Crude oil made a fresh new 6 week low today at 72.75. A trade down to 72.15 should be a chance to cover another 1/3 of shorts, moving the buy stop on the remaining packaged lower. If 72.00 does not hold, next support is the 14th month low at posted on 5/24/10 down at 70.35. Looking at the longer term chart, if we find support here at the 72.65 level, we could be ready for a rally back. If these lows hold, I like an upside target at 76.75 and then 78.00.
In the grains, I like the long position we have after the recent 50% retracement we had in the wheat. It still remains to be seen, (we will find out this week) exactly what the corn intends for us. We continued to settle above the 4.30 level in new corn, CZ. However, if the funds fail to get fresh confirmation of their monster bullish position (+360K contracts as of today)… Then a down side correction could be violent.
I still like being long, because technically after last week’s good settlement, it looks good on the charts. The funds think so too. Let’s hope that things stay that way. If the funds can wrestle another 30 cents to the upside, we could have the commercials getting forced out of their shorts.
A classic market opportunity. As for the beans, new crop beans remain above the key 10.00 level. A quick down draft may be in store, however, if sell stops below that key level are triggered in the next few sessions by weak/ and or nervous longs.
As for the Dow cash, we are only 175 points away from a 10,000 print. I can’t imagine if the bears get a hold of this market for a bit, they won’t try to run it down there just for the print. Bottom line, I think we are too close to 10,000 NOT to spike down and see what’s there.
Like always, however, we have to use our stops to manage the trade.
Good Trading
Good Trading
