GIT YOUR COFFEE AND GIT THEM STEERS…BONDS ARE DOWN AND STOCKS ARE HERE
Be advised that all my comments are my OPINION and that OPINION is based on my long term in-house model that I dubbed LAWG 647. The prices I use in my model are week ending prices, usually Friday.BTW, trading commodities is risky and not meant for those that faint at the sight of blood.
MAY 11, 2020
There are a number of commodities that are strongly positioned to reverse their present trend over the next several weeks. Of those commodities there are a number also in RED ALERT status.
Just an FYI, a commodity gains RED ALERT status when the Positive Indicator and Negative Indicator converge and meet. A potential trend change occurs when the Model indicates the price needed to reverse a trend on the upcoming Friday settlement is very close to the previous Friday settlement. One can have RED ALERT status and not be close to trend reversals. One can be close to trend reversals and not have RED ALERT status. Presently there are a number of commodities that are close to a trend change but not in RED ALERT status. Achieving RED ALERT is special in my opinion because it suggests there is an increased chance for a dynamic move, one way or the other. How quickly may that dynamic move occur? Usually with the week, but it may take several weeks. Let’s look at those that have achieved both an increased possibility of a trend change and have achieved RED ALERT status.
August Feeder Cattle: Trend is lower need a close at or above $138.50 on Friday, they closed Friday, May 8 at $136.95. If fails to close at or above $138.50 on Friday, May 15, will need a close at or above $121.75 on May 22. Both the indicators are within the first standard deviation long term average. In my opinion the likelihood of a trend change in near term is high.
July Coffee: Trend is lower need a close at or above $113.30 on Friday, closed Friday, May 8 at $111.65. If fails to close at or above $111.65 on Friday, May 15, will need a close at or above $110.445 on May 22. Both the indicators are within the first standard deviation long term average. In my opinion the likelihood of a trend change in near term is iffy.
June 30 Year Bonds: Trend is higher need a close at or below 178.14 on Friday, closed Friday, May 8 at 179.22. If fails to close at or below 178.14 on Friday, May 15, will need a close at or below 176.21 on May 22. Both the indicators are within the first standard deviation long term average. In my opinion the likelihood of a trend change in near term is iffy.
June E-Mini S&P’s: Trend is lower need close at or above 2953.75 on Friday, closed Friday, May 8 at 2928.50. If fails to close at or above 2953.70 on Friday, May 15, will need a close at or above 2684 on May 22. Both the indicators are within the first standard deviation long term average. In my opinion the likelihood of a trend change in near term is high.
If you have a commodity you would like me examine feel free to drop me a quick e-mail atlee@efggrp.com, I will do my best to accommodate.
My name is Lee Gaus and if you would like to see more of our thoughts go to our website ifgfutures.com. There you will also find articles written by my partners Tom Fritz, Steve Erdman. If you have any questions you can reach me at 1-877-304-1369, 312-384-1166, or email me atlleegaus@efggrp.com.
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.