Futures Outlook: Gold, Cotton, Soybeans and T-Notes

Lindsay Hall  |

Futures Outlook for the Week: 01/22/2013

This week, post-holiday, I would like to focus on Gold, Cotton, Soybeans, and T-Notes. A bit of a mixed bag, most of which could present for longer term potential.

Let’s begin with Gold. If you look at the chart on the Month for Gold February 2013 COMEX contracts, we have a decent range that needs to be broken.
If it breaks to the upside, it would be beneficial to see the 1920’s broken. On the low end, should Gold break down, I would like to see 1525 broken well to confirm. Thus far Gold’s upward trend does not seem to be broken. The retracements and consolidation are healthy for the Gold market in general. These “breath marks” along the way can help sustain the overall trend.

Over the next number of days, pay close attention to the 1700 level via some of your smaller charts and your Daily chart. If Gold can break 1700 then you might have a good shot at the next round of momentum which could potentially test those 1920’s I mentioned earlier.
Make note of some of the major levels of resistance and support for Gold and look for opportunities that present. Keep in mind that you can also trade between the ranges, but you have to remember what can happen if you trade against the trend and the trend comes back to play via a breakout.

Moving from Hard to Soft, let’s consider Cotton for the next couple of weeks. Cotton has been ranging between 80 as a ballpark on the high side and the 69 territory on the low end of things.

As it has been a bit range bound and we’ve seen a bit of an effort for it to rally, I personally would like to see it rally and break through the 80 level. Keep an eye on the Daily and Weekly charts for the potential break.

As illustrated in the Weekly chart, I would like to see this range be the area that puts a bottom in this market near term and allows a continuation of recent bullish activity. We’ll have to wait and watch to see if it comes to fruition.

With Soybeans, I would keep an eye on the Monthly chart. Watch to see whether or not we build a head and shoulders pattern here that would allow bearish plays on Soybeans. If this develops, then it could end up breaking the trend. There might be a lot of activity in the interim, so this might require some patience.

Now this one, has truly long term potential, and is something that everyone should consider. If you have any inclination that interest rates will be raised over the next number of years you should be paying attention to these charts and opportunities.

I am looking for a failure long term in the T-Notes market and options can be a great way to take advantage of this type of move should it develop well for us.

The Weekly chart is currently resting on a support territory that used to be a resistance level.

Keep an eye on this chart in particular to see if it can break down this boundary.

Should the Weekly chart break down and allow the Month to cave in, then you would be looking at a lot of potential should we break the trend line on this chart.

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