Futures Trading Newsletter ‘Bi-Weekly Investment Outlook’ #466.
FuturesCom Futures Trading Newsletter Saturday January 24, 2015. 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
Saturday January 24, 2015
1:00 AM, South Florida Beach Time
Traders should continue to stay nimble With wide ranges in markets and month end just around the corner investors and traders should stay tuned for a plethora of flashes and updates to our 466th edition of our Bi-Weekly futures trading newsletter.
Stock Indices opened the year with some volatility and the interest rate environment is still zero. Seasonally the Nasdaq tends to dip into the end of January and that can last into early February. There is a lot of babble coming from all corners and its’ likely to continue. The yearly work remains positive for stocks long term, however geopolitical concerns have risen. Major support is well below current prevailing stock market levels. Most U.S stock indices are hovering around either side of unchanged on the year and Friday’s close was lackluster. Digressing here for a little bit, the demographic influences on U.S spending patterns are likely to shift a bit as the baby boomers age. What the result will be is not fully known yet. What we do know is rates are zero and government support for the economy is still extreme. Generally, the results of the European Central Bank’s quantitative easing should be supportive to some markets, right now all the money is in stocks. Longer term it may not be enough to offset the demographic shifts over the next few years. The U.S. Federal Reserve meets this week and the babble around the meeting is likely to be active. In three weeks or so traders will begin to actively trade the June 30-Year bond futures and that particular contract has some issues with deliverable Treasuries and is in the nose-bleed section of the stadium.
Forex Markets; The European Central Bank’s decision to embark on quantitative easing sent the Euro into a downward spiral Thursday and Friday. The Euro long term downside targets remain below the current trading ranges and levels. The Euro failed to hold 11360 to 11300. The next downside target is the 11010 to 10960 region. Resistance is near 11300 to 11360 and at 11640 to 11690. The Swiss National Bank Swiss removed the 1.2000 barrier it had on the EUR/CHF. The Swiss Stock market plunged the worst since the 1980’s and the U.S. Dollar collapsed against the Swiss Franc. This all occurred after last month the Central Bank said the rate was going to stay. The Swiss Stock market and economy as well as the trust in the Swiss Central Bank have gone to the dogs so to speak. The Bundesbank warned last Monday that it will have to significantly cut its inflation forecasts for 2015. Chinese stocks are experiencing lots of volatility China’s Shanghai Stock Index plunged a week ago 7.7% and then rebounded. The China’s Securities Regulatory Commission’s stopped three large brokerages from extending margin accounts to new clients for three months. Only a few years ago, China’s growth was in the double-digits. That rate of expansion has slowed substantially. China’s economic strength is crucial to the health of the global economy. Globally, the World Bank lowered its growth forecast for the world economy to 3.0% for 2015 from the 3.4% forecast it made last June.
The world bank also said China is undergoing a “managed slowdown”. According to the China Centre for International Economic Exchanges a group affiliated with the National Development and Reform Commission in China, the Chinese deposit-reserve ratio should be cut and a stable exchange rate maintained and government should expand the fiscal stimulus. In The U.K, manufacturer data from CBI showed order books expanded in January at a slower pace than December, prices slipped a bit for exports. On the other hand U.K December Retail sales growth beat expectations as lower prices encouraged more buying. Cable downside support is now 14960 to 14840 and that level was tested Friday. Below that a test of the 14590 to 14530 region is likely. Resistance is above the market at 15290 to 15350, Middle of the road selling should occur near 15125. The Bank of Canada cut rates last week and pushed the USD/CAD into our targets set forth a while back. In his press conference BOC head Poloz made comments that the time to get to full capacity was unacceptable and rates were cut. The USD/CAD (Canadian Dollar Futures targets are lower) longer term targets remain higher. The USD/CAD has nearby some support at 12380 to 12320. Resistance is now 12680 to 12740 and some sort of test of that is likely. In Japan, Dollar-Yen is trading lower on the year. Continue to look for USD/JPY to move back to a higher on the year level. The BOJ announced that it will keep the target for the BOJ monetary base as is and cut its inflation forecast for fiscal 2015 to 1 percent from 1.7 percent.
The IMF released its growth outlooks for 2015 and 2016. In the release it said that if monetary policy in advanced economies is not enough to improve growth, policy makers should use ‘other measures’. Well, I guess the only thing left may be war.
The IMF cut 2015 Japan GDP to 0.6% vs 0.8%. Bickering and babble has started in Japan about how long it will take now to reach ‘whatever’ goals policy makers set. Japanese policy makers are running out of time and fast, the current policy is not enough to offset the population loss. On the downside USD/JPY support is at the 11690 to 11640 region. The nearby resistance is 11920 to 12030 and the target on top is 12320 to 12380 with higher tests down the road. Traders should consider Yen a trading affair. Look to get long USD/JPY during a dip (Sell Yen futures on a rally). Australia’s Central Bank (RBA) has a meeting on February 3. Aussie and Kiwi longer term downside targets remain lower. Both the Kiwi and Aussie dollar are now down on the year. Sell 2 day Rallies.
Analysis for overseas equity and foreign exchange markets are available upon request. For a country by country analysis for trading or hedging using our futures trading newsletter and services please call or email a request.
Precious Metals and Energy; Gold and Silver remain weak longer term. We have said this in previous editions of out futures trading newsletter. Gold is trying to move out to the upside and so is silver. A lot of people have run to gold recently. The best time to own gold for trading purposes is around now thru February. The recent highs in silver are up against last summer’s lows. Silver is trading affair. Both Gold and Silver are higher on the year. Copper remains weak. Copper does tend to firm up a bit until early February, traders should take note of that, but it is doing a really lousy job of it.
WTI Crude Oil, Brent Crude and the products all accelerated to the downside. Friday’s close in WTI
March Crude was the lowest close to date. Heating Oil, Unleaded Gas and Natural Gas remain weak. Heating Oil typically moves lower into the end of January. Sell a rally for a trade. Unleaded gas tends to hold now, if Unleaded Gas dips to 1.0140 traders can buy for a bounce but that is still a distance away. Analysis for Energies will move to March and back now.
Grains; The grain markets are trading affairs. The USDA report on Monday January 12th was negative for Soybeans. Weather in the Southern Hemisphere is favorable for harvest and movement of Grain.
A record crop harvest in the Southern Hemisphere is over the horizon. Global stockpiles of soybeans are likely to set a record this year. Lower prices may be needed to bring buyers in.
Typically buying Soybeans in mid-February is a trade to consider. Corn acts a bit better. Farmer selling should increase if prices move up. Wheat has moved lower on record world Wheat supplies. Demand is waning for U.S Wheat. France, Ukraine and Argentina are selling wheat cheaper than U.S. exporters. France has a large inventory of wheat. E.U soft wheat exports are expected to be about 8 to 10 % higher this year. The declining Euro is helping the EU gain market share for wheat exports just as the dollar decline in the early part of the last decade helped U.S gain share in global markets. In Canada many Livestock operations were closed over the past decade because they were unable to compete. That process is likely to reverse itself somewhat with a weak Canadian Dollar. Speaking of livestock, Live Cattle and Hogs are weak. Cash hog news has been lousy. There are too many pigs around and until the industry can start to see lighter weights and Saturday slaughter the hog market will be choppy trading with a weak tone. That said, anything can happen, July hogs typically firm up from then end of January maybe early February until Mid-March. Live Cattle futures fell hard on long liquidation and now are lower on the year. Because Cattle closed down the limit Friday our work is wide ranged. There is likely to be a lot of price movement in both Live Cattle and Lean Hogs.
Consider the livestock markets a trading affair, and stay tuned for livestock flashes and updates to this edition of our futures trading newsletter.
Soft Commodities; Coffee fell as drought fears abated. Coffee needs to test 15760 to 15690 and bounce or maintain a posture right here for the long side to be relatively safe. Secondary southern hemisphere coffee producing countries are trying to ramp up production. Due to weather factors, the Brazil National Coffee Council’s crop estimate for production is near 40 million bags, down 12% from last year and down from Brazil’s official forecast of 44.1-46.6 million bags. Brazilian coffee stocks are at their lowest level in 10 years. The March 2005 high in Coffee was just under 1.40. Sugar bounced over the last few weeks then fell apart on Friday. Soft global demand and weak energy are likely to continue to pressure sugar over time. Sugar may be heading down under 14.00 for another test of the lows. Cotton set new contract lows on Friday and gave a weekend sell rule. World since cotton world inventories are at record highs. The U.S growing season is just ahead, plantings in the U.S. are expected to be lower than last year. Long term nothing has changed. Cocoa is down on the year. The Asian Cocoa Grind data was released Friday and showed a 2014 fourth quarter decline of 17 %. The Grind data is a gauge of demand. Cocoa has not produced a long term sell signal yet. If it does prices are likely to decline substantially. Onto the Nitty Gritty
THE SENSATIONAL STOCK AND BOND MARKET
DOW JONES INDUSTRIAL AVERAGE Support is near 17,380.00 to 17,310.00. Below that buyers should appear near the 16,960.00 to 16,890.00 region and contain a decline. Nearby Resistance is at 17.740.00 to 17,780.00 and the 18,080.00 to 18,220.00 region. Beyond that sellers should appear near the 18,580.00 to 18,650.00 region and cap a rally.
DOW JONES TRANSPORTS
Support should appear near 8777.00 to 8762.00 and the 8683.00 to 8668.00 region. Below that buyers should appear near 8589.00 to 8560.00 and contain a decline.
Resistance is at 9044.00 to 9060.00 and the 9140.00 to 9156.00 region. Beyond that sellers should appear near the 9,316.00 to 9,347.00 region and cap a rally.
MARCH E-MINI SP500
Resistance is at 2061.50, a close over is friendly. Beyond that sellers should appear near the 2080.00 to 2089.00 region. Beyond that resistance should near the 2126.00 to 2134.00 region, and cap a rally.
Support should appear near 2034.00, an extended trade below or close under is negative and augurs for a test of 2015.00 and likely the 1996.00 to 1982.00 region. Under that buyers should appear near the 1953.00 to 1946.00 and contain a decline. Traders can buy at 1954.00 and risk 10 points.
NASDAQ COMPOSITE
Resistance should appear at 4775.00 to 4785.00 and the 4845.00 to 4856.00 region. Beyond that sellers should appear near 4915.00 to 4926.00 and the 4973.00 to 4995.00 region. Support should appear near 4717.00 to 4695.00 and 4650.00 to 4639.00. Below that buyers should appear near the 4582.00 to 4571.00 region and contain a decline.
MARCH E-MINI NASDAQ 100
Nearby support should appear near 4249.00 to 4238.00 and 4183.00 to 4163.00, a close under is negative and augurs for a test of 4120.00 to 4110.00 and eventually the 4056.00 to 4046.00 region. Resistance is at the 4304 to 4315 region. Beyond that sellers should appear near 4370.00 to 4381.00 and the 4425.00 to 4446.00 region and cap a rally.
MARCH E-MINI RUSSELL 2000
Resistance should appear near 1192.00 to 1203.00. Beyond that sellers should appear near 1232.00 to 1238.00 and the 1268.00 to 1274.00 region. Support should appear near 1169.00 to 1164.00, below that a test of 1150.00 is likely. A close under is negative and augurs for a test of the 1136.00 to 1130.00 region.
MARCH 30 YR BONDS
Resistance should appear near 150-07 and 151-21. Beyond that sellers should appear near 152-21 and 153-07. Support should appear near 146-21 and 145-22. Below that a test of 145-07 is likely. Under that buyers should appear 144-22 and contain a decline.
MARCH 10 YR NOTE
Resistance should appear near 130-17. Beyond that sellers should appear near 131-07 and 131-22 and cap a rally. Support should appear near 127-22 and 126-17. Where buyers should appear and contain a decline. Failure there is negative and indicates a test of 125-21.
THE FRENZIED FOREX FRONT
MARCH DOLLAR INDEX
Resistance should appear near 9641 to 9625 and the 9706 and 9737 region.
Support should appear near 9445 to 9429 and the 9347 to 9316 region, which should hold.
MARCH JAPANESE YEN
Resistance should appear near the 8560 to 8589 region. Beyond that sellers should appear near 8668 to 8683 and cap a rally. Support should appear near 8484, a close under or trade under is negative and augurs for a test of 8406 to 8391 and the 8314 to 8300 region.
ARCH EURO CURRENCY
Support should appear near 11010 to 10960 failure there is negative and indicates an eventual test of the 10680 to 10580 region. Below that buyers should appear near 10360 to 10320. Resistance should appear near 11300 to 11360 and the 11640 to 11690 region. Traders can sell at 11617 and hold for lower prices. Stay tuned for Flashes.
MARCH SWISS FRANC
Resistance should appear near 11640 to 11690 then 12030 and the 12320 to 12380 region Support should appear near 11300 and 11010 to 10960.
MARCH BRITISH POUND
Support should appear near the 14960 to 14840 region. Below that a test of 14590 to 1 4530 is likely. Resistance should appear near 15290 to 15350 and 15690 to 15760. Traders can sell at 15117 and hold for lower prices. Traders should go short if a close under 14832 occurs.
MARCH CANADIAN DOLLAR
Resistance should appear near 8119 to 8134 and the 8194 to 8223 region. Traders can sell at 8192 and risk 50 points. Support should appear near 7954 to 7939 and the 7777 to 7763 region.
MARCH AUSSIE DOLLAR Support should appear near the 7864 to 7836 region. Below that a test of 7777 to 7763 is likely.
Resistance should appear near 7939 to 7954 and the 8029 to 8044 region. Traders can sell at 8027 and risk a close over 8131 for three days in a row.
Stay tuned for Forex flashes and updates.
THE PRECIOUS METALS
APRIL GOLD
Resistance should appear near 1303.0 to 1310.0. Beyond that sellers should appear near 1334.0 to 1346.0 and cap a rally.
Support should appear near 1274.0 to 1268.0. Below that buyers should appear near 1238.0 to 1232.0 and should hold.
MARCH COPPER Resistance should appear near 25110 to 25190 and 25520 to 25680 which should cap an early rally. Beyond that sellers should appear near the 26120 to 26200 region and cap a rally.
Support should appear near 23700 to 23540 and the 22260 to 22190 region.
MARCH SILVER
Support should appear near 1780 to 17740 and the 1696 to 1689 region. Below that a test of buyers should appear near 1655 to 1642.
Resistance is at 1858 to 1865 and the 1902 to 1909 region, where sellers should appear and cap a rally.
THE EXCITING ENERGIES
MARCH CRUDE OIL
Support should appear near 4514 to 4503, a close under is negative and augurs for a test of 4446 to 4425. Failure there augurs for a test of 4381 to 4370 and the 4315 to 4304 region. Resistance should appear near 4717 to 4695 and 4845 to 4849. Beyond that sellers should appear near 4973 to 4995 and the 5127 to 5139 region. Traders should go short if a close under 4417 occurs.
APRIL CRUDE OIL
Support should appear near 4582 to 4571. Failure there augurs for a test of 4514 to 4503 and 4446 to 4425. Below that a test of 4183 to 4163 is likely Resistance should appear near 4775 to 4785 and 4915 to 4926. Beyond that sellers should appear near 5056 to 5067 and the 5200 to 5211 region.
MARCH BRENT CRUDE OIL
Support should appear near 4856 to 4845. Below that a test of 4785 to 4775 is likely. Failure there augurs for a test of 4717 to 4695. Resistance should appear near 5056 to 5067 and 5259 to 5282, beyond that sellers should appear near 5344 to 5356 and should cap a rally.
MARCH HEATING OIL
Support should appear near 15760 to 15690 and 15350 to 15290
Resistance should appear 16420 to 16550 and 16890 to 16960. Beyond that sellers should appear near 17310 to 17380. Traders can sell at 17290 and hold for lower prices.
MARCH UNLEADED GAS
Support should appear 13100 to 13040 and the 12740 to 12680 region. Below that a test of 12320 to 12030 is likely and should hold. Resistance should appear near 13770 to 13830. Beyond that sellers should appear near14150 to 14210 and the 14590 to 14650 region and cap a rally.
MARCH NATURAL GAS Support should appear near 2.883 to 2.874 and the 2.775 to 2.758 region. Below that a test of 2.672 to 2.663 is likely. Resistance should appear near 2.972 to 2.990 and 3.036 to 3.043. Beyond that sellers should appear near 3.092 to 3.102 and the 3.148 to 3.157 region.
Stay Tuned for Energy Flashes
THE GRANDE’ GRAINS
MARCH SOYBEANS Support should appear near 964 ¼ to 962 ½. Below that a test of 934 ¾ to 931 ¾ is likely.
Failure there augurs for a test of the 915 ¾ to 914 region.
Resistance should appear near 982 ¼ to 983 ½ and the 992 ¼ to 993 ¾ region. Beyond that sellers should appear near 1010 ½ to 1013 ¾ and cap a rally.
MARCH SOYOIL Support should appear near 3102 to 3092 and the 3045 to 3036 region. Resistance should appear near 3194 to 3213 and the 3261 to 3270 region. Beyond that sellers should appear near the 3319 to 3328 region and cap a rally.
MARCH SOYMEAL Resistance should appear near 342.5 to 344.3 and the 349.3 to 350.3 region. Support should appear near 327.0 to 326.1, below that a test of 321.3 to 319.4 is likely
MARCH CORN
Support should appear near 374 ¼ to 373 ¼ and the 368 ¼ to 366 ¼ region. Resistance should appear near 398 ¼ to 399 ¼ and 404 ¾ to 405 ¾. Beyond that sellers should appear near 411 to 412 and cap a rally.
MARCH WHEAT Support should appear near 528 ¼ to 525 ¾ and the 506 ¾ to 505 ¾
Resistance should appear near 541 ¾ to 543 and 549 ½ to 550 ¼
Stay tuned for Grain flashes and updates.
THE LIVELY LIVESTOCK
FEBRUARY CATTLE Support should appear near 14960 to 1480 and the 14590 to 14530 region.
Resistance should appear near 15290 to 15350 and 15690 to 15760.
APRIL CATTLE
Support should appear near 14840, below that a test of 14590 to 14530 is likely. Failure there is negative and augurs for a test of 14210 to 14150, where buyers should appear and contain a decline.
Resistance should appear near 15117 and the 15290 to 15350 region. Beyond that sellers should appear near the 15680 to 15760 region and cap a rally.
FEBRUARY HOGS
Support should appear near 6837 to 6807 and the 6755 to 6742 region. Below that a test of 6673 to 6659 is likely.
Resistance should appear near 6992 to 7002 and the 7142 to 7172 region. Beyond that sellers should appear near 7242 to 7257 and cap a rally.
APRIL HOGS
Support should appear near 6922 to 6907 and 6837 to 6807. Below that a test of 6757 to 6742 is likely.
Resistance should appear near the 7142 to 7172 region. Beyond that sellers should appear near 7327 to 7342 and the 7412 to 7427 region.
JUNE HOGS
Support should appear near 7777 to 7762 and 7602 to 7587 region.
Resistance should appear near 8300 to 8317 and the 8392 to 8407 region.
Stay Tuned for Livestock Flashes.
THE SATISFYING SOFTS
MARCH COFFEE
Resistance should appear near 16420 to 16550 and the 16890 to 16960 region. Beyond that sellers should appear near 17310 to 17380 and cap a rally.
Support should appear near 15760 to 15690. Failure there is negative and augurs for a test of the
15350 to 15290 region. Below that buyers should appear near 14590 to 14530.
MARCH COCOA
Resistance should appear near 2820 to 2829 and 2874 to 2883. Beyond that sellers should appear near 29828 to 2937 and cap a rally.
Support should appear near 2724 to 2716 and the 2672 to 2663 region. Below that a test of 2568 to 2552 is likely.
MARCH SUGAR
Resistance is near 1529 to 1535. Beyond that sellers should appear near 1569 to 1576 region. Support should appear near 1496 to 1484 and 1459 to 1453. Below that a test of 1383 to 1377 is likely.
MARCH COTTON
Support should appear near 5653 to 5640, below that a test of 5577 to 5553 and the 5504 to 5492 region is likely. Under that buyers should appear near 5430 to 5418 and the 5356 to 5344 region.
Resistance is at 5792 to 5805 and the 5855 to 5880 region. Beyond that sellers should appear near 5945 to 5957 and the 6023 to 6035 region 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
Saturday January 24th, 2015 10:00 PM South Florida Beach Time
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