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A
Market Review and Opinion Report by MoundReport.com's
Head Analyst James Mound
For the Week Ending January 29th,
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.
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more detailed currency analysis please subscribe to my newest premium service –
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directional trend analysis on over a dozen currencies as well as market
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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
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