Commodities Countdown

Dollar And Yen Snap Trend Lines - Webinar Skim 2016-10-06

There is a general theme this week that I want to tie a bunch of charts together with. A lot of the charts from today started their rally with the lows of late January and early February. Now it seems like this uptrend is being threatened on many of the charts. Even if they don't all change direction on the same day, it is important to note that we could be looking at a major investor rotation away from some of the trends that have been with us most of the year. Two of the most notable trend lines that snapped this week were the British Pound and the Japanese Yen. However, Gold, Oil, Natural Gas, the US Ten Year bond, and many other charts are changing or testing meaningful 6-month trend lines.

I'll start with the Yen ($XJY). The Yen has been tucked in a trading range for the last two months. While this week's action was still within the trading range, a couple of technical signals fired. First, the uptrend line was broken. Secondly, the 65 SMA in green was also broken. Both had been meaningful support for the currency. Looking at the zoom box, this week's price action actually rolled the 65 SMA over and it now is sloping down. Typically the Nikkei ($NIKK) strengthens when the Yen weakens. This may cause the Nikkei to move higher out of the trading range it has been in for the last two months and it could break out meaningfully from the 8 months of resistance around the 17000 level shown in blue.  Notice the Nikkei changed trend around the end of January. I have placed two circles on the currency chart. The Yen broke out above the trend line in December, pulled back and then started to move higher. That major change in the Yen happened while the US market came under heavy selling pressure from the end of December to February 10. Now we are on the other end of the trend. 

Continue reading "Dollar And Yen Snap Trend Lines - Webinar Skim 2016-10-06" »

The Bank Review Three Months After Brexit - Part 2

This is a continuation of the article: "The Bank Review Three Months After Brexit"  Click on the link to read it first.

In hindsight, Brexit injected fear into the market and the market has rallied hard for three months. Let's zoom in on some of the banks close to the issue.

HSBC is one of the world's largest banks residing in the UK. With an SCTR ranking of 86.7, it is in the top quartile for large-cap price performance now. We can see the highs of $49 and $48 in 2013 and 2014 have created a ceiling for the stock but this level is a long way away from the current price. HSBC really jumped off the 4-year lows. As the stock is at a major resistance level, this is an important test for the stock. So far the stock broke out to a new high above $38.24 but then failed to hold it. That is not a positive. 

Continue reading "The Bank Review Three Months After Brexit - Part 2" »

Bank Review Three Months After Brexit

This article was first published on June 27, 2016. All of the charts have been updated to check our progress.

Since the sub-prime financial crisis, there has been a lot of discussion about Too-Big-To-Fail, Bank Stress Tests, and Central Banks using unique tools to try and keep the market on an even keel. One of the problems in the world is the deeply indebted government entities. What makes that issue unique is our global commercial banks own government debt as AAA debt to support their loan book. The assumption is that sovereign nations can always raise taxes to get paid back. 

One of the keys to recognizing the Financial crisis in 2008 was that the banks started showing lower lows and lower highs while the indexes tried to make higher highs. Something seemed wrong.

Continue reading "Bank Review Three Months After Brexit" »

Commodities Totter on the Teeter-Totter - Webinar Skim 2016-09-15

Commodities continued their pullback this week. The problem is that a lot of them have been teetering on support. This week marks a break in my optimism. First, Crude oil finished the week at the uptrend line. On the webinar, I used the close rather than the intraday lows. The bottom line, oil needs to hold here.

Continue reading "Commodities Totter on the Teeter-Totter - Webinar Skim 2016-09-15" »

The Yield Swing Takes The Energy Market With It

As the 10 Year Yield ($TNX) broke out of its trading range, it injected volatility into the market between Friday and Wednesday. Until this starts to settle down, it is likely that we see wide price swings each day affecting a lot of the asset classes. In the near term, this range at 17.5 may hold but the highs for the year are around 20.0. The 200 DMA at 18.0 could also provide some upside resistance.

Continue reading "The Yield Swing Takes The Energy Market With It" »

Oil And Natural Gas Fuels XLE Breakout - Webinar Skim 2016-09-08

  • Oil Continues To Test High $40's
  • Natural Gas Consolidating
  • Oil And Gas Stocks Lead The SCTR Rankings
  • XLE Breaks Out Of A Major Base

Crude Oil ($WTIC) continues to flirt with breakout levels. This $47.50 seems to be a meaningful area of attention. We'll continue to watch this level in the coming months. Here is a link to the webinar.

Continue reading "Oil And Natural Gas Fuels XLE Breakout - Webinar Skim 2016-09-08" »

Oil And Gas Stocks Soar Pushing XLE To 52 Week Highs

The Energy Sector SPDR (XLE) has been trying to breakout for the last few weeks. Even as Crude Oil and Natural Gas pulled back, the XLE held firm. Today it is breaking out!

I have my regularly scheduled webinar today at 5 PM EDT for those interested in finding opportunities in the energy space. Commodities Countdown 2016-09-08.

Don't forget about ChartCon 2016! It's only 2 weeks away!

This month, Chartcon 2016 is coming to you via live stream broadcast! Rather than have customers spend all the money to travel to the event, we have arranged for all the technicians to gather in one location and broadcast from there, saving you thousands of dollars. It should be a fantastic couple of days with a tight synopsis of the markets from an award winning Technical Analyst crew. You can register for this event for under $200 and have access to the recordings. Chartcon 2016.

Next, I will be presenting in person at Golden Gate University in September if you are in the area.

September 20th, 2016 @ 4 PM
Golden Gate University. Rm 3214
536 Mission Street
San Francisco, 94104
Cost: Registration is $10 for MTA members and $20 for non-members

You can register through the TSAA-SF website. Click here.

Feel free to pass this article on to friends and family. If you would like to receive future articles by email, click on the Yes button below. I do roughly one-two articles a week from each blog (Commodities CountdownThe Canadian TechnicianDon't Ignore This Chart) so you need to subscribe to each one individually. I also do a couple of webinars each week and you can view those live or in our webinar archives. As a heads up, I'm on twitter @Schnellinvestor.

Thanks for taking the time to join me. If you would like to receive a few of these Commodity market-related emails each week in your inbox, click on the Yes button below.

Good trading,
Greg Schnell, CMT, MFTA

Lots Of Commodities Lose Support - Webinar Skim 2016-09-01

The charts have been bullishly aligning for the majority of the commodities since the January/February lows. With the US Dollar trading between 93 and 100 for 19 months, the stability of the dollar has been helping some of the commodities regain some chart strength. With the $USD in the middle of the range, 8 commodities either lost the support of the 40 WMA or broke a support trendline in the last 2 weeks. That is not the action we would expect to see.

Gasoline ($GASO) lost 40 WMA support in the energy sector. Crude Oil ($WTIC and $HOIL) are still holding up above the 40 WMA...barely. Heating Oil ($HOIL) gave us a trend line backtest that looked successful but now looks unable to get back above trend. So these two start the parade.

Continue reading "Lots Of Commodities Lose Support - Webinar Skim 2016-09-01" »

Agrium (AGU) And Potash (POT) Discuss Merging

Two of Canada's largest companies in the Agriculture related space confirmed they were in merger discussions on Tuesday. While Agrium (AGU, AGU.TO) is widely considered an acquisitive company, this has not been the history for Potash Corp. (POT, POT.TO).

A few things need to be reviewed here. First of all, Potash prices have been struggling since the collapse of the potash marketing consortium, Canpotex. As this Potash pricing problem doesn't appear to be resolving itself anytime soon, Potash is struggling. It appears that Agrium wants to continue to expand its vertical integration model for supplying the farmer. With a retail arm firmly in place, Agrium does a nice business supplying the farmer with crop inputs and then helps them with the sale of the grain during and after the harvest through their network of grain terminals. 

Let's look at the charts to see what might be happening technically. Starting with Potash Corp, the stock is roughly  half of its preceding market value before the breakup of Canpotex. Again, Canpotex was the marketing consortium controlling price on Potash. Before Tuesday's announcement, Potash's US listing was trading at $16 USD which is  about 25% of the 2008 high of $65. That can motivate a management team to look for strategic alternatives.

Continue reading "Agrium (AGU) And Potash (POT) Discuss Merging" »