It was another day of solid gains for equity markets yesterday, with the NQ E-mini leading the way higher, and closing with a wide spread up candle ending the session at 4094, just shy of the psychological 4100 price level which was missed by o.25 of a point!
The recent rally for soft commodities appears to have stalled once again last week, as improving weather conditions across the US mid West allowed harvesting to get back on track with the forecast for a record crop now back in focus.
Let me start this analysis for oil, by highlighting an issue which I always find deeply ironic which is this – when oil prices rise quickly, a hue and cry results with the ‘evil’ speculators blamed who quickly become public enemy number one.
With many of the major trading centres closed yesterday for public holidays, and with little in the way of meaningful fundamental news to drive price action, trading volumes in currency futures remained thin, with the Aussie dollar, the British Pound, the Canadian dollar and the Euro, all consolidating further following the volatile price action of last week.
Last week’s price action for the Ag commodities (DBA, quote), could best be described as a pause, following the long decline of the last few months, as the primary markets of corn, soybean and wheat, finally found some support, moving sideways but with a mildly bullish tone.
Yesterday’s trading session for commodities was an interesting one to say the least, with oil prices slumping, gold prices whipsawing, and silver prices breaking lower with momentum, as the bears continue to maintain a vice like grip on the market.
It’s been a month of congestion and consolidation for crude oil prices, with the commodity driven by a variety of forces, but as we approach the start of October, the market now appears to be building some momentum in preparation of an imminent breakout. However, much will depend on the deep areas of price resistance now directly ahead.
It was another week of falling prices for soft commodities (DBA, quote) once more, as over supply issues continue to dominate across all the major markets, and clearly evident from the weekly charts. It is the US which sets the price for world markets as the largest exporter, with the US Midwest corn belt set to produce a record harvest for a second year.
September’s been an interesting month of price action for oil traders, as the WTI contract (USO, quote) continues to bounce around, driven back and forth by a variety of forces as it continues to consolidate in a narrow range.
As always, whenever there is a market correction, and for whatever reason, the bears take heart, emerging from the undergrowth to call the top of the market once more!
