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Weekly Futures Report

 Several positive news: drop in jobless claims and crude stocks lower by 3.27 million barrels

11.10.10 Filed Wednesday 3:40 pm

ALL CHARTS THIS WEEK ARE Hourly Bars

Last Last Week

December Crude 87.80 84.90

December Heat 244.29 233.15

December Gas (Blended) 223.60 213.80

Crude oil surged on Wednesday as the US Department of Energy stated

that there was a lower than expected drop in available supplies. For the

latest reporting week, crude stocks were lower by 3.27 million barrels to

364 million barrels. The trade was looking for an increase of 1.5 million

barrels. Also, inventories of gasoline and diesel fuels also fell by more

than previously estimated levels. Another positive for the market was a

drop in weekly jobless claims. Some traders termed the report very

bullish. Buying enthusiasm might have been even greater but for the

wicked selloff in the metals witnessed on Tuesday and early Wednesday.

With an increase in the value of the underlying asset and an

accompanying increase in volatility, the CME group increased margins

for both gold and silver which triggered a considerable long liquidation

trade. With traders raising cash and moving to the sidelines, selling also

found its way into the energy sector. But Wednesday’s data resulted in

renewed buying interest and sent crude to its best level in two years.

Crude imports were also lower, tightening supply. Refinery runs came

in at 82.4% of capacity, slightly higher than last week reflecting decent

demand. Distillate stocks were lower by 4.97 million barrels to 159.9

million barrels for the seventh straight weekly decline. Traders were

looking for a drop of 2 million barrels. Money flow for crude and its

products remain positive.

Support Resistance

December Crude 84.40 88.50

December Heat 2.36 2.50

December Gas 2.14 2.25

***********************

METALS

Last Last Week

December Gold 1403.30 1344.00

Dec Silver 27.15 24.70

Jan Platinum 1743.90 1702.40

Gold and silver finally broke from their torrid advances on Tuesday. An

increase in the underlying value of the asset and an increase in volatility

prompted the CME group to raise margins, the good faith money which

needs to be posted to maintain positions overnight. Another negative for

metals was the rally in the dollar, particularly against the EC, on

concerns over Irish indebtedness and the negative ramifications an Irish

default would have on the EU. Previously, gold had rallied by 29% for

the year and just Tuesday touched a record level of $1424.00 an ounce.

On the margin increase, silver fell by 6% after reaching a 30 year high

at $29.34. Silver margins were raised to $6,500 while Palladium, a very

thin market, lost nearly 5%. Money flow for metals remains positive.

The Fed believes that there isn’t enough inflation in the US economy

and will keep interest rates low until there’s evidence suggesting

otherwise.

Support Resistance

December Gold 1363.00 1440.00

Dec Silver 25.29 30.00

Jan Plat 1720.0 1832.00

*********************************

SOFTS

Last Last Week

December Coffee 212.25 196.15

March Sugar 32.75 30.15

Sugar fell in price over the past two sessions on sympathetic selling form

the metals complex and on the belief that current, extremely high prices

will curb demand eventually resulting in lower values. USDA stated that

sugar use should drop by 1% for the upcoming season after rising over

5 a year earlier. Sugar recently traded at 29 year highs.

Coffee was also lower y 3.4% Tuesday on commodity asset class selling

and a stronger dollar.

Support Resistance

December Coffee 203.00 224.00

March Sugar 31.50 34.00

*****************************************

Last Last Week

January Soybeans 13.194 12.374

December Corn 5.66 5.81

December Wheat 7.10 6.902

Soybeans eased off of 26 month highs on ideas that higher prices will

curtail export demand. China, the world’s best customer, cut back its

imports by 20% for September. Previously, imports had been 48%

higher than year ago levels.

Corn fell in price as rising production levels in China should reduce

demand for US corn. It’s believed that China harvested a record 180

million metric tons of corn this year. Last year China was a net

importer of corn.

Wheat futures fell as an increased forecast for rain was factored into the

near term price outlook. Prices had rallied over 50% since the end of

June on draught conditions in key growing areas in Russia. US dollar

strength over concern over Irish debt was a grain market negative as

well.

Support Resistance

January Soybeans 12.39 13.58

Dec Corn 5.50 5.97

Dec Wheat 6.89 7.49

Chuck Kespert from NY/NY

HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT

LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO

REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS

LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN

FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN

HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS

SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.

ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS

THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF

HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE

FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN

COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL

TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO

ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING

LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT

ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS

RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF

ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY

ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL

PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT

ACTUAL TRADING RESULTS.

 

 

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