September 14, 2018

Volume 12, Issue 37

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Metals - Gold

Can Gold Get Back to Bullish Trend?

Nicholas DeGeorge

In the early morning trade, October gold is currently in the red slightly and trading at $1,202.1 and down $6 from the over night high. One of the reasons gold has come down form its yesterday and overnight highs is that the U.S. dollar tested its August lows. Yesterday, the weaker than expected CPI number put pressure on the Feds to tamper down their rate hikes in 2019 and possibly even in December; therefore, caused US dollars to selloff and gave support to gold. However, gold could not hold its August 28th high of $1,215.7, so unless it gets above that level today you could see some profit taking from the bulls.

If you look at the daily October gold chart, you’ll see that it’s trying to put in a firm bottom and has even broke above a short-term bearish trendline. However, it has yet to get above and hold the August 28th high, as stated above, and it still below its 50-day moving average. Gold is still in bearish trend, but if it breaks above the August 28th high, you can then see a rally up to about $1,230.0 an ounce before any major resistance.

If you have any questions or would like to discuss the markets further, please feel free to contact me at 800-453-4494 or >ndegeorge@rjofutures.com.

  Gold Oct '18 Daily Chart

Gold Oct '18 Daily Chart

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Metals - Copper

Copper Stuck in a Range

Phillip Streible

With all the rhetoric between China-U.S. trade talks, it seems the market has been indecisive of what direction it wants to take since mid August, with prices staying in a range from a high of 2.7455 to a low of 2.5520.  On Thursday, Beijing, being the world's largest commodity consumer, announced it would welcome the opportunity to renew trade talks with the U.S. This may lend some support for copper and other metals, as we have recently broken a downward trendline with a strong rally on Wednesday. If prices hold up above the 2.66 area, it may be a good level to bounce from. Also, with Thursday's close of 2.6765, we have support at 2.62 and expect a move towards 2.74-2.75 level which is where we have resistance on this bullish bias in the near to medium term.

If you have any questions or would like to discuss the markets further, please feel free to contact me at 800-438-4805 or pstreible@rjofutures.com.

Copper Dec '18 Daily Chart

Copper Dec '18 Daily Chart

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Energies - Crude Oil

Oil Volatility Aided by Florence

Michael O'Donnell

The oil market this week has been largely affected by the forecast for Florence as the market was strong with anticipation for a category 4 hurricane which could affect pipelines and supply and demand.  The weekly EIA report Wednesday morning also showed a draw of 5.3 million barrels.

While anticipation of a category 5 hurricane coincided with the high of the week in the October contract Wednesday morning, since the storm is now a category 2 the market is down $1.75 as of Wednesday morning and making new lows of this writing at 9:30 AM central time.

This week’s price action and market participation offer a lesson in market reaction to weather concerns, as the fear and greed correlated with weather as well as supply and demand concerns may be overdone and subject to change with a changing forecast.

Also, for spread traders, moves between Brent and WTI as well as calendar spreads among different expirations offer a number of market relationships to monitor.

As noted previously, the market seems to sustain its uptrend while testing overheard resistance around the $71.30 level while channeling amid this level and trendline support. Supply concerns from Iran sanctions and Venezuela are typically countered with record U.S. output and announcements from Russia, Saudi Arabia and other oil producing nations to counter any lost production.

If you have any questions or would like to discuss the markets further, please feel free to contact me at 800-367-7290 or modonnell@rjofutures.com.

Oil Oct '18 Daily Chart

 Oil Oct '18 Daily Chart

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Energies - Natural Gas

November Natural Gas Trending Down

Jeff Ratajczak

The general trend today, is down. Three days of lower high’s and lower low’s put the ball firmly in the bear camp’s court.  Trade has been range bound between $2.760 and $2.900 this week. Short term moving averages are headed south along with momentum indicators signaling a move lower, or to lower trading range. There isn’t any divergence between momentum and prices, so a move in the same direction is in the cards. Support comes in around $2.760 ad close below that level can signal a move lower. Closing above $2.873 will be needed to change the trend to neutral to up.   

Storage numbers came in a little higher than called for at 69 bcf compered to estimates of a 65 bcf injection. Hurricane Florence coming ashore may increase the need for power but not yet. We’ll just have to sit and wait it out. The storm has been down graded to a category 1 as it hits land but, major damage has been reported.  Up to 400k people have been reported without power. The storm’s track will take it thru many states and possibly back to the ocean where it will gain more force. Trade to the down side should continue and I’m looking for prices to slow down near support. By then we’ll have a better handle on the cost of energy caused by Florence.

If you have any questions or would like to discuss the markets further, please feel free to contact me at 888-874-8110 or jratajczak@rjofutures.com.

Natural Gas Nov '18 Daily Chart

Natural Gas Nov '18 Daily Chart

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Softs - Cocoa

Lack of Demand in Cocoa Leads to Consolidation on the Futures Chart

Peter Mooses

The December cocoa contract continues to try to find its way but cannot gain traction in either direction. The supply concerns are not strong enough to overpower the lack of global demand for the soft. With wet, damp conditions in key growing regions and the concern of black-pod disease on the rise – which should lead to higher prices, trading ranges continue to tighten. Volatility in emerging markets are also hurting cocoa and adding to the risky sentiment felt in futures.

Technically, a close above the 9-day moving average, continued closes above 2350, mixed in with short-rally’s in the pound and euro – cocoa could be in line for a recovery and new trading range. Until we know if grindings will hit records we won’t know the longer-term trend for the market. Traders are taking a wait and see approach as we are heading into the last quarter of the year.

If you have any questions or would like to discuss the markets further, please feel free to contact me at 800-826-4124 or pmooses@rjofutures.com.

Cocoa Dec '18 Daily Chart

Cocoa Dec '18 Daily Chart

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Softs - Coffee

December Coffee Continues Downwards

Adam Tuiaana

Fundamentals still seem to be the major driver to keep pressure on coffee prices. We have seen a nice pullback and consolidation, but weakness is still underway. Traders still say that September coffee is oversold, and it looks to be trading sideways for the time being. The Hightower Group has reported “record harvest just finishing in Brazil” and also “the market faces a record Vietnamese harvest just ahead.” It will take serious supply demand changes from the norm to spark any significant recovery in coffee prices.

On the technical side, coffee seems to be holding support at 100, and reached sub 99 levels this past week. For now, we’ll continue to hold a bearish outlook but hold off on new positions until we see a violation of 9865 (with subsequent pullback after that). Consider using put options to manage risk effectively.

If you have any questions or would like to discuss the markets further, please feel free to contact me at 866-536-8601 or atuiaana@rjofutures.com.

Coffee Dec '18 Daily Chart

Coffee Dec '18 Daily Chart

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Agriculture - Grain

Daily Market Update - Grain Futures - 09/14/2018

Stephen Davis

RJO Futures Senior Market Strategist Stephen Davis discusses the grain futures markets.  If you have any questions or would like to discuss the markets further, please feel free to contact me at 800-367-7181 or sdavis@rjofutures.com.

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Currencies - U.S. Dollar

Dollar Needs Positive CPI Result to Regain Upside Momentum

Tony Cholly

The dollar has found its footing this morning, but has stayed within a tight range in close proximity to Wednesday’s monthly low.  Brainard commented that gradual US rate hikes are appropriate for near future, provided some measure of support that implies more rate hikes than the market has priced in.  Positive trade talks between China/US and Canada/US has been the major cause of headwinds, but a surprisingly large decline in the PPI also weighed heavily on the USD.  This will put a lot of emphasis on this morning’s CPI reading to see if US inflation expectations need to be dialed back.  Turkeys central bank meeting that resulted in a 6.25% rate hike could be a wild card factor that pressures the dollar.  Resistance comes in at 9470 and 9510, support comes in at 9400 and 9390.

If you have any questions or would like to discuss the markets further, please feel free to contact me at 800-826-2270 or tcholly@rjofutures.com.

U.S. Dollar Index Sep '18 Daily Chart

U.S. Dollar Index Sep '18 Daily Chart

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Equities

Stocks Slightly Higher To Kick Off Session

Bill Dixon

The indices are all slightly positive this morning following the opening bell. Retail sales came out weak this morning (Only 0.1% vs 0.4% exp), but July’s numbers were revised higher (0.7% up from 0.5%), which offset the bulk of the miss. The majority of the weakness in the August data can be attributed to misses in the auto and retail sectors. Import Prices came in weaker than expected (-0.6% vs -0.1% exp). The stronger dollar obviously played a role in the numbers, but most of it can be credited to a selloff in crude oil prices. Industrial Production came in right in line at 0.4%.  Consumer Sentiment and Business Inventories will be released shortly. Next week’s news slate is fairly light, but it will feature a good deal of housing numbers. 

December mini S&P futures hit the all-time high print earlier in the session before backing off a bit. Without more data this afternoon, I’m not sure we’ll be able to print new highs, but we’ll see what happens. The fact that is even in the conversation given the ongoing tariff situation leads me to believe that we’re not terribly far away from coming to some kind of an agreement there.

If you have any questions or would like to discuss the markets further, please feel free to contact me at 800-669-5342 or bdixon@rjofutures.com.

E-Mini S&P 500 Dec '18 Daily Chart

E-mini S&P Dec '18 Daily Chart

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