FuturesCom Bi-Weekly Investment Outlook # 454 August 10 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
Accomplishments will prove to be a journey, not a destination.” -Dwight D. Eisenhower-
Friday August 08, 2014
11:00 PM, South Florida Beach Time.
Traders should stay nimble and stay tuned for flashes. The geopolitical tensions in Eastern Europe and the Mideast remain the same. Now the Ebola virus is spreading rapidly and has been declared an international emergency… Baghdad is likely to come under pressure over the next 30 to 60 days. Iraq is a mess, has effectively split into parts and it’s unlikely that it will ever be put back together. The Kurds were promised safety 20 years ago and so was Ukraine. When push came to shove some promises have been abandoned. That said U.S stocks are mixed on the year. The Russell 2000 is lower, the Dow is zilch from year end levels. Transports and Nasdaq are higher from year end. Overseas the German Dax lower from year end, at the October highs from last year and a mess while Draghi dithers. The Nikkei is down on the year. Interest rates are essentially at zero. The Long Term 30 Year Bond Futures technicals have moved to a buy on the long term charts. Trade wars are sprouting up across the globe in one form or another. Sanctions, embargoes whatever you want to call them are really another word for a trade war. When trade wars clash with financial engineering the results can be lousy. Maybe not bloody, but lousy. Thus trading ranges have increased. Speaking of sanctions.. The U.S. has been shipping virtually no beef and about a third less chicken as we once did to Russia.
Pork exports to Russia had increased 20.7 % to 25.1 million pounds in May and June after being below 10 million pounds every month since December 2012 and at zero for 12 of those 17 months, this is not really as important for U.S. export sales as it once was. One industry opinion of the Russia business is, they are not steady customers and they do not like to pay for it. The bigger issue will be for Canadian pork, Russia is Canada’s third largest export market behind the U.S. and Japan buying just over 8% of Canadian pork production.
Russia will likely move to some sort of energy punishment against Europe once winter approaches.
Europeans should go and buy a sweater now and consider moving production facilities to the U.S.
Something to ponder… When data is released and we hear talk of ‘Growth of .1 or 1.1 in whatever region (no matter where the region is), all of us have to realize these points of data are statistically insignificant when at such low levels. It’s like walking into a store and find the item you want to buy and the price is a penny or two different from the last week… up or down…. It does not matter.
Long term support for the Dow is well below the prevailing recent trading ranges , and is no way near ANY level that could be termed bloody enough to buy with ‘both hands’ now. That said any sell off of consequence may not happen for a while. However our medium term upside targets from the lows in 2009 have been met for now. Long term, I mean years ahead we can see a higher market and the yearly work remains friendly however caution is now due. Thus a trading affair…
In Forex Markets the Euro remains a bit lower on the year. Our short term downside targets have been met. Longer term downside targets are well below the current levels. The long term technicals have turned negative for the first time since 2011. Cable is higher on the year and remains in a tight trading range. Cable has support at year end levels 16550 to 16420. USD/CAD is still broadly range bound. Forex traders should look for a dip against 10680 to 10580 to buy. The employment data coming out of both Canada and Australia is rather negative. The near term upside target for USD/CAD at 10960 to 11010 has been met. Over the longer term the targets are higher. The Dollar-Yen remains a trading affair. Dollar-Yen typically weakens into autumn and is likely on that path until the BOJ does more to support the Japanese economy. Which will likely come after panic ensues, (same goes for the rest of the central banks). Considering that rates are essentially zero in Japan and population data is broadly negative there is not a lot else Japan can do, unless Japan re-arms itself.
The positive for the Japanese stock market comes from increased allocation of Japanese pension funds to the Japanese stock market. Domestic growth in Japan is largely led by increased prices from higher taxes. So the data is nice. Why not raise taxes by another 25 % that should produce great data?
Analysis for a variety overseas equity and foreign exchange markets is now available upon request,
for more detailed information or additional economic analysis please call or email a request.
Precious Metals and Energy; Gold acts better is up on the year and now year over year by a hair.
Gold may continue to get help for buyers seeking safety from global stress however both have been in a range now for the past year. Copper is struggling, remains well off the recent lows but can turn and bounce around here based on Chinese data, once the government makes good to the home buyers and buys back all the homes there that have lost value at 40 % above the purchase price.
Crude is also trading affair, one year ago spot crude was 107.00 and is lower now. Supplies are ample but geopolitical risk to supply has increased. However Crude Oil long term charts are rolling over to the downside. Typically a low is made in the winter and early in the year, traders and investors should begin preparing for that now…Grains and Livestock; Livestock markets are a day to day trading affair and extremely oversold. Look for a rally back in October Hogs to 103 perhaps as high on 106 on short covering. August Hogs go off the board next week and indications are for a trade towards 11600 to 12000. Cash cattle is near 160.00 and there have been no deliveries. Buying April Cattle into this break could see higher prices into the fall and winter.. Soybeans act better, however Bean Oil looks like it is heading back to 5 to 10 year lows as does corn. If the January or March Soybeans rally back to a region where premier clients can sell for a break into the end of the year consider selling
For now Soybeans have bounced and therefore both sides can be played. There is an old saying Big crops get bigger.. Softs; Cocoa remains at multi-year highs. If the Ebola virus enters the Ivory Coast expect a highly volatile market… Sugar is in the same range it has been for the last year lower on the year and is oversold. Coffee tends to make lows Mid-August then is steady into the end of the year…
However it’s pricey and is a trading affair. The upside targets near term have been met. Cotton has stalled its decline is oversold, if it does test near 55 cents it’s likely a buy. 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 16,150.00 to 16,090.00 and below that a test of 15,760.00 to 15,690.00 is likely.
Resistance is at 16,890.00 to 16,960.00 where sellers should appear and cap a rally
DOW JONES TRANSPORTS
Support should appear near 7864.00 to 7836.00 and the 7342.00 to 7328.00 region
Resistance is at 8194.00 to 8223.00 and 8300 to 8314.00
SEPTEMBER E-MINI SP500
Resistance is at 1946.00 to 1953.00 and the 1982.00 to 1996.00 region, where sellers should appear and come out of the woodwork and cap a rally.
Nearby Support should appear near 1909.00 to 1902.00, below that a test of 1865.00 to 1858.00 is likely. Under that buyers should appear near 1822.00 to 1808.00. Traders can buy at 1823.00 for a bounce and risk a close under 1807.50 for three days in a row.
Trading under 1902.00 is negative and has occurred…a close augurs is more negative.
Traders should go short if a close under 1901.75 occurs.
NASDAQ COMPOSITE
Resistance should appear at 4503.00 to 4514.00 and the 4571.00 to 4582.00 region.
Support should appear near 4315.00 to 4304.00 and 4183.00 to 4163.00
SEPTEMBER E-MINI NASDAQ 100
Support should appear near 3806.00 to 3795.00 and really good support is near 3623.00 to 3613.00
Resistance is at 3982.00 to 3992.00 and the 4046.00 to 4056.00 region.
Traders should go short if a close under 3857 occurs.
SEPTEMBER E-MINI RUSSELL 2000
Resistance should appear at near 1164.00 to 1169.00 and 1192.00 to 1203.00.
Support should appear near 1101.00 to 1092.00. Below that a test of 1068.00 to 1058.00 is likely.
SEPTEMBER 30 YR BONDS
Resistance should appear near 140-21 and 143.21. Where sellers should cap a rally..
Support should appear near 138-21 and 138-07.
SEPTEMBER 10 YR NOTE
Resistance should appear near 128-21 and 129-07
Support should appear near 125-21, below that buyers should appear near 124-17 and 124-07.
THE FRENZIED FOREX FRONT
SEPTEMBER DOLLAR INDEX
Resistance should appear near the 8194 to 8223 region where sellers should cap a rally.
Nearby support remains at 8134 to 8119 and below that near 8044 to 8029 and 7954 to 7939.
SEPTEMBER JAPANESE YEN
Resistance should appear near 9921 to 9937, beyond that a test of 10021 to 10037 is likely.
Support remains near the 9737 to 9706 region.
SEPTEMBER EURO CURRENCY
Support should appear near the 13400 to 13340 region. A close under is negative and augurs for a test of 13100 to 13040.
Resistance is at 13460 then 13537 and 13615. Traders can sell at 13533 and risk 50 points
SEPTEMBER SWISS FRANC
Resistance should appear near 11155 and 11300 to 11360.
Support remains near the 11010 to 10960 region. Below that a test of 10820 is likely.
Trade accordingly
SEPTEMBER BRITISH POUND
Support should appear near 16550 to 16420 and 16150 to 16090. Traders can buy at 16550 for a bounce and initially risk a close under 16410 for three days in a row.
Resistance should appear near 16890 to 16960 and the 17310 to 17380 region.
SEPTEMBER CANADIAN DOLLAR
Resistance should appear near 9140 to 9156 and 9237. Traders can sell at 9137 and risk a close over 9157 for three days in a row.
Support should appear near 9060 to 9044, a close under is negative and augurs for a test of
8964 to 8934.
SEPTEMBER AUSSIE DOLLAR
Support should appear near the 9156 to 9140 and should hold, a close under is negative and augurs for a test of 9060 to 9044.
Resistance should appear near 9316 to 9347. Traders can sell at 9307 and risk a close over 9357 for three days in a row.
THE PRECIOUS METALS
DECEMBER GOLD
Resistance should appear near 1334.0 to 1346.0, beyond that a test of 1377 to 1383 is likely and should cap a rally.
Support should appear near 1310 to 1304 and 1274.0 to 1268.0.. where buyers should appear and contain a decline.
SEPTEMBER COPPER
Resistance should appear near 32610 to 32700 and 33190 to 33280
Support should appear near 31570 to 31480, below that a test of 31020 to 30920 is likely and should hold..
SEPTEMBER SILVER
Support should appear near 1953.0 to 1946.0 and 1909.0 to 1902.0
Resistance is at 2080.0 to 2089.0 and 2126.0 to 2134.0
THE EXCITING ENERGIES
DECEMBER CRUDE OIL
Support should appear near 9347 to 9316 and 9156 to 9140
Resistance should appear near 10021 to 10037 and the 10104 to 10136 region. Where sellers should appear and cap a rally. Traders can sell at 10101 and risk a close over 10141 for three days in a row.
OCTOBER BRENT CRUDE OIL
Resistanceshould appear near 10680 then 10820 and 10960 to 11010.
Supportshould appear near 10470 and 10360 to 10320.
OCTOBER HEATING OIL
Support should appear near should appear near 28740 and 28200 to 28290.
Below that test of 27750 to 27580 is likely.
Resistance should appear 29280 to 29370 and 29720 to 29900 and should be sold till the cows come home unless there is a real event.
OCTOBER UNLEADED GAS
Support should appear 25680 to 25520, below that buyers should appear near 25190 to 25110
Resistance should appear near 27160 to 27240 and 27580 to 27750, beyond that sellers should appear near 28740 to 28830.
OCTOBER NATURAL GAS
Resistance should appear 4.046 to 4.056 and 4.238 to 4.249
Support should appear near 3.867 to 3.8.58 and 3.623 to 3.613 where buyers should appear and contain declines.
THE GRANDE’ GRAINS
NOVEMBER SOYBEANS
Support should appear near 1082 and 1068 to 1058, below that a test of 1036 to 1032 is likely.
Resistance should appear near 1096 to 1101 and 1130 to 1136.
Aggressive Traders should go Short if a close under 1081 ½ occurs
DECEMBER SOYOIL
Support should appear near 3443 to 3425 and 3326 to 3319.
Resistance should appear near 3663 to 3682 and 3734 to 3743. Traders can sell at 3731 and risk a close over 3757 for three days in a row.
DECEMBER SOYMEAL
Resistance should appear near 368.3 to 369.2 and 385.8 to 386.7
Support should appear near 327.0 to 326.1 and 304.5 to 305.3
DECEMBER CORN
Support should appear near the 344 ½ to 342 ¾. Below that a test of 327 to 326 ¼ is likely
Resistance should appear near 373 ½ to 373 ¾ and 398 ½ to 399 ½.
DECEMBER WHEAT
Support should appear near 513 ¾ to 512 ½ and 499 ½ to 497 ¾
Resistance should appear near 571 ¾ to 572 ¾.and 585 ½ to 588
THE LIVELY LIVESTOCK
OCTOBER CATTLE
Support should appear near 14960 to 14840 and 14590 to 14530
Resistance should appear near 15290 to 15350 and 16090 to 16150
OCTOBER HOGS
Support should appear near 9737 to 9707 and 9347 to 9312
Resistance should appear near 10320 to 10360 and 10580 to 10680
DECEMBER HOGS
Support should appear near 8872 to 8852 and 8777 to 8762
Resistance should appear near 9317 to 9347 and 9922 to 9937
THE SATISFYING SOFTS
DECEMBER COFFEE
Resistance should appear near 19020 to 19090 and 20340 to 20420.
Support should appear near 17800 to 17740 and 17380 to 17310 below that buyers should appear near 16960 to 16890. Traders can buy at 16970 and initially risk a close under 16870 for three days in a row. Stay tuned for flashes…
DECEMBER COCOA
Resistance should appear near 3261 to 3270 and the 3319 to 3328 region.
Support should appear near 3157 to 3148 and 3102 to 3092 region.
OCTOBER SUGAR
Resistance is near the 1731 to 1738 and 1774 to 1783.
Support should appear near 1655 to 1642 and should hold
DECEMBER COTTON
Support should appear near 6350 to 6337 and 5880 to 5855.
Resistance is at 6743 to 6755 and 6809 to 6836.
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 August 09, 2014 1:35 PM South Florida Beach Time
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