Another day of consolidation within the major indices with most closing near flat, with the exception of small caps which closed up 60 bps on the day. Global equity markets were mixed while bonds continued to rally after showing strength to start the week. Bias in the major indices continues to be to the upside until we breach the 8 day EMA on volume. Light volume continues to help the bulls grind higher despite the somewhat aggressive v shaped move off the lows.
Leaders to the upside included solar stocks (TAN), home builders (XHB), retail (XRT), regional banks (KRE), semiconductors (SMH), basic materials (XLB), and as mentioned above, small caps (IWM).
Laggards on the day included large cap biotech (IBB), energy and oil service names (XLE, OIH, PXJ), telecom (XTL), utilities (XLU), transports (IYT), and financials (XLF).
In the commodity space gold and silver experienced some downside today as they try to work off overbought conditions and will likely test the 21 day EMA in the coming days. Both need to hold their prior breakout areas discussed on my weekend posts to remain bullish.
Crude oil continue to build a base above the 8 day. A break and close above 103 will warrant a test of 105. Support below remains 100.5 (100 day EMA) and the prior breakout area just below that.
Gasoline pulled back into its 21 day EMA as it looks to build a base above 2.75 support.Resistance at last week’s highs (2.86).
Natural gas is well off Monday’s high though it is attempting to find some footing at support of the prior breakout area and 100 day EMA between 4.50-4.55. Below that we will likely test 4.20 and the 200 day EMA at 4.12. Resistance above at today’s gap down.
Sugar reached its price target of 18 yesterday as it moves into overbought territory. It continues to build a base above the 200 day EMA at 17.05 as the shorter term moving averages catch up to provide further support.
Oats put in a new ATH by trading up to 498 intraday but reversed and closed back below yesterday’s close. Expect some downside follow through given the heavy volume. Support at the 21 day 435.72
Soybeans continue to ride the 8 day EMA higher, no reason for the trade to change until we get some sort of reversal candle. Some resistance above at 1400.
In the currency markets the AUD/USD is beginning to look a little heavy here after breaking the 21 day which indicates it may need more time to build above .8820 support to further build out the right shoulder of a potential inverse head and shoulders pattern. A break of .882 and we will likely retest the lows in the mid .86s. Key resistance remains the 100 day EMA at ~.907.
EUR/USD small downside today as it continues to build a base above the 50 day EMA. Resistance remains 1.3770-1.38.