COFFEE, CORN, HOGS, SILVER, GOLD, E-MINI S&P
June 24, 2019
A hearty good Monday to you and hopefully it will be a good week for all. Normally I do not cover quite so many commodities in one letter but these are strange times. Consequently the comments will be somewhat abbreviated for each commodity. If you have any questions you can email me at lee@efggrp.com, or call me at 1-877-304-1369.
Coffee: I have written about Coffee for more than several weeks now and want to follow up. September Coffee according to our in-house model remains in an uptrend and will need a close this Friday at or below $95.40 to turn bearish. Three weeks ago our in-house model showed that Coffee was overstretched when the positive indicator went to four standard deviations above the 197 week average. Since then Coffee has corrected that imbalance and now both Positive and Negative indicators of our in-house model are within the first standard deviations of the 200 week average. My suggestion is to look for levels to buy while keeping in mind the weekly reversal point mentioned above.
Corn: According to our in-house model December Corn is in a confirmed uptrend. It will take a close at or below $3.86 ¼ this Friday to reverse the trend to bearish. Four weeks ago the positive indicator for Corn was over six standard deviations above the 197 week average. Three weeks ago Corn backed off and the positive indicator finished just below three standard deviations above the 198 week average. Two weeks ago Corn rallied once again and finished the week just over five standard deviations of the 199 week average. Friday last Corn once again readjusted and finished just below three standard deviations above the 200 week average. Given that Corn has not yet totally rebalanced the positive indicator makes me hesitant to buy until rebalancing takes place. While I do believe underlying factors will eventually push Corn higher my preference is to wait for the rally and get corn over extended again above the 5th standard deviations of our in-house model and look to sell.
HOGS: Well the question here is how low is too low? We know that Hogs are in a confirmed downtrend. We know that it will take a close at or above $109.75 to reverse the trend. We also know that as the close Friday last the negative indicator was over four standard deviations above the 200 week average. This puts August Hogs in positive equivalency which suggests low may well be low enough. I suggest looking for somewhat lower levels to buy and use point of pain as a stop loss area.
SILVER: After suffering in a bearish trend for a long while our in-house model shows that Silver finally reversed the trend to bullish on last Friday’s close. That same model tells us it will take a close at or below this Friday of $14.091 to reverse September Silver to bearish. Silver has not used a great deal of energy in reversing the trend as the positive indicator is barely above the first standard deviation of the 200 week average. I am suggesting at one look for levels to buy.
GOLD: Our in-house model has Gold in a confirmed uptrend. Presently our in-house model tells us that as of Friday’s close the positive indicator for August Gold finished above the fourth standard deviation of the 200 week average. As of this writing it has moved to over four and half standard deviations above the 200 week average. Only twice in the past 200 weeks has the positive indicator been above the fourth standard deviation of the weekly average. My suggestion if you want to be long wait for a pull back, otherwise look for a rally and take a whack at a short term counter trend short position.
E-MINI S&P: As of Friday last our in-house model showed the September E-Mini S&P regaining it bullish legs and reversing the trend to higher. That same model tells us that the September E-MINI S&P will need a close this Friday at or below 2644.75 to turn bearish. The September E-MINI S&P did not use a great deal of energy in reversing the trend as the positive indicator is barely above the first standard deviation of the 200 week average. I am suggesting at one look for levels to buy.
My name is Lee Gaus if you have any questions you can reach me at 1-877-304-1369, 312-384-1166, or email me at lee@efggrp.com. If there is a commodity you would like me to address shoot me an email.
There is significant risk involved in trading futures and/or options on futures. Futures and/or options of futures trading may not be suitable for all investors. Investors should consider these risks and evaluate their suitability based on their financial conditions. Past performance is not indicative of future results.