Gold & Silver Index69.0376+7.4%
PALLPalladium75.25+3.2%
GOLDSLondon Spot Gold1177.98+3.2%
GLDGold112.97+2.8%
PAZ4Palladium NYME (Dec 14)772.55+2.7%
Top 5 Losses.
SymbolStockClose% Change
JOF5Orange Juice (January 2015)127.5-2.6%
WEATWheat1.05-2.5%
KWZ4Kansas City Wheat (KCB) December 14569.25-1.7%
KO1Palm Oil 1st Mth Continuation2192-1.2%
CAF5Wheat MATIF (January 2015)169-1.2%
 
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 169.1 166.8 -1.36% 156.5
5 Nov 2014 Carbon Emission IPE (Dec 2014) MOZ4 Long 6.65 6.76 +1.65% 6
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 325 322.9 +0.65% 345
4 Nov 2014 Tin HG LME 3 Months LMSNDS03 Short 19575 20230 -3.35% 20600
  • We watch to buy Palladium.

 

Daily Analysis

Symbol Name Comment Close 1 day Support Resistance
CRYCRB Index NYFEPauses the downtrend.270.658+0.6% 260.22280.91/275.411
CLZ4Crude Oil NYME (December 14)Pauses the oversold decline.78.65+0.9% 74.2193.82/84.08
XBZ4Gasoline RBOB NYME (Dec14)Failed break under mid-Oct low (207.76). 'Bear trap' scope towards 220.213.52+0.2% 204.84248.83/220.53
HOZ4Heating Oil NYME (Dec 14)Ranging above the oversold Oct low.249.95+1.7% 241.56272.49
NGZ4Natural Gas NYME (Dec 14)Rally from the oversold 'Trough' KDR of 28 Oct surges to overbought; and supply from this year's earlier top.4.412+0.2% 3.625
QZZ4Coal (Dec 14)Retreats from downtrend resistance at the 50-day MA. Tests the Oct low.52-1.1% 51.6560.02/53.25
GCZ4Gold CMX (Dec 14)Oversold fall reverses from a new contract low.1169.8+2.4% 1130.41297.6/1255.6
PAZ4Palladium NYME (Dec 14)Stabilizes within the range forming beneath resistance at the early-Oct high; near the 50 and 200-day MAs. Potential base?772.55+2.7% 729.95825.45/812.75
PLF5Platinum NYME (January 15)The oversold and accelerated contract low holds.1212.8+1.3% 1186.51350.2/1294.8
SIZ4Silver CMX (December 2014)Pauses the oversold decline at a new contract low.15.714+2.0% 15.0418.885/17.82
LMAHDS03Aluminium HG LME 3mHolds the rally from oversold towards the Aug/Sept ceiling.2055-1.0% 1885/19532184/2119.5
LMCADS03Copper Grade A LME 3mDowntrend flattens above the Apr-Oct floor.6715+0.8% 6321/6513.256992/6835.5
LMPBDS03Lead LME 3 MonthsRanging near the 2013 floor (1938).2036+1.3% 1818/19382120.25/2058
LMNIDS03Nickel LME 3 MonthsDowntrend slows above the oversold 'Trough' KDR of 28 Oct.15425-0.5% 14830/1469016999/16175
LMSNDS03Tin HG LME 3 MonthsPauses the downtrend.20230+1.3% 18809/1900020620/20245
LMZSDS03Zinc Special HG LME 3 MonthsS-t rally from the 200-day MA falters. Top heavy.2245+0.8% 2073.25/21662354/2331
FCF5Feeder Cattle CME (January 2015)Correction from the overbought contract high yields to narrow ranging after the 'Trough' KDR of 16 Oct.232.45+0.8% 216.525/225.75239.3
LCZ4Live Cattle CME (Dec 14)Uptrend slows near the contract high at 170.166.8+0.9% 157.45/161.8/
LHZ4Lean Hogs CME (Dec 14)Holds the s-t downtrend to the Aug low; which is close to sideways trading along 85.88.775+1.3% 84.05/84.27599/97.3/90.65
C Z4Corn CBT (December 14)Overbought rally from the oversold contract low pauses at the Aug high.367.5-1.0% 318.25/330.5395.75/381
O Z4Oats CBT (December 14)Renews the fall from the 'Peak' KDR of 24 Oct, breaking the 'Trough' KDR low of 3 Nov.338.75+0.9% 326372.5/348.5
IJG5Rapeseed LIFFE (February 15)Corrects from overbought rally. Dips back into the prior base.334.5-0.4% 315/323.5363/349
S F5Soybeans CBT (January 15)Possibly reasserting the s-t rally after a brief correction from overbought.1036.75+0.9% 912.25/995.251126.5/1059.25
SMZ4Soybean Meal CBT (December 2014)Overbought rally yields to ranging beneath resistance from the May peak.390.4-0.3% 295.1/364411.4
BOZ4Soybean Oil CBT (December 2014)Dips back into the base. 'Bull trap' reaction towards the pattern lows follows.32.4-0.4% 31.5237.36/34.95
W Z4Wheat CBT (December 2014)Recovery from oversold slows beneath the Jul/early-Sept supply zone.514.5-1.1% 466.25591/579.25
QKF5Wheat LIFFE (January 2015)Overbought rally has paused by the Aug high.119.5-0.4% 109/113.75127.45/126
CCZ4Cocoa NYBOT (December 2014)Breaks sideways support around 2900. RSI low.2889+0.7% 2675/2800?3208/2953
KCZ4Coffee NYBOT (December 2014)Reasserts the correction from overbought. Probes recent intraday support at the 200-day MA.182.4-0.7% 176.4/182.1?243/225.5
CTZ4Cotton (December 2014)Potential base forms above the contract low.63.96+1.2% 60.83/61.9868.48
LBF5Lumber CME (January 2015)Reasserts the s-t decline. Top heavy.322.9-0.9% 305/318.5340.3/331
JOF5Orange Juice (January 2015)Extends the downtrend. RSI oversold.127.5-2.6% 125.9146.8/142.4
SBH5Sugar NYBOT (March 2015)Falls from the 50-day MA to a new contract low.15.69+1.4% /17.2/16.4


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