As anxious global markets await the results of Tuesday's election results, market participants will be adjusting their plans to the outcome.
Market moves could be aggressive or restrained. Market participants at this point must expect the unexpected, according to Bobby Coats, professor in the Department of Agricultural Economics and Agribusiness, University of Arkansas System, Division of Agriculture.
Dr. Coats wrote the following to go with the accompanying charts for the Delta Farm Press. The charts are available at the bottom of this page.
Charts 1 - 2. $UST10Y - 10-Year US Treasury Yield
- Caution is advised for the week beginning November 7, 2016, since “Event Risk” could take yields lower.
Charts 3 - 4. Soybeans
- Given uncertainties associated with the week of November 7, 2016 I remain more concerned about additional price weakness and the culmination of a bottoming process.
- From a technical perspective, considering global risks and uncertainties and required intervention activities argue a price bottom is in place.
Charts 5 – 6. Corn
- Near term bottoming process underway with a possible low in the $3.00 per bushel area.
- Bottom in place and upside consideration to $4.15 per bushel.
Charts 7 - 8. Rice
- A bottoming process is underway.
Charts 9 -10. Cotton
- Corrective price action underway with possible price weakness to the bottom of the Weekly Bollinger Bands on the weekly chart.
- Bullish prices likely beyond this corrective price activity.
Charts 11 - 12. Wheat
- Forming a price bottom
- Price weakness into the $3.80 area a possibility.
Charts 13 - 14. Copper
- Copper price action the last 2 weeks was encouraging, but prices likely need to make a final low before turning bullish.
Charts 15 - 16. $WTIC
- Defining a trading range.
- OPEC guidance likely defines price low.
- Global uncertainties supportive of prices.
- Challenging market.
Charts 17 - 18. CRB Index
- Near term corrective price action before moving higher.
- The bottom is in place.
Charts 19 - 20. Power Shares US Dollar Index
- Dollar consolidating gains.
- U.S. election uncertainties could give the dollar more strength than weakness this week.
- Global interventionist government and Central Bank activities will define dollar strength or weakness over the next 3 to 12 months.
Charts 21 – 22. Australian Currency
- Consolidating, coiling price action indicating a major move ahead.
- Generally a weakening Australian currency implies weakening demand for their commodity based economy and vice-versa.
- Near term I am neutral but longer term my bias is to the upside.
Charts 23 – 24 British Pound Sterling Trust
- An obvious weak currency.
- BREXIT implied the United Kingdom must retool politically, economically, and socially.
- The currency weakness is a plus for revitalizing their economy.
- Bottom is likely not in place.
Charts 25 - 26. Canadian Dollar
- Lack of demand for Canada’s resource sector currently weighing heavy on this market.
- Near term bearish indicator for their commodity prices.
- This is a market defining a bottom.
Charts 27 - 28. EURO Trust
- European Union economic weakness and political and social uncertainty problematic for EURO, but near term emerging inflationary forces are supportive of EURO and provide DOLLAR relief.
Charts 29 – 30. Japanese Yen Trust
- Dollar shows strength, while the Yen shows weakness, and vise-versa.
- With the DOLLAR likely in a consolidation period be respectful of currency dynamics in general.
Charts 31 – 32. SPDR S&P 500 ETF
- Political and other potential “Event Risk” could move this market lower near term, so let price dynamics define price direction.
- Revisiting the bottom weekly Bollinger Band and potentially lower.
Charts 33 - 34. QQQ NASDAQ Power Shares
- Consolidating, assume an election impact.
- Price uncertainty near term, so be respectful until price direction is further defined.