FuturesCom Bi-Weekly Investment Outlook # 446 April 20 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
“In the fields of observation chance favors only the prepared mind.” – Louis Pasture-
Saturday April 19, 2014 5:00 AM, South Florida Beach Time.
Traders should stay nimble and tune in for BW flashes and updates. The Forex markets were mixed over the Good Friday Holiday. Analysis for Silver and Copper will roll to July contracts. Major US stock averages remain mixed on the year and the long term technicals remain bullish, traders should look for wide ranges and trading opportunities from both sides as we move into month end.
Last week economic data was friendly; UK unemployment last week was okay. China retail sales were okay. U.S. February and March Industrial production figures were constructive. Initial jobless claims in the U.S. are drifting lower and that is also constructive for the U.S. economy.
Over the past three years U.S. nonfarm payroll numbers have seen gains during April, May and June. Considering this, traders should look for back and forth stock market action and perhaps Bond futures may come under some further pressure directly ahead. Lingering market fears over the Ukraine crisis are bound to stick around for a while. That said, it is unlikely the Ukraine crisis will cause any major disruption in U.S. economic activity. It’s a European problem.
In the Forex markets, the Euro is still stuck in a trading range between 13460 the downside and 13830 on top. Ditto for the dollar index, the dollar is friendly on a sustained close over 8045. The Dollar index is a tad lower on the year and a bit lower on the month. The Euro under 13770 is negative for a test of 13460 to 13340. Maintaining a posture over 13830 indicates an eventual test of 14150.
The ECB members continue to ‘talk’ the Euro down. Constant ‘Babble’ from ECB members and other central banks is now par for the course.. Dollar-Yen needs to hold over 10320 to maintain an upward bias and so far has not. Look for a trading range in Dollar-Yen. Cable is range bound and remains in a tight range. The British pound is marginally higher on the year and month. Traders should cancel forex buys below the market in the Australian Dollar since it already firmed. Look for a trading range in the Aussie. Canadian Dollar Futures are indicating tests of marginally higher prices. In USD/CAD terms a sustained decline under 10960 is negative for a test of 10820, while over 11010 is friendly. So far a sustained decline has not occurred. Forex markets remain in tight ranges and should be considered trading affairs. Aggressive traders should consider Selling the Kiwi on Rallies. Long term charts for Silver and Gold remain bearish. Gold and silver bounced from nearby support then fell apart. Look for more trading ranges. Copper acts better. Speculators continue to maintain a record short position in copper and a good bounce is likely underway. Traders should roll the longs in May to July or September. The energy markets are acting well, look for back and forth trading. No change in posture, buy dips and remain long. Nat Gas has broken out to the upside and is likely going higher and may test this winters highs this summer, if it holds.
Analysis for overseas equity and foreign exchange markets as well as emerging economies such as China, Brazil and India are all available upon request. Japan Stock Indices are weak and appear to be rolling over, Japan has issues. I will comment from time to time on those regions and markets around the globe in this publication, for more detailed information please call or email a request.
Soybeans made new contract highs( not all time highs) again last week and then backed off. Soybeans don’t make typical final highs until sometime in June and July. Look for trading ranges in soybeans and a place to get long the back end of Soybeans for a summer rally and a place to enter Long soymeal on a dip. The rally has been sharp and a bit of backing and filling is due.
Soybean oil continues to act well. Buy on a dip… Soybean Oil continues to find increased support from El Nino chatter. Soybean Oil has also benefited from gains in Palm Oil over the past few weeks. Soybean Oil’s premium to Palm Oil is at the lowest level in Rotterdam since 2006 when Palm Oil traded at a slight premium Soybean Oil. The inference of this is better demand in front of the market rather than behind it. Additionally, if a dry weather outlook occurs for Indonesia and Malaysia it may weigh on production of Palm Oil. The world vegetable oil market is led by Palm Oil exports from Malaysia and Indonesia. For example Palm Oil exports from Malaysia and Indonesia are about seven times Soybean Oil exports from Argentina and the US. If there is a significant El Niño impact of dryness in South East Asia it could shift demand to US-based Soybean Oil over the coming months.
There is already a significant impact in Australia because of the El Niño. India is also prone to weather impacts especially during June since it could cause increase import demand from the US. Buy a dip in Bean Oil, preferably against our exit of the recommended long July from previous Bi-weekly’s or tad higher.
Livestock markets are a day to day trading affair. However short-term demand for Live Cattle may improve as spring progresses with a warm-up across the country. Cattle futures are still significantly below cash even after the recent decline last week.
August Hogs are a big discount to the cash market and should be a premium to the cash market. The USDA announced late last week that PED virus and Swine Delta Coronavirus are now reportable diseases. This requirement will make it easier for USDA to track the spread of the PED virus.
Stay tuned for increased Livestock Flashes short term and long term after the holiday.
Looking at the Softs; Sugar seasonally has a habit to slack off a bit and it has, Sugar is likely to drift a bit lower and test lower levels however it acts better than it has and can rally from here. A broader trading range is likely. Sugar is a trading affair.
Cocoa remains long term bullish. The same weather related issues that are bullish for Palm Oil has traders concerned regarding Indonesian Cocoa production over the next year. Asian first-quarter cocoa grindings increased 3.7% from one year ago. A stable supply combined with increased demand is supportive. If there is another world production deficit over the next year prices may be well supported. Toss in uncertainty in Africa from disease and geopolitical factors where most of the world’s Cocoa production occurs and higher prices may well be in front rather than behind for Cocoa.
The long term price targets remain well above current prices. Maintain the long posture and buy dips.
Cotton remains long term friendly however Cotton is a tad lower on the month and is normally seasonally weak this time of year for another month actually a bit less , so look for a trading range.
Traders should note, many bearish seasonal tendencies in a variety of markets especially the ones looking for lower prices in many agricultural commodities have not come to fruition.
Coffee typically can show strength into late April as the shorts exit and coffee has done just that. May and June can be stronger during bull phases if weather premium builds and frost fears in Brazil show up. Significant damage has been done to the current coffee crop. Look for production decreases for next year’s crop also.
Due to the wild activity coffee traders need to have ice water running thru their veins..
Onto the nitty-gritty..
THE SENSATIONAL STOCK AND BOND MARKET
DOW JONES INDUSTRIAL AVERAGE
Support should appear near 16,150.00 to 16,090.00. Below that buyers should appear near 15,760.00 to 15,690.00 and contain declines. Nearby Resistance remains at 16,420.00 to 16,550.00, an extended trade over is friendly and augurs for a test of the 16,890.00 to 16,960.00 region.
JUNE E-MINI SP500
Nearby Resistance is at 1858.00 to 1865.00 a close over is friendly and augurs for another test of the 1902.00 to 1909.00 region. Beyond that a test of 1946.00 to 1953.00 is likely and should cap a rally. Support should appear near 1840.00 and the 1822.00 to 1808.00 region. Below that buyers should appear near the 1780.00 to 1774.00 and contain a decline. NASDAQ COMPOSITE
Resistance should now appear at 4163.00 to 4183.00. Beyond that sellers should appear near 4238.00 to 4249.00 and cap a rally for now.
Support should appear near 4056.00 to 4046.00 and the 3992.00 to 3982.00 region. Below that buyers should appear near 3929.00 to 3909.00 and contain a decline.
JUNE E-MINI NASDAQ 100
Support should appear near 3503.00 to 3493.00 and the 3443.00 to 3425.00 region. Resistance is at 3553.00 to 3563.00 and 3613.00 to 3623.00.
JUNE E-MINI RUSSELL 2000
Nearby Resistance should appear at 1136.00, a close over is friendly and augurs for a test of 1164.00 to 1169.00. Beyond that a test of 1180.50 is likely.
Support should appear near 1130.00 and the 1101.00 to 1096.00 region. Failure there is negative and indicates a test of 1082.00.
Traders should go long if a close over 1136.50 occurs.
JUNE 30 YR BONDS
Resistance should appear near 134-07 and 134-21.. Beyond that sellers should appear near 135-07 and 135-21 and cap a rally.
Support should appear near 133-21. Below that a test of 133-07 and 132-21 is likely.
JUNE 10 YR NOTE
Resistance should appear near 124-07 and 124-21. Above that resistance is at 125-07 and 125-21 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.
THE FRENZIED FOREX FRONT
JUNE DOLLAR INDEX
Resistance should appear near 8029 to 8044 and 8119 to 8134.
Support should appear near the 7959 to 7939 region.. Below that buyers should appear near 7864 to 7836 JUNE JAPANESE YEN Resistance should appear near 9821 to 9837, beyond that a test of 9921 to 9937 is likely. Support should appear near 9737 to 9706 and 9641 to 9625, below that buyers should appear near 9542 to 9525 and contain a decline..
JUNE EURO CURRENCY
Support should appear near 13770 then 13615 and the 13460 to 13340 region. Resistance should appear near 13830, beyond that a test of 13910 and 13990 is likely.
JUNE SWISS FRANC
Resistance should appear near 11360 then 11500 and the 11640 to 11690 region.
Support is near 11300 then 11155 and the 11010 to 10960 region.
JUNE BRITISH POUND
Support should appear near 16720 and the 16550 to 16420 region.
Resistance remains near the 16890 to 16960 region.
JUNE CANADIAN DOLLAR
Resistance should appear near 9100 and 9140 to 9156 Support should appear near 9060 to 9044 and 8964 to 8934
JUNE AUSSIE DOLLAR
Support should appear near 9156 to 9140 and 9060 to 9044.
Resistance should appear near 9316 to 9347. Beyond that a test of 9429 to 9445 is likely. Stay tuned for Forex Flashes.
THE PRECIOUS METALS
JUNE GOLD
Resistance should appear near 1304.0 to 1310.0 and the 1334.0 to 1346.0 region.
Support should appear near 1289.00 and the 1274.0 to 1268.0 region.
JULY COPPER
Resistance should appear near 30360 to 30450, a close over is friendly and augurs for a test of 30920 to 31020 and likely higher..
Support should appear near 29900 and 29720 and the 29370 to 29280.
JULY SILVER
Support should appear near 1953 to 1946. Below that a test of 1909 to 1902 is likely.
Resistance is at 2034 to 2042 and the 2080 to 2089 region.
THE EXCITING ENERGIES
JUNE CRUDE OIL
Resistance should appear near 10360 and 10470, an extended trade or close over is friendly and augurs for a test of the 10580 to 10680 region.
Support should appear near 10320 and 10237. Below that buyers should appear near 10136 to 10104.
JUNE BRENT CRUDE OIL Resistanceshould appear near 10960 to 11010. Beyond that tests of 11300 to 11360 are likely.
Support should appear near 10815 and the 10680 to 10580 region.
JUNE HEATING OIL
Support should appear near should appear near 29900 to 29720 and the 29370 to 29280.
Resistance should appear 30360 to 30450. Beyond that a test of 30920 to 31020 is likely.
JUNE UNLEADED GAS
Support should appear 30130 and 29900 to 29720 which should contain declines for now. Below that buyers should appear near 29370 to 29280.
Resistance should appear near 30360 to 30450. Beyond that a trade towards 30920 to 31020 is likely.
JULY NATURAL GAS
Resistance should appear 484.5 to 485.6, beyond that a test of 491.5 to 492.6 is likely and should cap a rally.. A close over is friendly and augurs for a test of 491.5 to 492.6
Support should appear near 471.7 to 469.5 and the 465.0 to 463.9 region and should hold for a bit.. Below that buyers should appear near 458.2 to 457.1
THE GRANDE’ GRAINS
JULY SOYBEANS Support should appear near 1496 to 1484 then 1471 and the 1459 to 1453 region and should contain a decline.
Traders can buy at 1460 for a bounce and hold for higher prices.
Resistance should appear near 1529 to 1535, beyond that a test of 1569 to 1576 is likely.
NOVEMBER SOYBEANS Support should appear near 1238 to 1232 then 1218 and the 1203 to 1192 region.
Resistance should appear near the 1268 to 1274 region and cap a rally.
JULY SOYOIL Resistance should appear near 4370 to 4381. Beyond that a test of 4425 to 4446 is likely.
Support should appear near 4315 to 4304 and the 4249 to 4238 region. Traders can buy at 4277 and hold for higher prices. Below that buyers should appear near 4183 to 4163.
JULY SOYMEAL
Resistance should appear near 484.5 to 485.6, beyond that a test of 491 .5 to 492.6 is likely
Support should appear near 465.0 to 463.9 and the 458.1 to 457.1 region. Below that buyers should appear near 451.4 to 450.3 which should hold.
Traders can buy at 458.5 and hold for higher prices. Trade Accordingly
JULY CORN
Support should appear near the 499 ½ to 497 ¼ region. Below that buyers should appear near 492 ¾ to 491 ½ region. Below that buyers should appear near 485 ¾ to 484 ½ and contain declines.
Resistance should appear near 512 ¾ to 513 ¾ and the 520 to 521 ¼ region. Beyond that sellers should appear near the 541 ¾ to 544 region
JULY WHEAT
Resistance should appear near 714 ¼ to 717, beyond that a test of 732 ¾ to 734 ¼ is likely and should cap a rally.
Support should appear near 683 ¾ to 680 ¾ and the 675 ½ to 674 ¾ region, where buyers should appear and contain a decline. Trade Accordingly and Stay Tuned for Grain Flashes..
THE LIVELY LIVESTOCK
JUNE CATTLE
Support should appear near 13460 to 13340 and 13220 where buyers should step in and contain a decline.
Resistance should appear near 13617, a close over is friendly and augurs for a test of 13770 to 13830.
AUGUST CATTLE Support should appear near 13100 to 13040 and should contain a decline.
Resistance should appear near 13340 to 13460, beyond that a test of 13770 to 13830 is likely.
JUNE HOGS
Support should appear near 12500 and the 12380 to 12320 region which is likely to contain a decline.
Resistance should appear near 12680 to 12740, beyond that a test of 13040 to 13100 is likely.
AUGUST HOGS
Support should appear near 12030 to 11960 and 11817 which is likely to contain a decline. Resistance should appear near 12320 to 12380, beyond that a test of 12680 to 12740 is likely.
Stay tuned for Livestock flashes.
THE SATISFYING SOFTS
JULY COFFEE
Resistance should appear near 20800 to 20890, beyond that a test of 21260 to 21340 is likely.. A close over is friendly and augurs for a test of 21700 to 21850 and eventually the 22190 to 22260 region.
Support should appear near 19960 to 19820 and 18650 to 18580. Below that buyers should appear near 18220 to 18080 and contain a decline.
JULY COCOA
Resistance should appear near 3036 to 3045, beyond that a test of 3092 to 3102 is likely.
Support should appear near 2990 to 2972 and 2937 to 2928. Where buyers should appear and contain a decline, Traders can buy at 2940 and hold for higher prices. Aggressive Traders should go long if a close over 3047 occurs.
JULY SUGAR
Resistance is near 1774 to 1780 and 1808 to 1822 and should cap rallies for now. Support should appear near 1738 to 1731..Below that buyers should appear near the 1696 to 1689 region and contain a decline.
JULY COTTON
Support should appear near 9156 to 9140 and the 9060 to 9044 region. Resistance is at 9316 to 9347, an extended trade over is friendly and augurs for a test of 9429 to 9445 and the 9706 to 9737 region. Traders should go long if a close over 9349 occurs.
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 April 20, 2014 10:00 AM South Florida Beach Time
THIS PUBLICATION IS SUBJECT TO REVISIONS AND CONTAINS THE VIEW AND OPINIONS OF THE AUTHOR, EXCEPT WHERE OPINIONS ARE ATTRIBUTED TO OTHER SOURCES. WRITTEN PERMISSION IS REQUIRED PRIOR TO ANY DISTRIBUTION OR REPRODUCTION. FUTURES AND FOREIGN EXCHANGE TRADING IS RISKY AND CAN CAUSE SUBSTANTIAL FINANCIAL LOSS. THE USE OF OPTIONS AND OPTION TRADING INVOLVES A HIGH DEGREE OF RISK. THE USE OF STOPS MAY NOT LIMIT LOSSES TO INTENDED AMOUNTS. SPREAD POSITIONS MAY NOT BE LESS RISKY THAN OUTRIGHT FUTURES POSITIONS, FOREIGN EXCHANGE AND OPTIONS. TRADING FUTURES AND FOREIGN EXCHANGE ON MARGIN CARRIES A HIGH LEVEL OF RISK AND MAY NOT BE SUITABLE FOR ALL INVESTORS. PLEASE TRADE WITH CAPITAL YOU CAN AFFORD TO LOSE. PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. NO SOLICITATION IS MADE HERE FOR INDIVIDUALS TO BUY OR SELL FUTURES CONTRACTS, FOREIGN EXCHANGE OR OPTION MARKET. SOURCES ARE BELIEVED TO BE RELIABLE BUT NO ASSURANCE IS MADE FOR ACCURACY. READERS ARE SOLEY RESPONSIBLE FOR HOW THEY USE THE INFORMATION AND FOR THEIR RESULTS. YOU SHOULD BE AWARE OF ALL THE RISKS ASSOCIATED WITH FUTURES AND FOREIGN EXCHANGE AND SEEK ADVICE FROM AN INDEPENDENT FINANCIAL ADVISOR IF YOU HAVE ANY DOUBTS, THE HIGH DEGREE OF LEVERAGE THAT IS OFTEN OBTAINABLE IN FUTURES AND FOREIGN EXCHANGE TRADING CAN WORK AGAINST YOU AS WELL AS FOR YOU. THE USE OF LEVERAGE CAN LEAD TO LARGE LOSSES AS WELL AS GAINS. INTERNET RISKS ; THERE ARE RISKS ASSOCIATED WITH UTILIZING AN INTERNET BASED SERVICE INCLUDING BUT NOT LIMITED TO, FAILURE OF HARDWARE, SOFTWARE AND INTERNET CONNECTION, FUTURESCOM EMPLOYS BACK-UP SYSTEMS AND CONTINGENCY PLANS TO MINIMIZE THE POSSIBILITY OF SYSTEM FAILURE