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May 24, 2010 (FinancialWire) (Investrend Information Syndicate) (Via Brewer Futures Group) — For our readers keeping an eye on commodities-based funds such as the ProShares Ultra Gold ETF (NYSE: UGL), the SPDR Gold Trust (NYSE: GLD), the Market Vectors Agribusiness ETF (NYSE: MOO) and the iPath Goldman Sachs Crude Oil ETF (NYSE: OIL), FinancialWire(tm) contributor, Brewer Futures Group, provides some related perspective and insight regarding the futures markets:

June Gold is trading higher this morning after high volatility and overbought conditions drove large speculators to take profits. For several weeks, gold traders had been buying the metal as a hedge against the possible collapse in the Euro, but the recent slowdown in the fall in the Euro gave speculators an opportunity to take a little bit off the table.

Last night’s renewed weakness in the Euro and concerns about contagion in the Euro Zone because of the government takeover of a Spanish financial institution is helping to drive up gold this morning.

Technically, June Gold is still in an uptrend as long as the last swing bottom at $1156.20 holds as support. Last week this market corrected into a 50% price at $1167.90 and an uptrending Gann angle at $1168.10. This morning the Gann angle moves up to $1170.10.

Based on the developing short-term range of $1249.70 to $1166.00, traders should look for a minimum near-term correction back to $1207.80 to $1217.70. The test of this area should dictate the further direction of gold. A failure in this zone will indicate a possible secondary lower-top formation.

The June E-mini S&P 500 is trading lower this morning due to the weakness in the Euro. Traders are once again taking risk off the table as they watch the possible contagion issues sweep across Europe.

Friday’s closing price reversal bottom was not confirmed overnight, leading to speculation that a correction back to at least 1060.00 is possible today.

A confirmation of the reversal by a breakout over 1088.75 will set up the market for a minimum retracement to 1113.00 to 1127.50 over the near-term.

June Treasury Bonds are trading slightly higher but panic buying has not been evident. Traders seem to be taking precautionary positions against possible panic selling in the equity markets. A hard sell-off in the stock market will likely lead to renewed buying in the T-Bonds which will lead to a re-test of last week’s high at 126’01.

If the stock indices begin a correction or if traders begin to reduce risky positions more heavily, then look for T-Bonds to drive higher because of flight to quality buying.

September Crude Oil is trading lower but still straddling the February bottom at 72.43. Additional support is being provided by a 50% price at 72.16. A break under this level will trigger a further acceleration to the 61.8% retracement level at 67.44.

Pressure will continue on crude oil if traders decide to dump risky assets. This morning’s slightly bearish tone is being triggered by weak conditions in the Euro.

Source: Courtesy of Brewer Futures Group; For more information, content and/or a preferred introduction to Brewer Investment Group, LLC and/or Brewer Futures Group, LLC, contact Investrend Communications via resources@investrend.com with “Brewer” in the subject line.

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Brewer Futures Group advises that futures and options trading involves substantial risk of loss and is not suitable for every investor. The valuation of futures and options may fluctuate, and, as a result, clients may lose more than their original investment. The impact of seasonal and geopolitical events is already factored into market prices. Prices in the underlying cash or physical markets do not necessarily move in tandem with futures and options prices. In no event should the content of this correspondence be construed as an express or implied promise, guarantee or implication by or from Brewer Futures Group, LLC, Brewer Investment Group, LLC, or their subsidiaries and affiliates that you will profit or that losses can or will be limited in any manner whatsoever. Loss-limiting strategies such as stop loss orders may not be effective because market conditions may make it impossible to execute such orders. Likewise, strategies using combinations of options and/or futures positions such as "spread" or "straddle" trades may be just as risky as simple long and short positions. Past results are no indication of future performance. Information provided in the above article is intended solely for informational purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted. For more information, content and/or a preferred introduction to Brewer Investment Group, LLC and/or Brewer Futures Group, LLC, contact Investrend Communications via resources@investrend.com with “Brewer” in the subject line.

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