[B] CRB Outlook: Fresh 14-month lows as cocoa, energy tumble
20-Jun-2001 13:38:03
By Kevin Pendley
Chicago, June 20 (BridgeNews) - The CRB Index was already under attack this
morning, sinking to fresh 14-month lows with the sharp decline in cocoa and
more modest losses in metals. Energy markets look set for a lower start as
well, which should press the index even lower this morning.
* * *
Below is a snapshot look at several underlying CRB components:
cocoa -- was last down 3.2%, testing major support at $900 in Jly, but charging
through that support zone in Sep as technicians punish the market (story .3741)
coffee -- 5% decline Tuesday left the market oversold on short-term charts as
traders wiped out the frost premium (story .3731)
sugar -- called higher with gains in London; Philippines, Taiwan, Iran all in
the market for product (story .3745)
copper -- down 0.6% in early trading, pressured by ongoing concerns about the
U.S. and world economic situation (story .2102)
gold/silver -- gold was down 0.5%, while silver was flat, with gold pressured
by a firm tone in the U.S. dollar once again (story .2336)
corn/soybeans/wheat -- seen slightly higher on followthrough from Tuesday
cattle -- steady to 15 higher on followthrough and fund buying from Tuesday,
feeders set contract highs Tuesday (story .3200)
hogs -- concerns about soft cash and pork product prices (story .3205)
crude oil -- down 0.5% following a rise in the API stocks figure, which was up
1.417 million barrels, in line with trade expectations; gas stocks were up
3.612 mln (story .1898); however, the DOE figure was down 700,000 for crude,
but up 3.7 mln for gas (story .1905)
natural gas -- down 2.4% in after-hours action amid mild weather and in quiet
trade before the AGA report this afternoon, which is expected to show 85 to 95
injection (story .1908)
The CRB Index was last down 0.70 at 207.77, pressured by losses in cocoa,
copper and precious metals.
KEY CHART POINTS TO WATCH FOR IN THE CRB INDEX (US@CRB)
254.79 -- May 29, 1997, high; highest since May 1996
238.00 -- upside objective based on pennant breakout
234.38 -- Oct. 12 uptrend high
232.70 -- 61.8% retracement of April 1996-July 1999 bear run; violated
briefly in mid-October and again in January
222.01 -- 200-day moving average
220.00 -- major support/resistance swing line on charts dating back to
January 1991
218.37 -- Oct. 30 correction low; lowest since August 2000; now
resistance
218.02 -- reversal peak, set March 28
217.43 -- lower edge of support line from last summer and March 2000 peak;
now resistance
216.44 -- 100-day moving average
215.34 -- 100-week moving average
213.46 -- 200-week moving average
213.12 -- 40-day moving average
211.33 -- former trendline support dating back to July 1999 lows;
reconfigured to account for April low (rising at 29 bps/week)
210.92 -- 20-day moving average
-209.20 -- Tuesday's high
>208.47 -- Tuesday's close
208.46 -- 50% retracement of July 1999-October 2000 rally
-208.37 -- Tuesday's session low; lowest point since April 12, 2000
199.66 -- Oct. 11 1999 low; starting point of lower border of two-month
triangle; key support from range low
195.99 -- gap on daily charts left by Aug. 30 higher opening
193.99 -- reversal high set May 6; old trading range highs, now support
188.44 -- July 28 low; double bottom on daily charts
182.67 -- July 13 low; lowest since June 1975
180.30 -- June 1975 low on monthly charts
of
NOTES: At the close, the Commodity Research Bureau index of 17 futures prices
was 0.52 lower at 208.47 after reaching the lowest level since mid-April 2000.
The CRB closed on a weak note, in fact notching the lowest daily close
since April 11, 2000, while hitting the lowest intraday point since April 12,
2000. The breach of double bottom support at 208.43 is an important chart
failure, but it's still too soon to call Tuesday's action a convincing
violation of that support zone. If the index does extend the slide this week,
it would open the door for a significant downside push in the weeks to come.
It should be noted that breadth was not impressive on Tuesday's slide, with
nearly all the power for the CRB's decline coming from coffee and cocoa. For
now, it's safe to say the CRB is perched on a precarious support line and
action for the rest of the week could be critical for determining the near-term
trend.
Bridge and Telerate users, please double click for the chart:
Media://Analytics/Pages::/cmd=US@CR/CH/MA/HZ2/NVO
Media://Analytics/Pages::/cmd=US@CR/CH/MA/NVO/WK (weekly)
For a look at how individual components have fared in the CRB this year:
news.bridge.com
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