Considering that equities in this period are very shaky, Gold, which is a safe-haven asset, should be favored.Despite this, we note that, at the end of a parabolic rally, it is currently showing some signs of fatigue.
Some setups lead us to believe that, in the medium term, the march 2016 sugar future may point south decidedly.
First of all, looking at patterns (according to the Volume Spread Analysis), we can see that the last candle is an uphtrust (shooting star candle) with possible bearish implications.
If we look at the COT Index, the commercials bearish stance could confirm our guess.
The commercials have started to buy and, on the contrary, small and large speculators began selling: is a strong bearish setup.
Looking at the chart, we also notice the top has got a marked and well-know rounded shape.
As we know, this is a kind of top that many analysts consider typical of the 'market makers' activity: in this case, the continued uncertainty and ups and downs in the sugar market would have allowed the 'strong hands' to distribute high quantity of contracts without revealing too obviously their goals.
We noticed at least three strong reasons to be bearish, but remember that, as Lucretius said: "In this world nothing is certain except for a dark force that makes everything uncertain". Moreover, remember also that this is not a trade solicitation and, if you decide to trade, you do it at your own responsibility.
Looking at patterns (according to the Volume Spread Analysis), we could say that yesterday candle is a pseudo uphtrust (spinning top candle) with possible bearish implications. Today, we notice that until now the price has rejected again at the same level.
One of our preferred volume indicators - Volume Zone Oscillator - has reached an overbought level and shows a bearish divergence.
It is a further bearish clue, which could prompt us to enter short.
Remember: this is not a trade solicitation and, if you decide to trade, you do it at your own responsibility.