Providio’s Daily Futures Market Commentary for Feb 8, 2012 (Part 2)

[providiotrading]

Yen: 08Feb Moderate weakness inside of a larger consolidative pattern pulled Momentum negative this morning. Developing Oversold conditions (our current measure registers 41) will grab our attention if it can fall below 35 again, as it has not been able to remain below there for long.
Strength to 1.32 should make readers wary of BOJ interventions. Continuing low side biased Volatility leaves an opportunity for both protection and short oriented positions.
Seasonal Snapshot: All three patterns are negative, but the 15yr is decidedly more so until late Feb.

Energies: 08Feb A lower than expected stocks increase accompanying a slackening demand picture drove a fluctuating day of prices. The developing story of Iranian belligerence and sanctions is maintaining an undercurrent of unease to counter the existing negative bias.
Seasonal Snapshot: All 3 Petroleum contracts are entering a period of more positively biased action until the end of February.

Petroleum: 08Feb With the supply and demand picture still largely negative in bias, the morning’s lower than expected build still contributed a negative dynamic as the report hit the news. Several forays below the 9825 support eventually petered out and the market seems to have stabilized at just under 9900. This is where the March ran into resistance yesterday morning before eventually testing the $100 level.
Heating Oil, outside some pops higher yesterday, has gone sideways since late action on Tuesday night.
RBOB Gasoline is trending higher and trading higher.

NatGas: 08Feb Continued warmer than normal weather has taken the steam out of this market’s recent rally off of news of production cuts. Frankly, Winter is running out of time to make a serious dent in the still bulging storage numbers. Positive Primary indicators are being degraded by the secondaries’ erosion.
Seasonal Snapshot: A modest upward bias is only sustained until 04Feb and then its down again, especially in the 15&30yr patterns until late Feb.

Equities: 08Feb All three of our tracked markets remain in extreme Overbought conditions. Although all three backed off the previous period of overextension, which peaked around 25Jan, it was only a rest period in the uptrend that has been in place since mid December. Our Volatility measure in all three has been well below average since the last week of January. This should make option purchases a more attractive component in trading strategies.
Keep an eye on developments in Europe, they may hold the key to an uncoiling Volatility spring.

S&P and Dow: Choppy consolidation with a mildly weaker tone in the 15&30 yr patterns until they start to work higher at the end of Feb. After some modest strength, the 5yr pattern displays a material downdraft 19Feb-03Mar.
NASDAQ: Consolidation with a weaker tone in all three patterns until an upswing in the 5yr commences in mid-March.

Grains:
08Feb Continued positioning ahead of Tomorrow’s USDA Crop Production reports.

Corn: 08Feb News of beneficial rains in South American growing areas caused a material sell-off in early pit session trading. Stabilization and short covering ensued as the marketplace attempted to position ahead of tomorrow’s important USDA reports. The upshot is the day’s action ends up basically nowhere on the say and the all-session candlestick ends as a Doji. Not consolidation with the Volume rising significantly. Primary Technicals point higher but the secondaries indicate pressure to the downside may be building. 6.50 is resistance and support at 6.31 held this morning.
The 200-day Moving Average remains falling in a shallow pattern.
Seasonal Snapshot: As the Pattern gets short in duration the bias gets more positive reflecting recent years’ commodity boom conditions. All 3 patterns are in stable patterns until the end of Feb.

Soybeans: 08Feb Soybeans suffered the same fate as Corn in early morning as the rains news hit this South American crops, too. More consolidative than Corn as Volume dropped today. 1244 ¾ is a double top resistance in March. 1220 likely support. Secondaries are turning in the face of both Primaries still positively biased.
The 200-day Moving Average is still falling.
Seasonal Snapshot: All three patterns display an upward bias until the end of Feb.

Wheat: 08Feb Early action in sympathy with corn and Soybeans. After a probe to test the 653 support the market bubbled back to the early AM bottom near 660. Late higher Volume Volatile action belied the positioning ahead of tomorrow’s reports. 670 remains as resistance.
The 200-day Moving Average is still falling.
Seasonal Snapshot: All 3 patterns have a short-term peak on Feb. 9 and then enter a downward bias until Feb 21.