QUICK TAKES
10-14-2019
Be advised there was quite a bit of trend changing activity last week. We know that according to the LAWG 647 MODEL as of the close Friday that December Soybean Meal, December Wheat, December Cotton and December Cattle have all reversed to an uptrend. Additionally a supposed partial trade agreement has been reached where China will once again become aggressive buyers of U.S. Ag products. It is important to note there has not been a public statement from the Chinese side to confirm the statements made by the U.S. delegation. With these types of supposed agreements the devil is always in the details. If the U.S. delegation announcement proves true completed signed agreement is not expected for about five weeks. Let us take a look at several commodities.
SOYBEAN MEAL: According to the LAWG 647 MODEL December Soybean Meal finally joined November Soybeans and went into an uptrend as of the close Friday last. So what do we know? We know that it will take a close at or below $294.90 on Friday the 18th to reverse the trend to bearish. We know that failing to reverse the trend on October 18 it will become increasingly more difficult to reverse the trend week over week for the next 5 weeks starting October 25. We know that both indicators are within the first standard deviation of the 216 week average. The Positive Indicator (PI) is above the 216 week average and the Negative Indicator (NI) is below. The PI is showing signs of moving higher, but can have dips on a short term basis. Suggestion: Look for good values to buy.
WHEAT: According to the LAWG 647 MODEL December Wheat reversed to an uptrend as of the close Friday last. So what do we know? We know that it will take a close at or below $4.35 on Friday the 18th to reverse the trend to bearish. We know that the PI is above the first standard deviation of the 216 week average. The Negative Indicator (NI) is within the first standard deviation of the 216 week average and below the 216 week average. The PI is showing signs of moving higher, but can have dips on a short term basis. Suggestion: Look for good values to buy.
CORN: I include Corn because it has NOT turned bullish. According to the LAWG 647 MODEL Corn remains in a downtrend needing a close on Oct. 18 at or above $4.17 ¾ to turn bullish. IF December Corn does not have a significant break there is a good chance it can turn bullish on October 25th. The PI and NI are within the first standard deviation of the 216 week average, with the PI above the 216 week average and the NI below. Suggestion: Look for dips to buy accepting the risk that it will not reverse on the 25th.
COTTON: According to the LAWG 647 MODEL December Cotton reversed to an uptrend as of the close Friday last. So what do we know? We know that it will take a close at or below $57.00 on Friday the 18th to reverse the trend to bearish. We know that the PI is above the first standard deviation of the 216 week average. The PI is showing signs of moving higher, but can have dips on a short term basis. The Negative Indicator (NI) is within the first standard deviation of the 216 week average and below the 216 week average. Suggestion: Look for good values to buy.
DECEMBER CATTLE: According to the LAWG 647 MODEL December Cattle reversed to an uptrend as of the close Friday last. So what do we know? We know that it will take a close at or below $107.75 on October 18 to reverse back to bearish. We know that failing to reverse the trend on October 18 it will become increasingly more difficult to reverse the trend week over week for the next 4 weeks starting October 25. We know that the PI is above the first standard deviation of the 216 week average and showing signs of moving higher, but can have dips on a short term basis. The Negative Indicator (NI) is within the first standard deviation of the 216 week average and above the 216 week average. Suggestion: Look for good values to buy.
COFFEE: According to the LAWG 647 MODEL heading into last week December Coffee had a good chance to reverse the trend to bullish and failed badly. While not an absolute it is my opinion that once any commodity has an opportunity to reverse the trends and fails……watch out. So what do we know? We know that it will take a close at or above $108.95 on October 18 to reverse bullish. We know that while the NI is getting close to signaling Positive Equilibrium it is not there yet. We know that the NI is above the first standard deviation of the 216 week average while the PI is within the first standard deviation and below the 216 week average. It is my opinion the best the Bulls can expect over the next four or five weeks is a period of consolidation. Suggestion: Look for good values to sell.
CRUDE OIL: Last week I alerted readers to the fact that according to the LAWG 647 MODEL Crude Oil had reached a point of Positive Equilibrium and to begin looking for values for short term long sided trades. December Crude did close $1.96 higher for the week and still remains in unbalanced to the negative. Both indicators are within the first standard deviation of the 216 week average, and above the 216 week average. Suggestion: Look for good values to buy.
If there are other commodities that you would like me to discuss I am just an email or phone call away.
WORD TO THE WISE
Past performance is not indicative of future results. The information contained in this report is intended for informational purposes only and is the opinion of the writer and may change at any time. This information was compiled from sources believed to be reliable but accuracy cannot be and is not guaranteed. There is no warranty, expressed or implied, in regards to this information for any particular purpose. There is SIGNIFICANT RISK involved in trading futures and or options on futures and may not be suitable for all investors. Investors should consider these RISKS and evaluate their suitability based on their financial conditions. No one should ever consider trading futures or options on futures with anything other than RISK CAPITAL. This information is provided freely and is NOT in the capacity of a trading advisor. NO LIABILITY on the part of the author exists for any trading loss you may incur in the use of this information. Information provided is not to be construed as an offer to sell or solicitation to buy any commodity or security named herein.