wmeubank@ocp.kcmo.com
COMMODITY REVIEW AND OUTLOOK
195 Route 6A, Suite 6,
Orleans, Massachusetts
(June 11, 1997) METALS: COPPER--Seasonals support lower prices, but
recent forecasts that have removed much of the projected surplus
production are bullish, and may provide support on dips. If there
are any production problems, copper could stage a good rally.
However that's longer term, and may not materialize until later in
the year. China's absence is negative, but they are anticipated to
re-enter the market later in the year.
RECOMMENDATION--Resistance lies near 120.40 or so. July copper has
a constructive look to the charts at this time. Bulls should wait
for a decline to near 115.50-114.90. Taking out 114.90 is bearish
and suggest further downside to perhaps as low 112.00 or so. Look
for support to develop near 113.50. Option traders should stand
aside for now.
GOLD--It is conceivable that the problems that seem to be arising
regarding the EMU will provide support to gold, either from
concerns that some currencies do not have the integrity once
thought, or from ideas that central bank selling will not be as big
a threat. Some support has come from carryover buying from the
platinum group metals, but I would be cautious in viewing that
support as solid.
RECOMMENDATION--August gold is still trading in range-bound
fashion. There is resistance near 352, 354-355, and as 360 is
approached, with buying seen in the low-mid 340's. Bullish traders
could buy August gold in the mid-low 340's, and/or sell August gold
on rallies to the 352-354 level, looking for a decline back to the
mid-low 340's. Use stops of 2-3 dollars. Most traders should stand
aside. If you're a long-term bull, consider October or December
calls, as they are relatively cheap due to low volatility.
SILVER--Another restful week in the silver market.
RECOMMENDATION--Most traders should stand aside or trade the range.
Range traders should consider buying July silver on dips to the
mid-low 460's with stops of 5-10 cents, looking for a rally back to
the low-mid 480's, and selling July silver in the 480's with stops
of 5-10 cents, looking for a decline back to the low 470's, mid
460's. If you're bullish, buy a pullback to the 460's with stops
under 460. Objective is open.
M. Steven Morgan
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