Financial Markets Summary
Tuesday, July 7, 2015
- Oil suffered a 7.70% drop yesterday while breaking its short term support level. The price of oil had been in a sideways pattern since early May. During that period, the price of oil traded within a range of $56 - $62 a barrel. It closed yesterday at $52.53.
- The intermediate and long term trends were already in defined downtrends, while the short term appeared to be at the beginning of a trend change from downwards to upwards. The breaking of support doesn’t nullify that from happening, but it does raise the possibility that oil might first need to test the February lows just under $43 a barrel.
- Gold is in a defined short, intermediate and long term downtrend. The recent weakness in gold is also making it look more likely that it will retest the recent March low near $1140 an ounce. It closed yesterday below $1169.
- The U.S. dollar recorded a recent low on May 14 followed by a higher low on June 18 and again on June 29. A move above the recent high on May 27 would move the dollar back into an uptrend.
- The yield on the ten year U.S. Treasury note has traded in a range during the past two years. The high yield was 3.04% and the low yield occurred at 1.61%. The yield closed at 2.28% yesterday in the middle of the two year range.
- Corn, wheat and soybean prices rallied during the past three weeks. Prices reacted to news that potential damage to crops could occur due to too much moisture. Any damage to the crops would result in a lower supply, which would increase the price. Keep in mind that this is a seasonally strong period for the grains and many times the year’s highs are recorded during this period.
- Real estate, in general, remains attractive especially in the intermediate and long term time frames.
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.