Futures Market Blog

COWS (Corn, Oats, Wheat and Soybeans)

The grain and soybean complex markets have separated from the declining stock market. Soybeans found support on some of my indicators and have rallied strongly. My cycle studies and my seasonals studies suggest that significant lows are due in many markets by the end of the first quarter of 2009. A short-term sell signal has developed in spite of the bullish talk and the ongoing rally that is based on weather developments in South America. Seasonal agree with the current rally. Following a possible short-term decline the seasonal odds favor a rally. SEE THE SEASONAL CHART BELOW. See charts below.

Soybean Complex: I warned you of the bearish trends and potentially large corrections before they started. The corrections came. I also advised you that short-term buy triggers have developed. Soybeans gave me a trigger to go long but with HUGE volatility. I emphasize the “high risk” aspect of all grain and soybean market trades. Await recommendations. Seasonals in the cash soybean market are now ideally bullish.

Corn: Prior to the current declines I pointed out that my COT analysis had turned bearish. Seasonal lows were due and may well have been made on bullish momentum divergence signals. I believe that corn prices now have the potential to make a very large recovery, perhaps to as high as intermediate term resistance areas. Await intermediate term buy recommendations via the hotline.

Wheat: I advised you “the short term trend may bottom within days, while weekly the trend remains bearish”. We saw signs of bullish life in the form of a huge recovery. There were short-term buy signals. Await wheat spread recommendations. As in all the grain and soy complex markets, the swings in wheat will continue to be large and wild. Seasonal is ideally bearish. .

Oats: The market remains short term bearish. The intermediate-term uptrend remains bullish. The decline has taken prices down to important support. There were short-term MOMENTUM divergence buy signals but no MAC signals as yet. See chart below.

Take a look at the long term RATIO CHART for SOYBEANS vs. CORN…the perspective is amazing!

IMPORTANT REMINDER: ALL RECOMMENDATONS GIVEN VIA THE HOTLINE WILL REQUIRE LARGE STOP LOSSES DUE TO ONGOING MARKET VOLATILITY. THERE HAS NEVER BEEN A TIME AS VOLATILE AS THIS – YOU WILL LOSE MONEY IF YOU USE SMALL STOPS. IF YOU CAN’T AFFORD THE POTENTIAL RISK THEN DON’T TRADE!

Meats

Cattle and Hogs: My analysis of the COT Commercials positions in both markets continues to project a LONG TERM bull move in both of the meats. A trigger is needed to spark the rallies. I REMAIN BULLISH BUT I AM WAITING FOR TRIGGERS. I believe that the current decline in hogs is another test of my bullish LONG TERM forecast as well as an important test of long term technical support. NOTE THAT IN THE ABSENCE OF BUY TRIGGERS THERE ARE NO RECOMMENDATIONS. The hotline recommended long Jun and short April hogs spread that should have been closed out when it reached its profit target. I plan to once again recommend this spread when and if it declines to short term support. The spread should continue to be valid until late May if history repeats. See seasonal table below.

Metals

Copper: Thin volume and erratic price moves make this a difficult market to trade other than for the long term. Therefore, I will not be giving specific hotline recommendations. The trend remains short term and intermediate term bearish BUT seasonal lows are ideally due now. We could get a significant short-term rally in copper (and all metals). Copper tends to make highs in March. There is bullish divergence. The coming rally could be HUGE! See seasonal chart.

Gold and Silver: Gold seasonals achieved their projected seasonal rally targets and you should have gotten out of longs as recommended. My longer term forecast based on the long term cycles and technical indicators currently suggests a $2000+ target once the current decline and cycle low are in place.

See silver seasonal chart at left. Silver triggered a short term buy as did gold but long-term buy signals are pending. I advise waiting until the first few months of 2009 before taking on long term buy (investment)
positions.

Platinum/Palladium: My long-term forecasts for platinum and palladium have been bullish and I am still long term bullish in spite of the recent corrections down which were discussed in this newsletter well in advance. This overdue correction has brought prices back to rational levels and I believe that new buy triggers will develop soon.

I believe that over the next 12 months we could witness considerable turnarounds in platinum and palladium prices and I want to maintain long-term holdings in PAL.

The severe corrective declines were long overdue and are, in my view, a positive development in the long-term picture. There are signs of bullish life in platinum and in palladium. I recommend holding on to long term positions, in palladium which may take time to move higher but which, I feel, has significant upside potential. I am holding my personal long-term positions in PAL (North American Palladium). There are initial indications of a short term low in PAL.