FuturesCom Bi-Weekly Investment Outlook # 449 June 1 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
Saturday May 31, 2014 5:00 PM, South Florida Beach Time.
Historically the 30 Year September Bond futures tend to firm up a bit from the end of May until late June maybe mid-July. Bonds are doing that now. US economic data continues to be mixed. The 4 week moving average for jobless claims declined last week and points to an interesting non-farm payroll report due out on Friday. The U.S GDP revision was disappointing for some demand led commodity markets. While it may not mean a lot, July lumber futures traded at contract lows on Friday, it did not close near the lows and therefore did not give a weekend sell rule. However Lumber is rolling over on the long term charts.
Forex markets; Analysis for most Forex Futures will roll to September at the end the week.
The Euro ‘babble’ will be thick next week with the ECB meeting and the expected announcement of QE from the ECB. Additionally US unemployment data comes out on Friday and should move markets. Typically the Dollar tends to exhibit strength into June and is beginning to do that a bit, however dollar rallies are still tepid at best. The Euro is a bit lower on the year. The extended trading below 13770 indicates the Euro can test 13460. Ditto for Swiss Franc futures…unchanged to a tad lower on the year and lower on the month. Below the 11300 to 11360 region, the downside target is 11010 to 10960. Swiss Futures upside target remains near 11640 to 11690.
Cable is range bound and remains in a tight trading range. The British Pound is marginally higher on the year. Look for a range bound Cable for now.
USD/CAD is trading a bit under the 11010 to 10960 region and is a bit lower on the month. We are friendly USD/CAD for the near term.
The Aussie Dollar rallied a bit last week on the back of an upward revision of Australian Capex.
Data came in worse than expected but alleviated some fears of an even worse number. Chinese manufacturing PMI has been supportive also. On the downside, the RBA is unlikely to announce on Tuesday any change in monetary policy. The decline in gold is a negative for Aussie. The Dollar-Yen remains mixed The Japanese stock markets are beginning to roll-over on the long term charts to the downside.
Stay tuned for Forex Flashes and ideas during the week.
Analysis for overseas equity and foreign exchange markets not listed in today’s newsletter are available upon request, for more detailed information please call or email a request.
Precious Metals; Long term charts for Silver and Gold remain bearish, nothing has changed.
July Silver traded at new contract lows on Friday, however it did not close at the lows and therefore did not give a weekend sell rule. Gold is slightly up on the year while silver is now down on the year.
Both closed lower on the month. Copper continues to act ‘ok’, we will see if holds. Chinese demand near 3.00 is supportive and world growth while tepid is improving, thus the supply demand balance may begin to show a tighter market. Copper is up on the month and down a tad on the year. Seasonally copper typically remains soft until mid-June so expect a trading affair. However traders should look to buy a dip into mid-month look for higher prices into the end of June and into the middle of July.
Energy markets continue to trade in a range bound manner. On a seasonal basis Crude can remain firm into July. Crude oil is currently higher on the year and closed higher on the month, however crude oil and products closed sloppy and weaker on Friday to end the month. Crude Oil is a trading affair and may head back down a bit, unleaded gas demand remains supportive. However with uncertain U.S income growth, domestic push back against higher prices is possible. Geopolitical issues can push crude trading in both directions and traders should look for more back-and-forth action for crude oil and products. Natural Gas at the low end of the trading range remains attractive under 4.30 especially if hot weather limits inventory building during the summer. Stay tuned for energy trades and Flashes.
Grains; Last week’s USDA Crop Progress report says that 88% of corn acres were planted by May 25. That is 15 points more than the week before, 4 points ahead of last year, and the same as the 5 year average. US weather and Chinese weather is critical for price outlooks and corn and soybeans over the next several weeks. Beans are not planted yet. Traders should look for more trading ranges. Soybean and soymeal exports are supportive for nearby beans. However soybeans typically peak in June and July, therefore traders should expect a trading range. Wheat typically makes lows for the remainder of the year over the next month. Traders should look for a range bound market to begin. Also look for December wheat to gain on December corn over the next 4 to 6 weeks. Buying December wheat and selling December corn typically makes money after the first week of June until approximately the third week of July. Wheat is oversold it could bounce sharply any weather news. Stay tuned for grain flashes for trading from both sides.
Livestock; The Livestock markets are a day to day trading affairs and traders should stay tuned for flashes. The U.S. economy shrank at an annual rate of 1% during the first quarter but is expected to improve. The data is not an encouraging sign for over-all demand for meat. The front-end hogs have become weak while the back end has become a trading affair. Look to buy weakness in October or August and look to trade the July from both sides short term with increased sizes. Those who desire to trade June Hogs into expiration and spreaders should keep a close contact with our office daily. Weights were 286.7 pounds last week, a tad less than 1 pound lighter than the week before, but over 11 pounds heavier than a year ago. There are some fat pigs running around.. This is the biggest year-over-year increase in hog weights thus far this century. Cash hog prices were slightly higher last week after seven weeks in a row of decline. The national average carcass price was $106.39/cwt Friday morning up 49 cents from last Friday. The CME index was valued around 109 to 110 Friday Morning. Hog slaughter this week totaled 1.75 million head, down 1.3% from the week before and down 6.6% compared to last year.
Seasonally, buying August cattle at the beginning of last week tends to make money by the fourth of July. Traders should expect a choppy trading affair in a market that is likely making a long term top however it may take a while and right now the trend is your friend. Buy August cattle on a dip and see if it holds and perhaps trade it from both sides.. Cash Cattle was near $144.0 last week, down a tad from the previous week but up $19.35 from a year ago and not as weak many traders had expected. Slaughter totaled 537,000 head, down 10.4% from the previous week and down 9.7% from the same week last year. Stay tuned for Livestock Flashes
Softs; Cocoa remains long term bullish, July Cocoa made new contracts highs on Friday before setting back a bit. While a dip is likely traders should Buy Sept Cocoa for the ‘pull’ and remain long postured.
October Sugar tends to rise into the Fourth of July and the Dog Days of Summer. Dryness in Brazil has possibly adversely impacted Brazil’s crop. Additionally India’s monsoon cycle is a bit late this year. Normally the first week of June brings the monsoon, it appears to have stalled a bit over the Bay of Bengal. India is a large producer sugar and world’s largest consumer of sugar. Traders should buy dips, maintain the long posture and stay tuned for flashes.
Coffee looks like it peaked a bit into mid to late May as expected, traders should expect a trading affair during Brazil’s harvest. Once that passes the market will ponder the damage the Brazilian coffee crop and should look for more production decreases for next year’s crop and likely for the year after. There are estimates of between 43 – 49 million bags for this year’s crop. Coffee can exhibit some strength in June if premium builds or just perhaps less seasonal weakness. Cotton sold off sharply last week and should begin to exhibit range-bound trading. December Cotton is cheap under 7400 cents.
Traders should stay nimble and stay tuned for Flashes and Updates in all Markets.
Onto the nitty-gritty.
THE SENSATIONAL STOCK AND BOND MARKET
DOW JONES INDUSTRIAL AVERAGE
Support should appear near 16,550.00 to 16,420.00. Below that buyers should appear near
16,150.00 to 16, 090.00 and contain declines. Resistance is at 16,720.00 and the 16,890.00 to 16,960.00 region, where sellers should appear and cap a rally.
SEPTEMBER E-MINI SP500
Resistance is at 1927.00 and the 1946.00 to 1953.00 region, where sellers should appear.
Support should appear near 1909.0 to 1902.0 and the 1865.00 to 1858.00 region. Below that buyers should appear near the 1822.00 to 1808.00 region and should contain a decline.
Traders can buy at September E-mini at 1822.50 for a bounce and hold for higher prices.
NASDAQ COMPOSITE
Resistance should now appear at 4249.0 and the 4304.00 to 4315.0 region. Beyond that sellers should appear near the 4370.00 to 4381.00 region. Support should appear near 4183.00 to 4163.00 region. Below that buyers should appear near 4120.0 to 4110.0 and the 4056.00 to 4046.00 region.
SEPTEMBER E-MINI NASDAQ 100
Support should appear near 3682.00 to 3663.00 and 3623.00 to 3613.00. Resistance is at 3734.00 to 3743.00 and the 3795.0 to 3806.00 region.
SEPTEMBER E-MINI RUSSELL 2000
Resistance should appear at 1136.00, a close over is friendly and augurs for a test of the 1164.00 to 1169.00 region.
Support should appear near 1115.50 and 1101.00 to 1096.00.
SEPTEMBER 30 YR BONDS
Resistance should appear near 137-24 and 138-07. Beyond that a test of 138-21 is likely. An extended trade over is friendly and augurs for a test of 139-07. Support should appear near 136-21 and 136-07, below that 135-21 should hold…
SEPTEMBER 10 YR NOTE
Resistance should appear near 125-21 and 126-07. Above that a test of 126-21 and 127-07 is likely and where sellers should appear and cap rallies.
Support should appear near 124-21. Below that buyers should appear at 124-07 and 123-21 and contain a decline.
THE FRENZIED FOREX FRONT
SEPTEMBER DOLLAR INDEX
Resistance should appear near 8044 and 8119 to 8134. Beyond that a test of 8194 to 8223 is likely.
Support should appear near 8029 and the 7954 to 7939 region. Below that buyers should appear near the 7864 to 7836 region.
JAPANESE YEN Resistance should appear near 9921 to 9937, beyond that a test of 10021 to 10037 is likely. Support should appear near 9821 and 9737 to 9706, where buyers should appear and contain a decline.
SEPTEMBER EURO CURRENCY
Support should appear near 13615, an extended close under is negative and augurs for a test of the 13460 to 13340 region. Nearby resistance is at 13687, a close over is friendly and augurs for a test of 13770 to 13830 , where sellers should appear and cap a rally.
SEPTEMBER SWISS FRANC
Resistance should appear near 11300 to 11360 and 11500.
Support is near 11155 and the 11010 to 10960 region.
SEPTEMEMBER BRITISH POUND
Support should appear near 16720 and the 16550 to 16420 region. Where buyers should appear and contain a decline. Resistance remains near the 16890 to 16960 region and should cap rallies.
SEPTEMBER CANADIAN DOLLAR
Resistance should appear near 9237 and the 9316 to 9347 region. Support should appear near 9156 to 9140 , a close under is negative and augurs for a test of 9060 to 9044.
SEPTEMBER AUSSIE DOLLAR
Support should appear near 9231, a close under is negative and augurs for a test of 9156 to 9140 and 9060 to 9044. Resistance should appear near 9316 to 9347. Beyond that a test of 9429 to 9445 is likely.
THE PRECIOUS METALS
AUGUST GOLD
Resistance should appear near 1268 to 1274 and 1289 an extended close over augurs for a test of the 1304.0 to 1310.0 region.
Support should appear near 1238.0 to 1232.0, a close under is negative and augurs for a test of 1203.0 to 1192.0.
SEPTEMBER COPPER Resistance should appear near 31480 to 31570 and the 31940 to 32130 region. A close over is friendly and augurs for a test of 32610 to 32700.
Support should appear near 31020 to 30920 and 30450 to 30360 and should hold. Traders can buy at 30475 for a bounce and risk a close under 30300 for three days in a row.
SEPTEMBER SILVER
Support should appear near the 1822.0 to 1808.0 region. Failure there is negative and augurs for a test of 1780.0 to 1774.0 and the 1738.0 to 1731.0 region.
Resistance is at 1902.0 to 1909.0 beyond that sellers should appear near 1946.0 to 1953.0 and the 1982.0 to 1996.0 region.
THE EXCITING ENERGIES
AUGUST CRUDE OIL
Resistance should appear near 10320 to 10360 and should cap rallies beyond that a test of 10470 is likely. Above that sellers should appear near 10580 to 10680.
Support should appear near 10136 to 10104 and the 10037 to 10021 region. Below that buyers should appear near 9937 to 9921.
AUGUST BRENT CRUDE OIL Resistanceshould appear near 10960 to 11010 and the 11300 to 11360 region, where sellers should appear and cap a rally. Supportshould appear near 10815, below that buyers should appear near the 10680 to 10580 region and should hold.
AUGUST HEATING OIL
Support should appear near should appear near 28830 to 28740 a close under is negative and augurs for a test of 28290 to 28200 where buyers should appear and contain an early decline. Below that 27750 to 27580 should hold. Resistance should appear 29720 to 29900. Beyond that a test of 30360 to 30450 is likely.
AUGUST UNLEADED GAS
Support should appear 29370 to 29280, below that buyers should appear near 28830 to 28740.
Resistance should appear near 29900 and 30360 to 30450. Beyond that sellers should appear near 30920 to 31020 and cap a rally.
AUGUST NATURAL GAS
Resistance should appear 4.639 to 4.650 and the 4.775 to 4.785 region. Beyond that sellers should appear near 4.845 to 4.856 and cap a rally.
Support should appear near 4.446 to 4.425 and the 4.315 to 4.304 region.
THE GRANDE’ GRAINS
JULY SOYBEANS Support remains near the 1459 to 1453 region, below that buyers should appear near 1421 to 1415 and contain a decline.
Resistance should appear near 1496 and 1512 ½ , an extended close over is friendly and augurs for a test of 1529 to 1535 where sellers should appear and cap a rally.
AUGUST SOYBEANS
Support should appear near 1421 to 1415, a close under is negative and augurs for a test of the 1383 to 1377 region. Below that buyers should appear near 1346 to 1334 and contain a decline.
Resistance should appear near 1453 to 1459 and the 1484 to 1496 region where sellers should appear and cap a rally. Trade Accordingly
NOVEMBER SOYBEANS Support should appear near 1217 1/2 and the 1203 to 1192 region, where buyers should appear and contain a decline.
Resistance should appear near 1238, a close over is friendly and augurs for a test of 1253. Beyond that sellers should appear near 1268 to 1274.
JULY SOYOIL Resistance should appear near 3909 to 3929 and the 4110 to 4120 region. Support should appear near 3806 to 3795 and 3743 to 3734.
JULY SOYMEAL
Resistance should appear near the 505.6 to 506.7 region. Beyond that sellers should appear near 512.7 to 513.9.
Support should appear near 492.6 to 491.5 and 485.6 to 484.5. Below that buyers should appear near 465.0 to 463.9. Trade Accordingly
AUGUST SOYMEAL
Resistance should appear near 477.5 to 478.5 and the 484.5 to 485.6 region.
Support should appear near 471.7 to 469.5 and the 458.2 to 457.1 region. Trade Accordingly
JULY CORN
Support should appear near 465 to 463 ¾ and the 458 ¼ to 457 ¼ region. Below that buyers should appear near 451 ½ to 450. Resistance should appear near 469 ½ to 471 ¾ , beyond that sellers should appear near the 484 ½ to 485 ¾ region.
JULY WHEAT
Support should appear near 619 to 616 ½ and the 603 ½ to 602 ¾ region. Resistance should appear near 633 ¾ to 635 and 665 ¾ to 667 ¼
THE LIVELY LIVESTOCK
AUGUST CATTLE
Support should appear near 13830 to 13770. Traders can buy at 13837 for a bounce and risk a close under 13767 for three days in a row.
Resistance should appear near 13990 and the 14150 to 14210 region.
OCTOBER CATTLE Support should appear near 14210 to 14150 and 13992. Below that buyers should appear near
13830 to 13770
Resistance should appear near 14400 and the 14530 to 14590 region where sellers should cap a rally.
JULY HOGS
Support should appear near 12030 to 11920, a close under is negative and augurs for a test of 11690 to 11640.. Resistance should appear near 12102 and 12175. Beyond that sellers should appear near 12320 to 12380 and 12457.
AUGUST HOGS
Support should appear near 12380 to 12320 and 12030 to 11960. Resistance should appear near 12527 and the 12680 to 12740 region.
OCTOBER HOGS
Support should appear near 10360 to 10320 and the 10137 to 10107 region. Traders can buy at 10142 for a bounce and hold for higher prices.
Resistance should appear near 10577 to 10677 and 10920 to 11010.
THE SATISFYING SOFTS
JULY COFFEE
Resistance should appear near 19020 to 19090 and the 20800 to 20890 region.
Support should appear near the 17380 to 17310 and the 16960 to 16890 region and should bring out buyers and contain a decline.
JULY COCOA
Resistance should appear near 3092 to 3102, a close over is friendly and augurs for a test of 3148 to 3157. Beyond that sellers should appear near 3194 to 3213.
Support should appear near 3045 to 3036 and the 2990 to 2972 region. Traders should go long if a close over 3103 occurs.
JULY SUGAR
Resistance is near 1774 to 1780, an extended trade over is friendly and augurs for a test of the 1858 to 1865 region. Support should appear near the 1738 to 1731 region. Below that buyers should appear near 1696 to 1689 and contain a decline.
JULY COTTON
Support should appear near 8589 to 8560 and the 8499 to 8484 region. Resistance is at 8668 to 8683, a close over is friendly and augurs for a test the 8856 to 8871 region.
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 1, 2014 12:45 PM South Florida Beach Time
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