Weekly Commodity Strategy Review

Monday began with an official COT Sell signal in the U.S. Dollar Index that we published in TraderPlanet. This trade was actually a follow up to the previous week’s piece also published in TraderPlanet.

We combined these into one post including the annotated US Dollar Index chart in – The USD Index – A Speculative Bull Trap?

Tuesday we shifted gears towards the grain markets for Equities.com, specifically, March soybean oil futures. This market really feels like it has one more flush lower in prices before some real bargain hunting can be done. It’s clearly visible on the chart we posted that commercial long hedgers are interested under $.32 per/lb. The real question is will the market provide these pricing levels to satisfy their future needs.160x600

A Final Flush in Soybean Oil

Finally, our main piece focused on the natural gas futures market. Like the rest of the commodity complex and especially the energy sector, natural gas has been beaten down by a supply glut in the face of declining global demand.

However, exports make up a small part of the domestic natural gas industry. Therefore, the domestic picture and the relative strength of the U.S. economy versus the global economies in general is helping to support this market beyond typical seasonality. That being said, when we combine the typical seasonality of the March natural gas futures contract along with the rapid and substantial build in the commercial long hedger position it becomes clear quickly that their eagerness kicks in under $3.50 per mm/btu.

Picking a Bottom in Natural Gas


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