With today’s fresh 3-month high in the cash dollar index at 78.11, the 50% retracement of the massive down move since last March to November’s lows, is definitely coming into play.
The grains are pretty much ignoring any fundamental news. The story remains the strong dollar, and interestingly the simultaneous bounce in the crude off its lows.
The grains and the gold are feeling the pressure of the 3 month high in the dollar index.
So far today the action is as follows.
SF down 6 cents at 1016 after making a low at 1010. SF posted a high at 1026 on the open for a 16 cent trading range. On the daily charts, I really don’t see good support until about the 1000 level, and if that fails, there’s a band of support down at 984-987.
WH down 1 cent at 517 1/2 with a low at 515. WH posted a high at 522 1/2 on the open, for an 8 cent range. There is support on the daily charts at 511-509. If that fails, we could test the 494 area.
CH down 2 1/2 cents at 394 1/2 with a low at 392. CH posted a high at 400 on the opening, for another 8 cent trading range. Down below, we have decent support at the 384 1/2 to 379 1/2 range.
Look for the 1/2 back moves in all three of these contracts for a day trade today.
On the charts, the grains are shifting to neutral. But with the holiday markets, all the action is suspect. We will have to wait for the first of the year to see if the fund buying will have an affect on these grains.
For now, however, be careful trying to pick new lows. The risk reward is minimal.
In the metals, gold and silver remain under pressure with the higher dollar.
Interestingly though, Jan Crude Oil bounced to a high today almost to the 75 dollar level, with a high tick at 7469. Currently Jan Crude is at 7304.
My advice is to not trade these holiday markets.
CER
