A Market Review and Opinion Report by MoundReport.com's Head Analyst James Mound

For the Week Ending January 29^th, 2012

Energies

Crude oil continues to show declining volatility while channeling.  Look for March to break and close below 97.40 to indicate a failure.  Natural gas may have long term bottomed, but I would wait for the highs of this move to get taken out before being completely sold on the turn. 

Financials

Stocks are choppy near the highs, holding on despite a less than enthusiastic FOMC meeting.  The employment report remains a focal point as the market should see selling pressure ahead of Friday’s announcement.  Bonds are worth a look for some call buying after premiums have dropped off due to a near comatose 3 month trading channel.  The euro looks incredibly strong on a daily chart but I would discourage you from getting suckered in here – this market is a strong sell.  The U.S. dollar is on monthly trendline support and is a buy here, likely to pressure European currencies along with the Australian dollar.  The Japanese yen is ready for takeoff after a decent price surge and momentum on its side.  Look for a breakout in February as the yen remains a buy and I continue to stand by my forecast that:

The Japanese Yen futures will hit 140 before it hits 80 or I will quit writing the Weekend Commodities Review...forever.

For more detailed currency analysis please subscribe to my newest premium service – Mound Currency Signals, currently on a new release special pricing promotion of 70% off the regular price, a full year of currency analysis, for just $297 and available at that price only by phone by calling Futures Press at 1-800-963-1561 (int’l 1-386-597-1004), M-F 9am-4pm ET.  In the report I provide weekly and long term directional trend analysis on over a dozen currencies as well as market commentary and a global economic calendar.  It is setup to help both futures and FOREX traders as well as anyone using currencies to hedge investments.

Grains

Repeat from last week: This is setup time in grains as the market positions ahead of plantings, over-evaluating carryover inventories and droughts in South America while ignoring the exposure the market has to a U.S. dollar rally and collapse of several European demand-heavy economies.  Short beans and corn with puts, and spread long wheat against short corn. 

Meats

Cattle looks bullish on a daily, weekly and monthly chart – but I’m all in short here with straight puts.  Hogs are choppy and going nowhere fast.

Metals

Short gold and silver this week with bear put spreads.  Copper is right up on my anticipated resistance area at 3.95 and is a short here.

Softs

Coffee is right up on key support and I suspect that any lower close would signal a clear break in the market.  I suspect coffee could plunge 20% in a matter of 2-3 months.  Cocoa has been rising steadily and may have established a short term bottom, but I see upside as limited and look to accumulate puts near current levels.  Cotton is also a short, along with sugar.  The softs sector is very exposed to a rally in the U.S. dollar and concerns over weakness in the global economy.  OJ is still avoidable but perhaps the thing that makes this market go the way of pork bellies is an out of control rally. 

Past performance is not indicative of future results.

Charts courtesy of Gecko Software's TracknTrade

Disclaimer:  Trading in futures and options involves a substantial degree of a risk of loss and is not suitable for all investors. Past performance is not indicative of future results. Fundamental factors, seasonal and weather trends, daily news, and other current events may have already been factored into the markets. Comm

odities trading can be extremely risky and is not for everyone.  Some trading strategies have unlimited risk.  Educate yourself on the risks and rewards of such investing prior to trading.  Futures Press Inc., the publisher, and/or its affiliates, staff or anyone associated with Futures Press, Inc. or www.moundreport.com, do not guarantee profits or pre-determined loss points, and are not held monetarily responsible for the trading losses of others (subscribers or otherwise).  Information provided is compiled by sources believed to be reliable.  Futures Press, Inc., and/or its principals, assume no responsibility for any errors or omissions as the information may not be complete or events may have been canceled or rescheduled.  Any copy, reprint, broadcast or distribution of this report of any kind is prohibited without the expressed written consent of Futures Press, Inc.

A Market Review and Opinion Report by MoundReport.com's Head Analyst James Mound

For the Week Ending January 22^nd, 2012

Energies

Crude oil remained choppy over the past two weeks despite a breakout bull run in the stock market and the threat of heated up Iranian-U.S. tensions.  Crude, heat and rbob are recommended short plays using defined risk option strategies only – wouldn’t want to get caught with your pants down exposed short if WWIII breaks out if you know what I mean.  Natural gas is a strong contrarian buy.  Spreading long natty against short crude is worth another look as that spread should tighten in the coming weeks.

Financials

The stock market continues to breakout after fulfilling a bullish Mound Ladle Formation^tm but has likely run out of steam, and I expect a retracement early this week.  The euro should selloff dramatically with it, possibly in reaction to Wednesday’s potentially Greenspan-like irrational exuberance statement out of the FOMC meeting.  However the Fed is far from the main fundamental influence on stocks, currencies and commodities these days – Europe is leading the path to self-destruction and the ebb and flow of the cancerous structure known as the euro is what is moving the financial markets.  Keep a close eye on the Mexican peso after it made a major bull move so far this month, approaching critical resistance at .07665 that should dictate the long term trend in this market.  The yen remains a buy and I continue to stand by my forecast that:

The Japanese Yen futures will hit 140 before it hits 80 or I will quit writing the Weekend Commodities Review...forever.

For more detailed currency analysis please subscribe to my newest premium service – Mound Currency Signals, currently on a new release special pricing promotion of 70% off the regular price, a full year of currency analysis, for just $297 and available at that price only by phone by calling Futures Press at 1-800-963-1561 (int’l 1-386-597-1004), M-F 9am-4pm ET.  In the report I provide weekly and long term directional trend analysis on over a dozen currencies as well as market commentary and a global economic calendar.  It is setup to help both futures and FOREX traders as well as anyone using currencies to hedge investments.

Grains

This is setup time in grains as the market positions ahead of plantings, over-evaluating carryover inventories and droughts in South America while ignoring the exposure the market has to a U.S. dollar rally and collapse of several European demand-heavy economies.  Short beans and corn with puts, and spread long wheat against short corn.  Rice is a strong short here.

Meats

Cattle spiked to critical resistance, penetrating intraday Friday, only to close below and look awfully bearish closing in the lower 20% of the breakout daily bar.  Also it brushed up near prior technical resistance at 126 and failed.  This is a critical week for reversing this recent surge with some downside volatility, but I continue to recommend straight deep out of the money put acquisition on this bounce.  Hogs are in a congesting pattern with a slight bullish note, but I wouldn’t touch it – short if you must, but avoiding hogs altogether is recommended.

Metals

A sustained rally in gold and silver has lacked the strength needed to change bearish longer term momentum.  Copper broke out on the perception that China GDP growth is contained, after the lowest GDP growth in 10 quarters, and the tight monetary policy attitude might come to an end.  This should in theory help push demand to test the already low inventories, however look for copper to top out below 3.95.

Softs

Coffee is a strong short after failing on its recent rally attempt.  The market is in a sustained sideways pattern, but looking longer term on a chart it is obvious the market is attempting to descend from epic high prices.  Cocoa remains a short on bounces.  Cotton should channel here or reverse the recent rally sparked by weather concerns.  OJ is skyrocketing to historic levels as the FDA continues to test imports from supply leader Brazil for fungicide – get out of the way or actually just avoid trading this thin market altogether.  Sugar remains a short with a straight July put play.

Past performance is not indicative of future results.

Charts courtesy of Gecko Software's TracknTrade

Disclaimer:  Trading in futures and options involves a substantial degree of a risk of loss and is not suitable for all investors. Past performance is not indicative of future results. Fundamental factors, seasonal and weather trends, daily news, and other current events may have already been factored into the markets. Comm

odities trading can be extremely risky and is not for everyone.  Some trading strategies have unlimited risk.  Educate yourself on the risks and rewards of such investing prior to trading.  Futures Press Inc., the publisher, and/or its affiliates, staff or anyone associated with Futures Press, Inc. or www.moundreport.com, do not guarantee profits or pre-determined loss points, and are not held monetarily responsible for the trading losses of others (subscribers or otherwise).  Information provided is compiled by sources believed to be reliable.  Futures Press, Inc., and/or its principals, assume no responsibility for any errors or omissions as the information may not be complete or events may have been canceled or rescheduled.  Any copy, reprint, broadcast or distribution of this report of any kind is prohibited without the expressed written consent of Futures Press, Inc.

A Market Review and Opinion Report by MoundReport.com's Head Analyst James Mound

For the Week Ending January 8^th, 2012

WAKE UP CALL

General Comments

Folks, apparently it is time for a big fat WAKE UP CALL for most investors out there, not surprising on the heels of a Santa Claus rally in the stock market and a bullish start to the New Year.  Things are pretty much setting up according to plan, but only a true contrarian can jump into the raging rapids going against the tide.  That is exactly what I am going to suggest you do, as it is a perfect storm setup for the beginning of 2012 and I am predicting a major selloff in stocks and commodities starting….NOW.

Energies

Crude oil is fast approaching critical long term topside resistance, which lies in a $2 range near the highs of 2011 under $115/barrel, with the resistance band between $114-$116.  An ultimate Fib resistance point at $120 should hold as a major trend indicator.  Regardless of topside resistance the crude oil market broke out of near term resistance last week, breaking above what appeared to be a down sloping trend line at $103.  It fits perfectly that crude oil would penetrate thru that weak resistance and create a suckers’ rally to coincide with the recent breakout in the S&P500, as both markets’ correlation have been trading in relative tandem for some time.  I recommend bear put spreads in crude or perhaps something more aggressive on a short term time frame like a ratio put backspread.  Natural gas remains a long term call buying opportunity to play upside volatility.

Financials

The S&P500 likely completed a bullish Mound Ladle Formation^tm and based on that it is setup to see strong downside starting sometime this week or early next week.  The timing of a reversal off a MLF can be tricky as two scenarios typically unfold – an immediate sharp reversal or slightly uptrending channel which can last several weeks, both of which should ultimately result in strong selling.  That being said the fundamental influences – the EU, U.S. dollar and correlated commodity prices – all suggest a greater likelihood of near term volatility and therefore an immediate selloff scenario is believed to be more likely.  The dollar has rebounded nicely from a minor retracement and this week’s Fed speak, earnings reports and possible credit downgrades in the euro zone should all prove dollar bullish.  The yen remains a buy and I continue to stand by my forecast that:

The Japanese Yen futures will hit 140 before it hits 80 or I will quit writing the Weekend Commodities Review...forever.

For more detailed currency analysis please subscribe to my newest premium service – Mound Currency Signals, currently on a new release special pricing promotion of 70% off the regular price, a full year of currency analysis, for just $297 and available at that price only by phone by calling Futures Press at 1-800-963-1561 (int’l 1-386-597-1004), M-F 9am-4pm ET.  In the report I provide weekly and long term directional trend analysis on over a dozen currencies as well as market commentary and a global economic calendar.  It is setup to help both futures and FOREX traders as well as anyone using currencies to hedge investments.

Grains

A solid rally in grains correlated to the general stock and commodities rally over the past few weeks, but lacks momentum for further upside.  I recommend put plays in beans and corn, with a spread trade of long wheat against short corn on the futures side.  Rice remains a bear market with puts recommended. 

Meats

Cattle surged a couple of weeks ago, only to set a strong top and setup an epic failure.  I highly recommend shorting on bounces and developing put strategies if you haven’t done so already.  Feb cattle should remain well below critical resistance under 125.  Hogs are congesting, or seemingly just taking a breather from the heavy selling, and I suspect more downside is forthcoming.

Past performance is not indicative of future results.

Charts courtesy of Gecko Software's TracknTrade

Metals

Gold rebounded to set a nice near term double top and bearish head and shoulders.  Overall both gold and silver have a longer term choppy downtrending price action.  Copper is a strong short long term. 

Softs

Coffee is lulling traders to sleep, but at these lofty prices I would not anticipate the choppy downtrend to persist much longer – heavy selling should be expected, with either a long strangle or just straight deep out of the money puts recommended.  Cocoa downside target is 30% lower, so needless to say sell the bounces.  Cotton is avoidable, albeit bearish.  OJ and sugar both remain sells in a softs sector that has little reason to be bullish at these high prices amid a strengthening U.S. dollar and questionable global economy hurting demand.    

Disclaimer:  Trading in futures and options involves a substantial degree of a risk of loss and is not suitable for all investors. Past performance is not indicative of future results. Fundamental factors, seasonal and weather trends, daily news, and other current events may have already been factored into the markets. Commodities trading can be extremely risky and is not for everyone.  Some trading strategies have unlimited risk.  Educate yourself on the risks and rewards of such investing prior to trading.  Futures Press Inc., the publisher, and/or its affiliates, staff or anyone associated with Futures Press, Inc. or www.moundreport.com, do not guarantee profits or pre-determined loss points, and are not held monetarily responsible for the trading losses of others (subscribers or otherwise).  Information provided is compiled by sources believed to be reliable.  Futures Press, Inc., and/or its principals, assume no responsibility for any errors or omissions as the information may not be complete or events may have been canceled or rescheduled.  Any copy, reprint, broadcast or distribution of this report of any kind is prohibited without the expressed written consent of Futures Press, Inc.