The Yen made a profitable quick breakout higher hitting our exit target at 9158 on the 7th.  After a weak Japanese GDP report, the Yen fell right back to its breakout zone with key support in the 9060’s basis June &  9100 basis the September contract (September will be the lead contract next week). 9300 basis September contract is still likely until 9100 support fails.

Our December Corn trade has been pending for weeks and finally broke out with a quick rush to our first target at 404. The 409 to 412 zone is the maximum short term target area as the weather begins to influence prices with the onset of the first hot and dry spell arriving this weekend. A move above 413 would portend a test of 430 later this month. With plentiful supply, Ags will need hot and dry conditions along with a weaker Dollar to sustain this new up cycle.

Financial markets await the results of the FBI-Comey testimony and UK elections before giving a possible green light to another leg higher in stocks. Should stocks break out further to the upside, the S&P 2460’s to 2480’s would be our final target zone expected during the 1st 3 quarters of 2017. Correction risk is rising and any new round of technical stock market sentiment extremes this summer will be more important than normal.

Industrial metals and Oil remain weak, signaling a lack of new economic data to stimulate animal spirits. Further price weakness is expected. Anecdotally we are seeing 2-year highs in order flows from our industrial machine partnership in the first signs of a pick up with new orders to be shipped in early 2018. This implies that commodity weakness should be temporary.

Our short term hypothetical trading model has moved back up to about 40% gains for the year to date.

06-05-17

Yen is breaking out higher as expected. Short term this will hurt stocks until the Yen finishes its leg up.  A stronger Yen hurts the “carry trade” that funnels money into stocks in the US and around the world