Commodity Wrap: No Bottom in Sight for Natural Gas

After a long weekend the markets are back to normal trading hours. Crude finished just shy of 2% higher but did not retake the 9 day MA; in March at $101.25. I have advised the sidelines thinking we remain in the $10 range and do no wish to establish a position being we started the day near the middle of the range. Multi-year lows in natural gas with prices down near 7% yesterday.

This makes it five losing sessions in a  row with no bottom in site. Equities inched higher as the 9 day MA continued to support. Use that level as your pivot point; in the March Dow at 12370 and the S&P at 1282. Gold traded above the 40 day MA again yesterday closing just under that mark. I’m expecting a further leg higher and this would be accelerated if the dollar was to back off. I see support at $1635 in February as our upside target remains $1680…trade accordingly.

Support is seen in silver just above $29 in March with an upside target of $32. The big mover yesterday was copper breaking resistance and advancing to four month highs. This was likely from the continued growth out of China. Q4 GDP coming in just under 9% is certainly nothing to sneeze at. The dollar is exhibiting signs of fatigue but I would like to see a settlement below the 20 day MA before getting too committed. That level is 80.90 in the March contract. Trade accordingly.

Aggressive traders could buy the Euro or short the Yen with tight stops. Both trades are a slight forces so I would hold off for confirmation. Cotton closed above the 100 day MA for the first time in seven months…take off all bearish trades at a loss.

For nine sessions Euro-dollars have picked up steam. There will be a time to get short but until we see signs of an interim top let the market work higher. I am still looking for signs of a bottom before reestablishing longs for clients in any of the Ag markets. I believe we have a shot at seeing the December lows challenged, so be patient. Livestock traders could be back long April live cattle and lean hogs with stops just under the 20 day MA. I like the prospect of higher hog prices and the technicals appear a little less risky in my opinion.