Shore Capital Management LLC

The corn market (basis December) peaked on 6/2/09 at $4.7350.  We were targeting $3.08 as a bottom in the corn market. On 7/22/09 the market made new lows at $3.1475. Due to the "cooler idea" summer weather potential for high yielding crop production, the corn market has been pressured to the downside. However, last week the USDA stated they were going to resurvey a number of corn states for a better idea of acreage. The thinking is that it will reduce the previously reported crop production estimate. This could cause corn to remain in a trading range for the next few weeks.

There is another side to the "cool ideal" growing weather. This could lead to an early freeze? Some are beginning to think there is a possibility for an early freeze. If so, we could be looking at a lower crop yield that would be bullish for the market.

Its always been said the two most powerful components to the grain market are weather conditions and exporting. If the world economy proves itself to start moving forward as the equity markets are currently perceiving, this could also be bullish for the market as more corn is exported.

On the upside the initial resistance is $3.28 to $3.33. If it breaks above this range, the next resistance level is $3.36 to $3.45. There is a major resistance at $3.60 to $3.69

The initial support level is $3.25 to $3.21. If the market breaks this level it will probably test the lows of last week.

The December wheat contract peaked on 6/1/09 at $7.2525. On 6/3/09 we received a longer term sell signal. By 7/7/09 the market had bottomed at $5.38 and has slowly tried to push higher as it appears to be building a base. This can also be seen in the corn and soybean markets. If the economy should prove to be stabilizing and recovering, the grain markets may find support in this situation. On 7/13/09 we received a new longer term buy signal.

The first resistance level is $5.78 to $5.83. If the market continues upward the next level of support is $5.96 to 6.08.

An initial support level is found at $5.70 to $5.64.

This past week the equity markets could be nicknamed "going back to the future". The earnings season is now underway and several companies are beating market expectations. The July Empire State Manufacturing Survey index was the best in a year nearing zero at -0.55 from the June report of -9.41. As the index moves into positive territory, it implies an expansion of manufacturing in the NY area.

The S&P futures (basis Sept) topped out on 6/11/09 and spent the next several weeks moving lower. On 6/16/09 we received a longer term sell signal for this market. On 7/11/09 the market found a bottom and we received a longer term buy signal on 7/15/09. Some have questioned whether this past week is a short covering rally as it has moved up on light volume. We believe the market has legs to hold itself, but may find some consolidation before moving forward.

There is an initial resistance in the 942 to 947 range. If this level is broken the next level of resistance is 952 to 957.

If the market should consolidate we believe there is support in the 934 to 930 area. The next level of support is 926 to 923.

On 6/11/09, the DJ (basis September contract) peaked and has slowly been grinding downward. The last few days the market has been testing the May lows. In the final hours of trading today, the market began to recover from its sell off. During the final minutes of trading we did receive a short term long signal within a longer term sell signal.

There is major resistance around 8250 to 8280. If the market can hold this area the next resistance area is 8350.

If the market should continue lower the next support level is 7960 to 7850. This would take us back to the price levels of late April.

The Canadian dollar peaked on 6/1/09 at 92.75 (basis September contract).  On 6/5/09 we received a longer term sell signal. As the C$ peaked, we saw commodities peaking out soon after in early to mid June.

Currently the C$ appears to be basing, but it could be a short term correction before making the next move downward.

If the market breaks below 85.51, then the next support level would be 84.31.

If the market holds the current level, the initial resistance level is 86.23 to 86.50

Since the beginning of May the equity markets have been caught in a trading range. And since May, many have called for a consolidation of the equity market as the market quickly became overbought. There has been a debate whether the consolidation would be a consolidation of pricing or would it be a trading range, thus creating a temporal consolidation until the economy catches up with the market. Up to this point the consolidation has been temporal as the market has moved sideways.

Basis the September S&P futures contract, the market peaked on June 11th. Currently the market is testing the lows of May. We had an initial target of 878 and the market is near it.

If the market continues to sell off , the next support level is 868 to 859. If that breaks we could see the Sept contract in the 844 to 828.

If the market should start to rally, we see initial resistance around 890 to 905.

NYSSA’s Institutional Asset Management Committee presents
Independent Research Uncovered
Wednesday, July 22, 2009 | 5:30 p.m.–8:00 p.m. | NYSSA

The Global Research Analyst Settlement expires for 10 of the 12 banks at the end of July. The New York Society for Security Analysts will be hosting  a lively panel discussion by accomplished individuals in the independent research field as they discuss and forecast this growing business model. Some of the questions covered will be:

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“An Evening of Cocktails and Trading”

Presented by

Fusion Business Group and Prime Executions, Inc.

Wednesday July 15th 2009

5:15pm –7:30pm

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The New York Society for Security Analysts will be hosting:
Market Forecast: The Economy and Markets at the Crossroads

DATE:
Tuesday, August 4, 2009
TIME:
11:30 a.m.–2:00 p.m.
LOCATION:
NYSSA
1177 Avenue of the Americas, 2nd Floor
(between 45th and 46th Streets), NYC

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For those interested in the behavioral and psychological aspects of trading and research, you may find some interest in the CME Group’s July 15th event.


The Psychology of Risk Decisions:

Denise K. Shull M.A., President of the consultancy Trader Psyches Inc., will outline more effective ways to accurately perceive, evaluate and judge market and trading risks. “The Holy Grail lies in systematically integrating qualitative data into the framework of quantitative and algorithmic based trading strategies”.
 
Wednesday, July 15, 2009
5:00pm-6:00pm ET Presentation
6:00pm-7:30pm ET Networking Reception
In-Person Only

For more information click here