Financial Markets Summary
Tuesday, February 24, 2015
- After hitting its recent high on February 3 at $54.24 a barrel, crude oil has been in a general trading range between $54 - $48. Yesterday’s weakness broke the 20 day moving average that has been providing support during February, but still remained in the trading range. The short term (days to weeks) base the price of oil has been working on dates back to late December. It remains too early to tell if the base will be successful or if it will fail and lead to further declines in the price of oil.
- The long term (months to years) and intermediate (weeks to months) downward trends for the price of oil show no signs of changing.
- The U.S. dollar has been taking a breather from its eight month rally the past four weeks. The consolidation looks very similar to the pause the dollar took in October before launching back into rally mode.
- The yield on the ten year U.S. Treasury note has soared during the past three weeks. The yield, which reached 2.15% last week before declining some, has moved from support back to near an area in which significant resistance (above 2.20%) resides.
- After recording a recent high on January 23, gold has declined for three consecutive weeks. Gold has dropped nearly 9% from the recent high to yesterday’s low. Downtrends remain in effect for gold for the long, intermediate and short term with no evidence of them ending.
- Wheat and soybean prices have dropped down towards their October lows, but have managed to stay above those lows. Corn dropped back, but stayed well above the October lows. The recent decline does not provide any clarity whether the October lows will hold or not. I do think the strength or resiliency that corn is showing in its refusal to retest the lows has to be viewed as a longer term positive.
- Various housing reports for January will be released during the week. Reports have and are being looked at closely by market pundits in anticipation of a stronger housing market in the future. Real estate remains attractive. The rally from the 2009-2011 lows might have been just the first phase in a multi-year upwards cycle.
Sources: bankrate.com, bloomberg.com, briefing.com, Dow Jones News, Financial Times, finviz.com, Investor's Business Daily, marketwatch.com, seekingalpha.com, Thomson Reuters/First Call, U.S. Dept of Treasury, yahoo.com and individual company web sites and press releases. Leonetti & Associates, LLC views or opinions are as of a certain date and subject to change without notice. The material contained herein is for informational purposes only and obtained from sources we consider reliable. We make no guarantee as to its accuracy or completeness. References to specific securities and industries/sectors should not be considered recommendations to buy or sell any security or advisory service. Past performance is not a guarantee of future results.