Issue Date: October 02, 2009
The Wheat Supply Continues to Grow
The wheat market continues to pound out new lows as the same problems that I have been talking about for months continue to grip this market. As expected, the Small Grains Summary and Grain Stocks reports, released on Wednesday morning, confirmed the bearish sentiment of these markets. Curiously, these markets put in new lows prior to rallying late in the session. The rally may have occurred because of oversold conditions, or it may have occurred because of a new plan to implement variable storage rates on the September 10 Chicago wheat contract. The market had been concerned about this plan being implemented on the December 9 contract, which is bearish the market. This isn’t over yet. I expect volatility related to this factor to continue. Regardless of the reason, the rally failed once again.
By Brian Henry
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I Want My Quarter Back
Do you remember the good old days? You know like the this past quarter when it seemed stocks went up every day? Give me my quarter back! Well folks those days may be just a pleasant memory. The new quarter started with an October stock slide leaving oil traders to once again question whether bullish stocks is bullish or is bullish bearish. In other words, should the oil market follow stocks lower because of decreased demand fears? Or if we get an October stock market crash is it bullish oil because the dollar may stay weak? Oil seems to be entering October with a bit of an identity crisis as the new quarter raises more questions. The main one being what drove oil this week and what will drive it in the next quarter.
By Phil Flynn
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Stock Index Futures One Day Reversal Top?
Does the one day reversal pattern that was made on September 23rd mark the end of the near historic rise in the broad averages? Bearish technicians are pinning their hopes that this is the case. One day reversal tops can be identified by a single day spike to the upside, making new highs for the move and then falling below the previous day’s low and closing near the day’s low and below the previous day’s low. Volume on the day of this pattern is often heavier than usual. So far, this bearish indication appears to be working, which is attracting additional technical selling. However, keep in mind that the one day reversal pattern is the weakest of all of the reversal patterns. Just in case you are wondering, it’s the island that is the most reliable of the reversal patterns.
By Alan Bush
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