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Soybeans:

For the week, August soybeans gained 55.75 cents and the new crop November contract gained 52.25 cents. The Commitment of Traders Report, which is tabulated on Tuesday and released Friday showed that in the managed money category, speculators added 15,656 contracts to their long positions and liquidated 2,210 contracts of their short positions. Commercial interests liquidated 7,118 contracts of their long positions and also liquidated 328 contracts of their short positions. As of the latest report, managed money speculators are long by a ratio of 34.25 to 1. The previous week, managed money speculators were long by a ratio of 23.72 to 1. 

On May 1, August soybeans closed $14.86 3/4, which is the highest close for this contract month. The Commitment of Traders Report was tabulated on May 1, therefore this report reflected the the highest close for soybeans. On that date, managed money was long soybeans by a ratio of 31.51 to 1, which is lower than the current ratio of 34.25 to 1 when soybeans closed at $14.55 1/2 on June 26, the date this week’s report was tabulated. In other words, managed money is more bullish as of the latest report than on May 1 when the market closed over 30 cents higher. Tops in commodities are generally made when there is a record number of longs versus shorts. This is not to say that the market cannot go higher, however, as the market gets saturated with additional longs, it becomes more vulnerable to a setback. Soybean’s 50 day moving average on the continuation chart is $14.26 3/4, therefore by this standard the market is overbought.

Soybean meal:

For the week, August soybean meal gained $9.80 and the new crop December contract gained $8.90. The Commitment of Traders Report showed that in the managed money category, speculators added 4,364 contracts to their long positions and liquidated 73 contracts of their short positions. Commercial interests added 3,815 contracts to their long positions and also added 6,922 contracts to their short positions. As of the latest report, managed money speculators are long by a ratio of 37.23: 1. The previous week, managed money speculators were long by a ratio of 34.32: 1

Like soybeans, soybean meal is in the same position with respect to the high number of managed money longs. On May 1, the Commitments of Traders Report showed that managed money speculators were long by a ratio of 31: 1 and August soybean meal closed at $428.70 the day the report was tabulated. In the latest report tabulated on June 26, August meal closed at $424.10 and the ratio of longs to shorts was 37.23: 1. In other words, traders are far more bullish today than they were in early May when the market closed a couple of dollars higher. The 50 day moving average on the soybean meal continuation chart is $417.00, which indicates the market is overbought.

Corn:

For the week, September corn gained 77.25 cents and the new crop December contract gained 80.75 cents. The Commitment of Traders Report showed that in the managed money category, speculators added 5,719 contracts to their long positions and liquidated a massive 35,225 contracts of their short positions. Commercial interests liquidated 3,311 contracts of their long positions and added 21,449 contracts to their short positions. As of the latest report, managed money speculators are long by a ratio of 2.20 to 1. Corn will continue to be buffeted by drought concerns and this will keep the market highly volatile. There is tightness in the July contract, and this should act to support September corn in the near term. Despite being on a short and intermediate term buy signal, the open interest action has been negative in relation to the price advance. Stand aside.

Wheat:

For the week, September wheat gained 69.75 cents. The Commitment of Traders Report showed that managed money speculators added 11,007 contracts to their long positions and liquidated a massive 33,674 contracts of their short positions. Commercial interests liquidated 9,605 contracts of their long positions and added 22,352 contracts to their short positions. There was a huge shift in the managed money category from last week when they were net short by a ratio of 1.14 to 1. This week that turned around and now managed money is long by a ratio of 1.48 to 1. Stand aside.

Performance week of June 25-June 29 (September contracts)
Corn………………..+14.01%
Wheat……………. +10.25%
Soybean Oil……. +5.32%
Soybeans………… +4.87%
Soybean Meal…. +2.69% 

Crude oil:

For the week, August crude oil gained $5.20. The Commitment of Traders Report showed that money managed speculators liquidated 736 contracts of their long positions and added 1,047 contracts to their short positions. Commercial interests liquidated 5,695 contracts of their long positions and also liquidated 3,795 contracts of their short positions. As of the latest report, managed money speculators are long by a ratio of 2.38 to 1.

In the Weekend Wrap of June 3, 2012, I said that readers should look for a bottom when the long to short ratio fell to near 2.48: 1, which was the ratio when crude oil made a major low at $74.95.  The low was reflected in the October 4, 2011 COT report. The market should be able to rally to the 50 day moving average of $90.82. Stand aside.

 On July 1, the Iranian oil import ban is scheduled to go into effect. This means that European Union countries will no longer import crude from Iran, nor will European companies write insurance policies for vessels carrying Iranian crude. According to U.S. officials, Iranian crude exports have declined from 2.5 million  barrels per day last year, to 1.2-1.8 million barrels per day so far this year. The drop-off in Iranian exports will continue due to the impact of the oil embargo, which will take millions of barrels per day off the world market. If Iranian intransigence continues, the shortfall in global supply could eventually become a major problem.

Gasoline: 

For the week, August gasoline gained 16.42 cents. The Commitment of Traders Report showed that money managed speculators added 848 contracts to their long positions and also added 5,603 contracts to their short positions. Commercial interests liquidated 14,631 contracts of their long positions and also liquidated 18,601 contracts of their short positions. As of the latest reporting period, managed money speculators are long by a ratio of 5.46 to 1. The previous week managed money speculators were long by a ratio of 10.3 to 1. In the June 3 Weekend Wrap I said readers should look for a low in gasoline when the long to short ratio fell to approximately 7.50: 1. Look for a rally to the 50 day moving average of $2.82. Stand aside.

Copper:

For the week, September copper gained 18.15 cents. The Commitment of Traders Report showed that managed money speculators liquidated 998 contracts of their long positions and added 874 contracts to their short positions. Commercial interests added 2,429 contracts to their long positions and liquidated 2,450 contracts of their short positions. As of the latest report, managed money speculators are short by a ratio of 1.49: 1. If the rally in copper continues, investors may have an opportunity to implement bearish positions. For now stand aside.

Gold:

For the week, August gold gained $37.40. The Commitment of Traders Report showed that managed money speculators liquidated 10,527 contracts of their long positions and added 5,129 contracts to their short positions. Commercial interests added 1,923 contracts to their long positions and liquidated 6,671 contracts of their short positions. As of the latest report, managed money speculators are long by a ratio of 3.32 to 1. The previous week, managed money speculators were long by a ratio of 4.30: 1.

Investors should be speaking with their investment advisor or broker regarding the acquisition of gold at lower prices for the longer-term. Please keep in mind that if gold closes beneath the December 29, 2011 low of $1523.90, it is highly likely that gold will trade down to the $1470 level.

Silver:

For the week, September silver gained 88.8 cents. The Commitment of Traders Report showed that managed money speculators added 93 contracts to their long positions and also added 3,756 contracts to their short positions. Commercial interests added 139 contracts to their long positions and liquidated 3,016 contracts of their short positions. As of the latest report, managed money speculators are long by a ratio of 1.14 to 1. The previous week, managed money speculators were long by a ratio of 1.47: 1. Stand aside.

Euro:

For the week, the September Euro gained 96 points. The Commitment of Traders Report showed that in the leveraged funds category, speculators liquidated 7,488 contracts of their long positions and added 1,405 contracts to their short positions. As of the latest report, leveraged funds are short by a ratio of 3.09 to 1. 

Despite the latest news out of Europe, which is supposed to be bullish for the Euro, the market was not able to surpass the highs made from June 18 through June 21. For example, the high for the September Euro on June 29 was 1.2703, but was unable to surpass the high of June 21 of 1.2711, or the high of 1.2753 made on June 20. The table below shows the performance of four major currencies on June 29. Although the Euro performed quite well, it fell short considering the alleged significance of the meeting in Europe on June 29.

Currency Pair   Performance
EURO/USD         +1.639%
GBP/USD            +1.188%
AUS/USD            +2.32%
CAD/USD            +1.58%        

S&P 500 E mini:

For the week, the S&P 500 E mini gained 29.60 points. The Commitment of Traders Report showed that in the leveraged funds category, speculators added 67,463 contracts to their long positions and also added 37,426 contracts to their short positions. As of the latest report leveraged funds are short by a ratio of 2.29 to 1.

On Friday, the S&P 500 cash index closed at 1362.16. Although the index closed above the pivot point of 1353.43 on the intermediate term chart, for a buy signal to be generated, the low has to be above that pivot point. On Friday, the market was unable to pierce the June 19 high of 1363.46, and the next significant highs are the May 10 and 11 highs of 1365.88 and 1365.66 respectively.

For a buy signal to be generated on the S&P 500 cash index short term chart, the low of the day must be above the pivot point of 1341.84, which is approximately 20 points lower than the close on Friday, and is close to the 50 day moving average of 1340.21.

If a short and/or intermediate term buy signal is triggered, a sharp pullback is likely to occur before it would be safe to enter on the long side. However, I am suspect of a continued move higher and question whether it merits the risk.

Last year, the rally in the S&P 500 cash index began on June 27 and continued through July 7. Ahe range was from 1267.53 to a high of 1356.62 omn July 7. 1356.62 was the high watermark for the month of July 2011.

The performance of the September S&P 500 E mini for June was +4.15%. This was the best performance since 1999, when the E mini appreciated 5.45%. Below, I am listing the best performing June rallies from 1983 to the present. Additionally, I am providing the subsequent performance for July.

Month   Year  Performance                      Month    Year    Performance
June        1983  +4.01%                                     July          1983      -3.91%
June        1987   +4.03%                                    July          1987     +5.26%
June        1988   +3.95%                                    July          1988     -0.89%  
June        1997   +3.57%                                    July           1997    +7.49%
June        1998   +3.63%                                    July          1998     +0.25%
June        1999   +5.45%                                    July          1999     -3.63%
June        2012    4.15%                              Cumulative 6 Yrs  +4.57% 

6 Year Average Performance for July: +0.76%     

Apple Computer:

On April 29, in the Weekend Wrap, I wrote about the reasons why I thought Apple had made a temporary top. On the weekend that I posted my analysis, Apple had closed at $603.00 and since that post, the stock has never been above it. Since April 29, Apple has not generated a short-term buy signal, but has come close to it a couple of times. When it has, I have alerted my readers so they could be prepared to take action. As of Friday’s close, Apple is right on the cusp of generating a short-term buy signal. If  the low on Monday is above $584.52, a short-term buy signal would be generated. Since Apple is already on an intermediate term buy signal, this would act as confirmation of a move higher and a possible retest of the April 10 high of $644.00.

Conclusion:
If Apple generates a short-term buy signal, regardless of whether the S&P 500 cash index generates a short and/or intermediate term buy signal, the preferred play in my opinion would be a long position in Apple instead the S&P 500 Index.

Global Markets:

This past week, the Hong Kong Hang Sang Index’s 50 day moving average crossed below the 200 day moving average. Below, are markets that have already experienced the 50 day moving average cross below the 200 day moving average. This is another reason to be cautious on the U.S. market because in my view, U.S. equities market will not decouple from the global markets. Although Bill Gross of PIMCO has correctly said the U.S. is the cleanest dirty shirt. Investors should continue to be cautious, especially with onset of earnings season and the U.S. Employment Report to be released on July 6.

Australia All Ordinaries Index
Japanese Nikkei 225
London FTSE 100
Bombay Sensex 30
French CAC 40
Brazilian Bovespa
Shanghai composite Index
Italy FTSE MIB
Spain Ibex