The September E-mini S&P 500 market closed lower on Friday, but managed to hold on to gains for the week. Today’s early session rally failed to take out yesterday’s high despite a better than expected U.S. 2nd Quarter GDP Report. This could be an indication that this market has run out of buyers at current levels and that a much needed correction is likely.
September Treasury Bonds followed-through to the upside after yesterday’s better than expected Treasury auction. Today’s weakness in the equity markets also contributed to the firm tone in the Treasuries. This could be an indication that investors are taking a little off the table in the stock market and reallocating to the fixed income market.
September Crude Oil shrugged off a bearish report from earlier in the week and managed to close near the high of the day. Most of this rally was related to the weaker Dollar as traders increased their bets that a recovery in the U.S. economy will lead to great demand for energy and energy products.
The weaker Dollar triggered a surge in December Gold. The strong close has put this market in a position to challenge the recent swing top at 962.70. September Silver also mounted a strong rally on Friday. The close near the high of the day puts this market in a position to change the trend to up on a breakout over the last swing top at 14.10. Gains could be limited if this market finds resistance at a major 50% price at 14.35.
November Soybeans surged for the second consecutive day. The weaker Dollar triggered a follow-through rally to the upside on the prospect of greater foreign demand.
Increased demand because of the weaker Dollar and speculation that the recent cool, dry weather may actually be hurting the development of this year’s crop, helped December Corn change the trend to up.
December Wheat was up for the day but failed to rally like the corn and soybeans. This is because the inventory is too large. The main trend is still down and will not change to up until 5.80 is penetrated.
December Cocoa finished lower today. Despite production issues which have helped this market rally, traders seem hesitant to buy at current levels. The strong rally in the British Pound may lead to speculation that demand may drop because Cocoa has become too expensive.
October Sugar closed lower on Friday despite a weaker Dollar but still managed a gain for the week. Traders should look for increased demand should the Dollar continue to weaken. India’s production problems could continue to mount especially if monsoon rains remain below normal.
