Futures Trading Newsletter , Bi-Weekly Investment Outlook #502
FuturesCom Futures Trading Newsletter Saturday June 18 2016. SP500 and Equity Indices • Bonds • Currency Trading • Forex • Precious Metals • Energy • Grains • Livestock • Coffee • Sugar • Cocoa • Cotton. for a Free Two Week trial to our Futures Trading Newsletter see https://futurescom.com/free-trial-2
Among the hazards of speculation the happening of the unexpected -I might even say the unexpectable- ranks high. There are certain chances that the most prudent man is justified in taking – chances that he must take if he wishes to be more than a mercantile mollusk–” – Reminiscences of a Stock operator-
Saturday June 18, 2016
8:00 PM, South Florida Beach Time
Geo-political risks remain high. Traders should stay nimble expect wide movements in all markets. Stay tuned for flashes, updates and additional recommendations.
Analysis for global equity, foreign exchange and commodity markets not covered today are available upon request. For cross-country or country-by-country analysis for trading and hedging, please call or email a request.
Janet Yellen will provide testimony on monetary policy and the state of the economy before the Senate Banking Committee on Tuesday and in front of the House of Representatives on Wednesday. The U.S. political season is likely to be a very turbulent one.
The United Kingdom will hold the vote on Thursday to decide to stay in the European Union or leave. The European Union extended sanctions on Russia. In the meantime, Russia is bombing U.S. supported forces in the Syrian conflict. Brazil is facing numerous issues ahead of the Olympics.
Some of them are general funding and some Zika virus related. Brazil’s Government officials are desperately trying to get ‘things’ in order. Meanwhile officials told women not to get pregnant.
Dr. Anne Schuchat, the Center of Disease Control’s (CDC) deputy director, said in an interview. “The summer is starting, and the mosquitoes are coming.” She said referring to the Zika virus carried by mosquitoes. The pests that carry the virus bite during the day. She also said “We know that Zika is a completely unprecedented problem and the front-line response is going to be crucial,”. U.S. health officials have said that infections by the mosquito-borne Zika virus in pregnant women can cause microcephaly, a rare birth defect marked by small head size that can lead to severe developmental problems in babies. The World Health Organization (WHO) has said there is strong scientific consensus that Zika can also cause Guillain-Barre (GBS), a rare neurological syndrome that causes ‘temporary’ paralysis in adults. GBS has a cousin called CIDP, CIDP is ‘chronic’ and is considered lifelong.
U.S. stock markets remain in the same broad trading range. The SP500 is pretty much unchanged on the year depending on which way the wind blows. Japan and Germany are all at the same level as they were 2 years ago. The U.K. is lower and under the 2000 peak. China is at essentially the same level as July 2009. Interest rates are below zero in many developed nations.
The Federal Reserve and other central banks generally try to mitigate the downside of business cycles, now the business cycles have essentially flattened out at low levels (if that in some countries).
During a recent interview Raghuram Rajan, governor of the Reserve Bank of India, said. ‘is it possible that consumption behaves perversely with respect to interest rates beyond a certain point?” He further said, “this is the point that a number of people have been making, which is if I push interest rates below a certain point, the income effects start becoming greater than the substitution effects. The usual point is I push down interest rates — I say, “wow, it is better to consume now than to save,” and I consume. But what if I have an end-of-life goal in terms of savings and I push down interest rates really low and I say “wow, I really can’t meet my savings goal. I am going to be on the streets when I am old, so I better save some more.” That is the perverse effect of low interest rates.”
The U.S. dollar index remains lower on the year. Euro (EUR/USD) has resistance at 11300 to 11360 and 11640 to 11690. Support is now 11155 and 11010 to 10960. (GBP/USD) British Pound futures are near multi-year lows. Cable is likely to trade with a very wide range before and after the June 23rd vote on separation from the European Union (Brexit). Retail forex houses are raising margins on Cable ahead of the vote.
Cable has support near 14210 to 14150 and 13830 to 13770. Resistance is near 14530 to 14590 and 14840 to 19460. USD/CAD (Canadian Dollar) continues to trade with high volatility but in a fairly narrow range. Support is near 12740 to 12680 and 12380 to 12320. Resistance is now 13040 to 13100 and 13340 to 13460. The USD/CAD tends to drift higher after mid-July. Futures do the opposite.
Dollar Yen fell. We said over the previous several Bi-Weekly Outlook’s the Dollar-Yen long term charts are turning down. Resistance is at 10580 to 10680 and 10820. Support at 10360 to 10320 has been tested. Failure augurs for a test of 10136 to 10120. Typically, USD/JPY tends to flatten out now and then soften for a bit, with lows for the year ahead of us not behind us.
The Aussie and Kiwi are trading affairs. China’s Yuan continues to push against resistance at 6.591, beyond that a trade towards 6.659 to 6.673. is likely, support is near 6.509 to 6.486.
Precious Metals; Gold and silver are both getting a lot of attention and are trading in a wide range against our numbers both up and down. Silver tends to have lower prices in front of the market until the fall. Copper fell and bounced. Copper tends to act better into July. Long term it is still a mess.
Energies; Crude Oil and the products continue to trade in wide range. Unleaded continues to act badly.
Natural Gas acts better and is near the same level as a year ago. Stay tuned for flashes and updates.
Soybeans and Corn are weather markets. Corn highs for the year usually occur during this time frame.
Wheat rallied and fell back. Wheat tends to make the lows for the year in late July or even August, for now wheat is a trading affair. Late June and July is usually not kind to Soybean Oil. Sell a rally, we missed selling by a little during our previous Bi-Weekly period.
Livestock; the U.S. Department of Agriculture is scheduled to release the monthly Cattle on Feed, Quarterly Hog inventory and monthly Cold Storage report on Friday June 24th.
Live Cattle futures are trading near contract lows and hog futures near contract highs. Neither are near all-time lows or highs. Both continue trade in wide ranges.
Stay tuned for livestock updates and flashes
Soft Commodities; Coffee rallied on frost fears. Sugar continues to act better on the global supply deficit, it also went up on frost fears. Traders can buy October on dip for a trade, Sugar typically trades firm into the middle of July. After that all bets are off and one should be shorting. Cocoa and Cotton are trading affairs and are trading in wide ranges. We want to sell a rally in Sept or December Cocoa.
Traders should remain nimble and stay tuned updates and flashes. Contact our office if you need long or short term analysis for global equities, foreign exchange markets or commodities not covered today.
On to the Nitty Gritty.
THE SENSATIONAL STOCK AND BOND MARKET
DOW JONES INDUSTRIAL AVERAGE Support is at 17,380.00 to 17,310.00 and the 16,960.00 to 16,890.00 region.
Resistance is at 17,800.00 then 17,940.00 and the 18,080.00 to 18,220.00 region.
DOW JONES TRANSPORTS
Support should appear near 7513.00 to 7486.00. Below that buyers should appear near 7342.00 to 7328.00 and the 7088.00 to 7064.00 region. Resistance should appear near 7763.00 to 7777.00 then 7939.00 to 7954.00 and the 8029.00 to 8044.00 region.
SEPT E-MINI SP500
Resistance should appear at 2107.50 and the 2126.00 to 2134.00 region. Beyond that a test of 2170.00 to 2185.00 is likely. Sellers should appear near 2219.00 to 2226.00
Support should appear near 2042.00 to 2034.00, a close under augurs for a test of 1996.00 to 1982.00 and the 1953.00 to 1946.00 region. Traders should go short if a close under 2033.75 occurs.
NASDAQ COMPOSITE
Resistance should appear 4845.00 to 4856.00 and 4915.00 to 4926.00. Beyond that sellers should appear near the 5056.00 to 5067.00 region.
Support should appear near 4717.00 to 4695.00 and the 4582.00 to 4571.00 region.
SEPT E-MINI NASDAQ 100
Support should appear near 4315.00 to 4304.00 and the 4183.00 to 4163.00 region.
Resistance is at 4425.00 to 4446.00 then 4571.00 to 4582.00 and the 4639.00 to 4650.00 region.
SEPT E-MINI RUSSELL 2000
Resistance should appear near 1164.00 to 1169.00 and the 1192.00 to 1203.00 region.
Support should appear near the 1101.00 to 1096.00. Below that traders should not be surprised to see a trade towards 1068.00 to 1058.00 occur.
SEPT 30 YR BONDS
Resistance should appear near 171-07 then 173-07 and 173-21. Which should cap a rally.
Support should appear near 168-07 and 167-21. Below that 165-21 and 164-07 should hold.
SEPT 10 YR NOTES
Resistance should appear near 132-17. Beyond that sellers should appear near 133-21 and 134-07.
Support should appear near 130-07 and 129-21. Below that buyers should appear near 128-21.
THE FRENZIED FOREX FRONT
SEPT DOLLAR INDEX
Resistance should appear near 9526 to 9542, beyond that a test of 9625 to 9641 is likely. Sellers should appear near 9706 to 9737. Nearby support should appear near 9347 to 9316 and 9237. Below that buyers should appear near 9156 to 9140.
SEPT JAPANESE YEN
Resistance should appear 9706 to 9737 and the 9921 to 9937 region. Support should appear near 9542 to 9526 and the 9445 to 9429 region.
SEPT EURO CURRENCY
Support should appear near 11155. A close under augurs for a test of the 11010 to 10960 region. Resistance should appear near 11360 and 11500. Beyond that sellers should appear near 11640 to 11690. SEPT SWISS FRANC
Resistance should appear near 10580 to 10680 and 10960 to 11010.
Support should appear near 10360 to 10302 and 10136 to 10104.
SEPT BRITISH POUND
Support should appear near 14210 to 14150 and the 13830 to 13770 region. Below that a test of 13460 to 13340 is likely. Resistance should appear near 14530 to 14590 and 14712. Beyond that sellers should appear near 14840 to 14960 and the 15290 to 15350 region.
SEPT CANADIAN DOLLAR
Resistance should appear near 7777 and the 7836 to 7864. Beyond that sellers should appear near 7939 to 7954 and 8029.00 to 8044. Traders who ‘sleep on a bed of nails’ can sell at 8027 and risk a close over 8052 for three days in a row.
Support should appear near 7689 to 7675 and 7601 to 7587. Below that 7428 to 7414 should hold.
SEPT AUSSIE DOLLAR Resistance should appear near 7414 to 7428 and the 7486 to 7513 region.
Support should appear near 7342 to 7328 then 7290 and the 7255 to 7240 region.
THE PRECIOUS METALS
AUGUST GOLD
Resistance should appear near the 1304.0 to 1310.0 and 1334.0 to 1346.0
Support should appear near 1274.0 to 1268.0 and the 1238.0 to 1232.0 region.
SEPT COPPER
Resistance should appear 21260 to 21340 and 21700 to 21850. Support should appear near 19960 to 19820 and 19090 to 19020.
SEPT SILVER
Support should appear near 1738.0 to 1731.0 and 1696.0 to 1689, below that a test of the 1655 to 1642 is likely.
Resistance is at 1774.0 to 1780.0 and the 1808.0 to 1822.0 region. Beyond that sellers should appear near 1858.0 to 1865.0 and cap a rally.
THE EXCITING ENERGIES
AUGUST CRUDE OIL
Support should appear near 4785 to 4775, a close under augurs for a test of 4650 to 4639 and the 4582 to 4571 region.
Resistance should appear near 4887 then 4915 to 4926 and 5056 to 5067
SEPTEMBER CRUDE OIL
Support should appear near 4856 to 4845 and 4717 to 4695. Resistance should appear near 4915 to 4926 and 5056 to 5067 and 5127 to 5139 AUGUST BRENT CRUDE OIL
Support should appear near 4785 to 4775 and the 4717 to 4695 region. Resistance should appear near 4973 to 4995 and 5127 to 5139
AUGUST HEATING OIL
Support should appear near 14590 to 14530, below that a test of 13830 to 13770 is likely.
Resistance should appear 14960 then 15290 to 15350 and 15690 to 15760.
AUGUST UNLEADED GAS
Support should appear near 14960 to 14840. A close under augurs for a test of 14590 to 14530 and the 14210 and the 114150 region. Traders should go short if a close under 14837 occurs.
Resistance should appear near 15290 to 15350 then 15690 to 15760 and the 16090 to 16150 region.
Traders can sell at 16090 and hold for lower prices.
AUGUST NATURAL GAS
Support should appear near 2620 to 2612 and the 2568 to 2552 region. Below that 2469 to 2461 should contains a decline.
Resistance should appear near 2716 to 2724 and the 2820 to 2829 region. Beyond that sellers should appear near 2874 to 2883 and cap a rally.
THE GRANDE’ GRAINS
AUGUST SOYBEANS
Support should appear near 1150 then 1136 to 1130 and 1101 to 1096. Under that 1068 to 1058 should hold.
Resistance should appear near 1164 to 1169 the 1192 to 1203. Beyond that sellers should appear near 1232 to 1238.
NOVEMBER SOYBEANS
Support should appear near 1136 to 1130 and 1068 to 1058.
Resistance should appear near 1164 to 1169 and 1192 to 1203.
AUGUST SOYOIL Support should appear near 3157 to 3148 and the 3045 to 3036 region.
Resistance should appear near 3261 to 3270 and 3319 to 3328. Beyond that sellers should appear
near the 3425 to 3443 region. BW Traders can sell at 3317 and hold for lower prices.
AUGUST SOYMEAL
Resistance should appear near 411.0 to412.0 then 416.3 to 418.3 and 423.8 to 424.9. Beyond that sellers should appear near the 437.0 to 438.1 region.
Support should appear near 392.9 to 390.9 and 386.7 to 385.8. Below that buyers should appear near 368.2 to 366.3. Pick your poison.
SEPTEMBER CORN
Support should appear near 438 ¼ to 438 and the 418 ¼ to 416 ¼ region.
Resistance should appear near 450 ¼ to 451 ¼ and 457 ¼ to 458.
SEPTEMBER WHEAT Support should appear near 485 ¾ to 484 ½, a close under augurs for a test of 471 ¾ to 469 ½
Resistance should appear near 505 ¾ to 506 ½ and the 512 ¾ to 513 ¾ region.
Stay tuned for Grain updates and flashes.
THE LIVELY LIVESTOCK
AUGUST CATTLE
Support should appear near 11010 to 10960 then 10890 and the 10680 to 10580 region. Resistance should appear near 11300 to 11360 then 11500 and the 11640 to 11690 region.
OCTOBER CATTLE
Support should appear near 11010 to 10960 then 10890 and the 10680 to 10580 region.
Resistance should appear near 11300 to 11360 then 11500 and the 11640 to 11690 region.
JULY HOGS
Resistance should appear near 8667 to 8682 and 8762 to 8777
Support should appear near 8502 to 8482 and the 8317 to 8300 region.
AUGUST HOGS
Resistance should appear near 8932 to 8967 and the 9042 to 9067 region.
Support should appear near 8777 to 8762 and the 8682 to 8667 region.
THE SATISFYING SOFTS
SEPTEMBER COFFEE
Resistance should appear near 14840 to 14960. Beyond that sellers should appear near 15290 to 15350 and cap a rally. Support should appear near 14210 to 14150 and 13830 to 13770. A close under is negative and augurs for a test of 13100 to 13040. Aggressive traders should go short if a close under 13765 occurs.
SEPTEMBER COCOA Support should appear near 2937 to 2928 region, below that as test of 2883 to 2874 is likely. Resistance should appear near 3036 to 3045 and the 3092 to 3102 region. Beyond that sellers should appear near 3148 to 3157. Traders can sell at 3147 and risk a close over 3167 for three days in a row. OCTOBER SUGAR Resistance is near 2080 to 2089 and 2126 to 2134 region. Beyond that sellers should appear near 2170 to 2185 and 2219 to 2226. Support should appear near 1953 to 1940 and 1909 to 1902. Traders can buy October at 1912 and risk 25 points. DECEMBER COTTON Support should appear near 6509 to 6483 and 6430 to 6417. Below that buyers should appear near 6350 to 6337 and contain a decline. Resistance should appear near 6659 to 6673 and the 6743 to 6755 region. Beyond that sellers should appear near 6809 to 6836 and cap a rally
Stay tuned for Flashes and Updates in all Markets
–A Ship in Harbor is Safe…But that is not what ships are built for –
Happy Trading!
Bill wil@futurescom.com
Sunday June 19, 2016 10:00 AM South Florida Beach Time
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