FuturesCom Bi-Weekly Investment Outlook # 442 February 23 2014 SP500 and Equity Indices • Bonds • Currency Trading • Forex • Precious Metals • Energy • Grains • Livestock • Coffee • Sugar • Cocoa • Cotton. Free Two Week Trial see https://futurescom.com/free-trial-2
The marvel of all history is the patience with which men and women submit to burdens unnecessarily laid upon them by their governments — George Washington—
Sunday February 23, 2014
4:00 AM, South Florida Beach Time.
Traders should stay nimble and tune in for additional analysis, BW flashes, Updates and Day Trades for all markets. Many markets have continued to expand trading ranges. An economic calendar is attached to today’s letter. The G-20 met over the weekend to take pictures and promised to raise global growth over the next five years, but did not say how they were going to do it. They will meet again for more pictures in November with more plans. 
Major U.S stock averages are now mixed on the year. The NASDAQ is higher on the year and typically drifts sideways to down a bit over the next week. The Dow Jones Industrial Average, SP500 and Russell 2000 are lower on the year by a hair. The SP500 typically can firm into March and perhaps beyond into April. Buying the June SP500 after the first week of March typically shows profits into early April. Traders should use weakness this week (if it occurs) to nibble at the long side of June
Mini SP500.
Long term ‘yearly’ technical patterns for the major U.S. stock index averages such as the Dow Jones Industrial average remains friendly and are just turning bullish. Investor and trader attention will now turn to testimony by U.S Federal Reserve Chief Janet Yellen to members of the U.S Senate on Thursday.
All eyes will also continue to look at weather as a factor, economist will parse data and numbers well into summer about the impacts this winter has caused. That’s just wonderful.
The Ukraine people appear to have taken a step back from the abyss and that’s a good thing… However it is a dynamic situation and one that has been brewing for a long time.
Our forward looking analysis for overseas equities, foreign exchange markets and economies is available upon request. For more information please call or email a request.
In Major Forex Markets, Swiss Francs futures still have a tendency to back off a bit and should be considered a trading affair now. Forex Traders long Dollar Swiss remain down on the trade are likely to see higher prices ahead. Dollar-Yen rose a bit as the flight to safety abated.
The Euro continues to remain range bound between 13770 to 13830 on top and 13460 to 13340 on the downside, depending daily on which way the wind blows. Any sustained lower price action is negative.
Stay tuned for Forex and Short Term Flashes for Euro trades. Cable reached up toward the 168 region before backing down a bit and remains in a tight range while up on the year. The Canadian Dollar held up ok late Friday. Look for more range bound trading. If the U.S Dollar firms over 8044 then a test of 8194 is likely. However, the Dollar is stuck in a sideways trading range. Silver and gold closed a bit higher Friday. Copper acts better and we want to roll our March Copper longs out to July and maintain a long in May. Traders should note; Silver and Gold tend to act a bit sloppy after a run-up in February from the autumn and winter lows thus testing the low end of February prices is not out the question. U.S 30 Year Bond Futures also closed a tad higher. We remain long postured dollar yen and remain short postured Yen futures. Long term Dollar-Yen remains friendly. Long term Cable, remains friendly and is backing and filling. Long term work on Aussie remains bearish, but can bounce. The Aussie / Kiwi has likely made lows and aggressive forex traders can begin to nibble on the pair for a rally.
WTI is higher on the year, Brent Crude Oil is higher on the year, and Natural Gas has left the building on the upside. Nat Gas looks constructive long term and is higher on the year. Unleaded Gas rallied, buy dips. Heating Oil remains buoyant on weather and supplies are down from the five year averages. Buy dips
July Bean Oil has firmed dramatically and so have Soybeans and appear over extended for now. Chicago Wheat tends to make lows into July and reached our sell region and backed off a bit.
Coffee continued to rally. Coffee is largely a weather focus now and over the next two weeks is more likely to become a trading affair rather than a one way market. Sugar is over-bought tends to make lows in the middle of the year, we will see if it sets back a bit, so far has not but a lot of markets have rallied and are due for pull backs. Cocoa remains long term friendly and is overbought. Cotton acts ok is over-bought. Traders should get back long on a dip. Acreage is expected to increase, however prices are holding.
Two U.S. government agricultural reports released late on Friday were USDA Cattle and Feed and Cold Storage reports. The USDA’s monthly cattle on feed report, released Friday afternoon was deemed bearish for summer futures contracts. U.S Placements in feedlots during January totaled 2.03 million, 9% above 2013. Traders expected roughly a 2.6% hike in placements. That said supplies are still tight and ranchers expect high prices to stay around. Farmers expected wheat to stay at 13.00 dollars a bushel a few years back. Coffee Growers expected 3.00 Coffee to stay around a few year back ….the best cure for high prices is high prices. Traders should Sell June Cattle and August Cattle at mkt on the open Monday. If April dips cattle over the next few weeks drops back towards 13470 we would consider that a chance to buy for a bounce.
The Cold storage report showed pork in U.S. cold storage warehouses in January hit a record high for a second month in a row as processors and packers are stockpiled record amount of product in anticipation of tighter supplies as a result of the Pig Virus we mentioned months ago. The Commodity Funds are all in on the long side right now ….. Friday’s USDA report showed pork inventories last month totaled 623.7 million lbs, up 69.4 million from December and up 7.3 million from a year ago.
It was the most ever storage for the month of January after surpassing the 554.3 million record in December and January 2013’s record of 606.425 million, normally supplies increase in January, but not like this. Storage of Pork bellies (bacon) increased dramatically as end-users stocked up for peak summer consumer demand. Consumer demand which may or may not come to fruition and freezer capacity is becoming stretched. Retail prices of bacon are up to a point which is likely curtailing robust demand. Total belly storage last month was 86.4 million lbs, a 6 million lbs rise from the end of December and 50 million lbs more than a year earlier. While Hogs typically are less available during the summer when extreme heat slows down weight gains and interferes with conception, the Spread between June and April has come in and should begin to move back out. Stay with the spreads.
Hog slaughter this week totaled 2.234 million head, up 1.0% from the week before and up 3.1% compared to the same week last year. The average live weight last week was 281.2 pounds, up a hair from a week earlier and up nearly six pounds from a year ago. The pig virus is ‘expected’ to shrink hog numbers beginning in the spring of 2013 through the remainder of the year. However that has not shown up yet and is primarily being offset by an ever increasing pig per litter count which is still near historic highs. Pork export issues between the United States and China may also be a reason for the hefty increase pork meat inventory last month. Hog producers in China have begun to lose money.
Well over a year or two ago some of the largest exports of pork genetic material to China from the US in pork occurred, material meant to build supplies in China for years to come. It is likely that Pork exports to China will be less focus and in fact traders should not be surprised to see China work its way into the export market over the next few years.
That said April Hogs are 9 cents over cash and are steeply priced. They can quickly move back towards the 9500 region or lower. Consider April Hogs a trading affair if they close back under 9700 then a move back towards 9350 is likely. Until that happens the Funds are in charge and both the public and the funds are all in on the long side and that smacks of over-done market.
Stay tuned for BW flashes and additional analysis across all markets.
Onto the nitty-gritty…
THE SENSATIONAL STOCK AND BOND MARKET
DOW JONES INDUSTRIAL AVERAGE
Support should appear 15,925.00 and the 15,760.00 to 15,690.00 region.
Below that buyers should appear near 15,350.00 to 15,290.00 and contain declines.
Resistance is at 16,150.00, an extended trade or close over is friendly and augurs for a test of 16,285 and eventually the 16,420.00 to 16,550.00 region.
MARCH E-MINI SP500
Resistance should appear near the 1858.00 to 1865.00 region. Beyond that a test of 1902.00 to 1909.00 is likely.
Support should appear near 1822.00 to 1808.00 and the 1780.00 to 1774.00 region.
NASDAQ COMPOSITE
Resistance should appear near 4304.00 to 4315.00, a close over is friendly and augurs for a test of
4370.00 to 4381.00
Support should appear near 4249.00 to 4238.00, below that support is near the 4183.00 to 4163.00 region. Under that buyers should appear near the 4120.00 to 4110.00 region and contain a decline.
MARCH E-MINI NASDAQ 100
Support should appear near 3623.00 to 3613.00 and 3563.00 to 3553.00 region.
Resistance is at 3734.00 to 3743.00 beyond that a test of 3795.00 to 3806.00 is likely
MARCH E-MINI RUSSELL 2000
Resistance should now appear at 1169.00, a close over is friendly and augurs for a test of 1192.00 to 1203.00 and the 1232.00 to 1238.00 region.
Support should appear near 1150.00 and 1136.00 to 1130.00.
Stay tuned for Flashes and trade accordingly
JUNE 30 YR BONDS
Resistance should appear near 132-07 and 132-21. Beyond that sellers should appear near 133-07
Support should appear near 131-07 and 130-21… Below that buyers should appear near 129-21 and 128-21
JUNE 10 YR NOTE
Resistance should appear near 124-21 and 125-07. Above that resistance is at 125-21 and 126-07 where sellers should appear and cap rallies.
Support should appear near 123-07 and 122-21, below that a test of 122-07 and 121-21 is likely and should hold for now.
THE FRENZIED FOREX FRONT
MARCH DOLLAR INDEX
Resistance should appear near 8029 to 8044 and the 8119 to 8134 region. A sustained trade or close over is friendly and augurs for a test of 8194 to 8223.
Support should appear near 7991 and the 7954 to 7939 region.
MARCH JAPANESE YEN
Resistance should appear near 9821 to 9837 and 9921 to 9937
Support should appear near 9737 to 9706 , a close under is negative.. Below that an eventual test of 9445 to 9429 and 9347 to 9316 is likely.
MARCH EURO CURRENCY
Support should appear near 13615 and the 13460 to 13340 region.
Resistance should appear near the 13770 to 13830 region. Beyond that a test of 13990 is likely and should cap a rally. Stay tuned for Flashes…
MARCH SWISS FRANC
Resistance should appear near the 11300 to 11360 region, where sellers should appear and cap rallies.
Support is near the 11010 to 10960 region.
MARCH BRITISH POUND
Support should appear near 16550 to 16420.
Resistance remains near 16890 to 16960.
MARCH CANADIAN DOLLAR
Resistance should appear near 9040 to 9060 and the 9140 to 9156 region.
Support should appear near 8964 to 8934, a close under is negative and augurs for a test of 8871 to 8856
MARCH AUSSIE DOLLAR
Support should appear near 8871 to 8856 and 8777 to 8762.
Resistance should appear near 9044 to 9060 and 9140 to 9156.
Pick Your Poison…
THE PRECIOUS METALS
APRIL GOLD
Resistance should appear near 1334.0 to 1346.0. Beyond that sellers should appear near
1377.0 to 1383.0.
Support remains should appear near 1310.0 to 1304.0 and the 1238.0 to 1232.0 region. .
MAY COPPER
Resistance should appear near 32610 to 32700, a close over is friendly and augurs for a test of 33190 to 33280. Beyond that a test of 33770 to 33860 is likely
Support should appear near 32130 to 31940 and the 31570 to 31480 region.
MAY SILVER
Support should appear near the 2134 to 2126 and the 2042 to 2034 region.
Resistance is at 2219 to 2226. Beyond that a test of 2267 to 2275 is likely and should cap rallies.
THE EXCITING ENERGIES
APRIL CRUDE OIL
Resistance should appear near the 10320 to 10360, a close over is friendly and augurs for an eventual test of 10580 to 10680.
Support should appear near 10136 to 10101 and 9937 to 9921… Below that buyers should appear near
9837 to 9821. Traders can buy at 9845 and hold for higher prices.
APRIL BRENT CRUDE OIL
Resistance should appear near 11010. Beyond that a test of the 11300 to 11360 region is likely.
Support should appear near 10820 and the 10680 to 10580 region
APRIL HEATING OIL
Support should appear near should appear near 29999 to 29720 and 29370 to 29280 region
Resistance should appear the 30920 to 31020, beyond that a test of 31480 to 31570 is likely.
APRIL UNLEADED GAS
Support should appear 29900 to 29720 and 29370 to 29280. Traders can buy at 294.10 and hold for higher prices.
Resistance should appear near 30360 to 30450 and the 30920 to 31020 region.
APRIL NATURAL GAS
Resistance should appear at 5056 to 5067, beyond that a test of 5200 to 5211 is likely.
Support should appear near 4995 to 4973 and the 4856 to 4845 region. Below that 4785 to 4775 should hold and contain a decline.
THE GRANDE’ GRAINS
MAY SOYBEANS
Support should appear near 1346 to 1334 and the 1310 to 1304 region.
Resistance should appear near 1377 to 1383. Beyond that sellers should appear near 1415 to 1421 and should cap a rally.
JULY SOYBEANS
Support should appear near 1310 to 1304, below that buyers should appear near 1289 and the 1274 to 1268 region. Traders can buy at 1290 and hold for the pull into summer.
Resistance should appear near 1361 ½ and 1377 to 1383.
MAY SOYOIL
Resistance should appear near 4163 to 4183 and the 4238 to 4249 region.
Support should appear near 4056 to 4046 and the 3992 to 3982 region. Below that buyers should appear near 3929 to 3909 and contain a decline.
MAY SOYMEAL
Resistance should appear near 442.5 to 444.6 and 450.3 to 451.4 region. Beyond that sellers should appear near 457.1 to 458.2
Support should appear near 438.1 to 437.0, a close under is negative and augurs for a test of 431.5 to 430.4 and the 424.9 to 423.8 region, which should hold.
MAY CORN
Support should appear near 451 ½ to 450 ¼ and 444 ¾ to 442 ½ which should hold.
Resistance should appear near 463 ¾ to 465 and 469 ½ to 471 ½ region and should cap a rally.
MAY WHEAT
Resistance should appear near 610 to 611 ¼ and the 616 ½ to 619 region. Beyond that sellers should appear near 625 ¾ to 627.
Support should appear 595 ¾ to 594 ½ and 588 to 585 ½. Below that a test of 580 ½ to 579 ¼ is likely.
THE LIVELY LIVESTOCK
APRIL CATTLE
Support remains near 13830 to 13770. Below that buyers should appear near 13460 to 13340.
Traders can buy at 13470 and hold for higher prices.
Resistance should appear near 14150 to 14210 then 14372 and the 14530 to 14590 region.
JUNE CATTLE
Support should appear near 13100 to 13040 and 12740 to 12680.
Resistance should appear near the 13340 to 13460 and 13770 to 13830 region.
APRIL HOGS
Support should appear near 9737 to 9707 and the 9347 to 9317 region.
Resistance should appear near 10022 to 10037 and 10102 to 10137
JUNE HOGS
Support should appear near 10680 to 10580 and 10472
Resistance should appear near 10960 to 11010
Stay tuned for Livestock flashes.
THE SATISFYING SOFTS
MAY COFFEE
Support should appear near 16150 to 16090 and the 15760 to 15690 region. Below that buyers should appear near 15350 to 15290 and contain a decline.
Resistance should appear 17310 to 17360 and the 18080 to 18220 region, where sellers should cap rallies.
MAY COCOA
Resistance should appear near the 2972 to 2990 region. Beyond that a test of 3036 to 3045 is likely and should bring out sellers.
Support should appear near 2883 to 2874 and the 2829 to 2820 region. Below that buyers should appear near 2775 to 2758 and contain a decline.
MAY SUGAR
Resistance is near 1731 to 1738 and 1774 to 1780
Support should appear near 1696 to 1689, a close under is negative and augurs for a test of 1655 to 1642… Below that a test of 1615 to 1609 is likely.
MAY COTTON
Support should appear near 8777 to 8762 and the 8683 to 8668 region. Below that buyers should appear near 8590 to 8560. Traders can buy at 8777 for a bounce and hold for higher prices.
Resistance is at the 8856 to 8871 region. Beyond that a test of 8934 to 8964 and the 9044 to 60 region is likely. Stay tuned for flashes.
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 February 23, 2014 3:00 PM South Florida Beach Time
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