Futures Trading Newsletter , Bi-Weekly Investment Outlook #490.
FuturesCom Futures Trading Newsletter Sunday January 3, 2016. 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
“Among the hazards of speculation the happening of the unexpected -I might even say the unexpectable – ranks high. There are certain chances that the most prudent man is justified in taking – chances that he must take if he wishes to be more than a mercantile mollusk-” Reminiscences of a Stock Operator, 1929
Friday January 1, 2016
5:00 AM, South Florida Beach Time
Contact our office if you need long or short term analysis for global equities, foreign exchange markets or commodities not covered in our Bi-Weekly Investment Outlooks. Stay tuned for flashes, updates and additional comments and recommendations. Trading and volatility both tend to pick up after the New Year’s Holiday and into the first few months of the year.
U.S. Stock Indices were mixed to lower on the year. The Nasdaq closed higher. The Dow Industrials, Transports, Russell 2000 and the SP500 were lower. On the month all Indices were lower. The Federal Reserve raised Interest rates in the U.S. a little.
Seasonally the stock market tends to firm up into year end and the first few trading days of the New Year. So far it’s been muted, the SP500 at year end is under the levels where it traded at Thanksgiving.
The seasonal trades during 2015 were mixed at best across the board for a plethora of markets and we have avoided many of them for that reason and it was the right thing to do. Traders should stay nimble.
Forex Markets; the euro long term downside targets remain well below the current trading ranges and levels. Traders may want to sell Euros. We remain lightly short. The 2015 lows are nearby and any real move past that could open up a door where the Euro may go back to levels not seen since just prior to the turn of the century. Cable downside support is 14590 to 14530 and really below that now at 14210 to 14150. Resistance is above the market at 14849 to 14960. Middle of the road selling should occur near 15210 to 15350.
The USD/CAD (Canadian Dollar Futures targets are lower) longer term targets remain higher. Dollar-Yen spent the year on either side of unchanged. On the downside support is at 11920 then 11805 and the 11690 to 11640 region. The nearby target on top is now 12680 to 12730.
Throughout 2015, the past decade and the previous one Japanese GDP has continued to disappoint policy makers. Dollar Yen typically rises into the end of the year and did not. The Nikkei 225 monthly work is tuning negative. Watch out for volatility and consider Yen a trading affair.
The Aussie and Kiwi longer term downside targets are lower. Seasonally the Aussie typically can firm a bit into first few weeks of the new year. Both the Kiwi and Aussie dollar long term remain lower and are trading affairs.
Precious Metals and Energy; Gold and Silver remain weak longer term and are trading affairs. Gold typically firms into the end of the year, it did not. April Gold is under 20 dollars away from contact lows. Gold closed the year and month down. Copper acts a little better, closed up on the month and was down for the year. Copper for the very short term acts ok but remains weak long term and is below the lows of the past several years. Copper can typically firm up a bit, how much is the question. Simply speaking, Copper is still a mess. Silver ended the year and the month lower. March Silver is near contract lows. Platinum acts ok for now. Platinum ended the year lower and month higher. Platinum has bounced a little after reaching down to 2008 lows. Generally speaking, the metals have room on both the downside and upside and the trends are down. Ditto for WTI Crude Oil, Brent Crude and the products, they all accelerated to the downside in 2015, bounced a bit and now are range bound. Heating Oil and Unleaded Gas and Natural Gas have years of price on top of the market and remain weak. Natural Gas left higher levels on top long ago and spent 2015 probing long term prices not seen for a while. Weather is not favorable for extraordinary increased use but can firm things up.
Grains; The floods in the U.S. are going to create volatility as traders try to assess the impacts on acres and transportation. World soybean production and stocks are at records or near records.
Soybeans, Meal and Soybean Oil all ended the year lower. On the month, Soybeans and Soymeal were lower, and near contract lows. May Soymeal closed at contract lows Friday and gave a weekend sell signal. Sell Soymeal. Soybean Oil ended the month higher and acts ok. Traders should look to sell a rally in Soybeans in advance of some possible weakness into February, then see how things develop at that point. Generally, traders should look to buy beans sometime in the middle of February for a trade and preferably at substantially lower prices than currently trading. We will take a look at that time.
Global El-Nino weather and geo-political issues will likely be in focus into mid- 2016. During the last record-strength El Nino, soybeans and meal fell significantly and soybean oil rallied. The current El-Nino is stronger than the most recent 1997/ 1998 El-Nino. Looking back at December of 1997; July 1998 soybean oil was near 25.00 and rallied to a high of 29.83 by May 8th, 1998. July 1998 soybean meal was near 205.00 in December and fell to a low of 151.80 by June 15th, 1998. July 1998 soybeans fell from near 720 to 606 1/2 by June 9th, 1998.
Wheat set back from recent highs. Wheat typically makes its highs of the season into early January. Wheat closed the year lower on the year and a little lower on the month. March Wheat is near contract lows. Corn is acting lousy. Corn closed lower on the year and the month. March Corn is near contract lows. Farmer selling should increase after the first of the year. Downside targets for nearby Corn is 312.
Front-end Live Cattle futures and Lean Hog futures ended the year lower and the month higher. Cattle may have made decade highs in 2015. Since then cattle fell apart and now has stabilized. Higher beef prices and the tight Cattle supply can still be supportive on declines. Weather may affect livestock movement and development at this time of year, so that is something to watch for since a delayed winter is upon us. The hog market is a trading affair and traders should stay tuned for flashes. We expect more hogs available for slaughter into the spring of 2016. Exports are lacking and the herd levels remain high. Spring and Summer Hog price peaks are likely just above the market at current levels. Sell April hogs on a rally. June hogs may not be able to breach 80.00 cents this summer and selling them near 80.00 may work out. Spreaders can buy August Hogs and Sell February Hogs at current prices. We also like Selling April and Buying June as a spread. Look to re-enter the trades early this week. Consider the livestock markets a trading affair, and stay tuned for livestock flashes and updates.
Coffee ended the month higher and the year lower. Looking ahead a bit into next year, estimates of Coffee’s global supply/demand balance for 2015/ 2016 are wide. Brazil’s Coffee crop is expected be a large one. Weather may also come into play in Coffee again. The seasonal suggest a firm period
that ends in Mid-January. The peaks for year tend to be in March. Traders should not be surprised to see a wide range for the year and under 1.00 is clearly possible.
Sugar advanced enough on diminished excess global supplies to end the year a little higher. During January Sugar can typically show weakness. Consider sugar a trading affair. Trade both sides.
Cotton continues to bounce around and ended the year and month a little higher. Cotton held some good support during the year at prices below the current prevailing price and has rallied a little.
Cotton is a trading affair.
Cocoa ended the year higher and the month lower. The long term Cocoa charts are rolling over. Cocoa’s highs in 2016 may be highs for a long time. January tends to show rangebound trading and bit of weakness. The 4th Quarter Cocoa grinding reports will be released in the middle of the month. The El-Nino impact on West African and Indonesia growing weather has been supportive and is beginning to wane even though Ivory Coast port arrivals are behind last season. The best demand growth regions for Cocoa are areas of the world that have the best population growth and income growth and that region is becoming resistant to higher prices.
On to the Nitty Gritty.
THE SENSATIONAL STOCK AND BOND MARKET
DOW JONES INDUSTRIAL AVERAGE Support is at the 16,960.00 to 16,890.00 region. Below that buyers should appear near the 16,550.00 to 16,420.00 region.
Resistance should appear near 17,560.00 and the 17,740.00 to 17,800.00 region. Beyond that sellers should appear near 18,080.00 to 18,220.00
DOW JONES TRANSPORTS
Support should appear near 7342.00 to 7328.00, below that a test of 7088.00 to 7074.00 and the 7003.00 to 6990.00 region is likely.
Resistance is at 7587.00 to 7601.00 and the 7763.00 to 7777.00 region where sellers should appear and cap a rally.
MARCH E-MINI SP500
Resistance should appear 2042.00 then 2061.50 and 2080.00 to 2089.00 region.
Support should appear near 1953.00 to 1946.00 and the 1909.00 to 1902.00 region Traders can buy at 1909.75 for a bounce and risk a close under 1901.00 for three days in a row. Aggressive Traders should go short if a close under 2033.25 occurs. Stay tuned for flashes
NASDAQ COMPOSITE
Resistance should appear at 5056.00 to 5067.00 and the 5127.00 to 5136.00 region. Support should appear near the 4856.00 to 4845.00 region. Below that buyers should appear near the 4785.00 to 4775.00 region.
MARCH E-MINI NASDAQ 100
Support should appear near 4571.00, a close under is negative and augurs for a test of 4514.00 to 4503.00. Below that a test of the 4446.00 to 4425.00 region is likely. Resistance is at the 4639.00 to 4650.00 region. Beyond that sellers should appear near 4695.00 to 4717.00. Traders can sell at 4691.00 and risk a close over 4722.00 for three days in row.
MARCH E-MINI RUSSELL 2000
Resistance should appear near 1136.00 and the 1164.00 to 1169.00 region. Traders can sell at 1163.90 and hold for lower prices. risk a close over 1169.90 for three days in a row. Support should appear near 1101.00 to 1096.00. Below that a test of the 1068.00 to 1058.00 region is likely.
MARCH 30 YR BONDS
Resistance should appear near 154-17 and 155-07. Beyond that sellers should appear near 156-12.
Support should appear near 152-21 and 152-07. Below that a test of 151-21 is likely.
MARCH 10 YR NOTES
Resistance should appear near 126-97 and 126-22. Beyond that sellers should appear near 127-21 and cap a rally.
Support should appear near 124-21 and 123-22. Below that 123-07 should hold.
THE FRENZIED FOREX FRONT
MARCH DOLLAR INDEX
Resistance should appear near 9921 to 9937 region. A close over is friendly and augurs for a test of 10021 to 10037. Support should appear near 9837 to 9821 and the 9737 to 9706 region.
MARCH JAPANESE YEN
Resistance should appear near 8391 to 8406 and 8484 to 8499. Support should appear near 8314 to 8300 and 8223 to 8194 region
MARCH EURO CURRENCY
Support should appear near 10820. A close under is negative and augurs for a test of 10680 to 10580. Resistance should appear near 10960 to 11010 and 111155. Traders should go short if a close under 10817 occurs.
MARCH SWISS FRANC
Resistance should appear near 10104 to 10136 and 10320 to 10360.
Support should appear near 10021, an extended trade under is negative and augurs for an eventual test of 9837 to 9821. Trade accordingly
MARCH BRITISH POUND
Support should appear near 14590 to 14530 and the 14210 to 14150 region Resistance should appear near 14840 to 14960 and the 15290 to 15350 region.
Traders should go short if a close under 14712 occurs.
MARCH CANADIAN DOLLAR
Resistance should appear near 7242 to 7255 and the 7328 to 7342 region. Beyond that sellers should appear near 7414 to 7428.
Support should appear near the 7170 to 7143 and the 7003 to 6990 region.
MARCH AUSSIE DOLLAR Resistance should appear near 7328 to 7342 and the 7414 to 7428 region. Where sellers should appear and cap a rally.
Support should appear near 7255 to 7242, a close under is negative and augurs for a test of 7088 to 7074. Traders should go short if a close under 7237 occurs.
THE PRECIOUS METALS
FEBRUARY GOLD
Resistance should appear near 1082.00 and the 1096.0 to 1101.0 region.
Support should appear near 1058.0, a close under is negative and augurs for a test of the 1036.0 to 1032.0 region.
MARCH COPPER
Resistance should appear near 21700 to 21850 and the 22190 to 22260 region and cap a rally.
Support should appear near 20890 to 20800 and the 20420 to 20430 region. Failure there is negative and augurs for a test of 18650 to 18580.
MARCH SILVER
Support should appear near 1377.0, a close under is negative and augurs for a test of 1346.0 to 1334.0 region. Below that buyers should appear near 1310.0 to 1304.0 and contain a decline.
Resistance is at 1415.0 to 1421.0 and the 1453.0 to 1459.0 region.
THE EXCITING ENERGIES
FEBRUARY CRUDE OIL
Support should appear near the 3623 to 3613 region. A close under is negative and augurs for a test of the 3563 to 3553 region. Below that a test of the 3503 to 3493 region is likely.
Resistance should appear near 3795 to 3806 and the 3858 to 3867 region. Traders can sell at 3851 and hold for lower prices. Stay tuned for day trade and updates.
MARCH CRUDE OIL
Support should appear near 3806 to 3795 and the 3682 to 3663 region. Below that a test of 3623 to 3613 is likely.
Resistance should appear near 3909 to 3929 and the 3982 to 3992 region. Traders should go short if a close under 3731 occurs.
MARCH BRENT CRUDE OIL
Support should appear near 3743 to 3734 and the 3623 to 3613 region. A close under is negative.
Resistance should appear near 3909 to 3929, a close over is friendly and augurs for a test of the 4046 to 4056 region where sellers should appear and cap a rally.
FEBRUARY HEATING OIL
Support should appear near the 11010 to 10920 region. Below that a test of 10680 to 10580 is likely.
Resistance should appear 11360 and the 11690 to 11640 region. Beyond that sellers should appear near 11920 to 12030 and cap a rally.
FEBRUARY UNLEADED GAS
Support should appear near 12380 to 12320 and the 12030 to 11920 region.
Resistance should appear 13040 to 13100 and the 13340 to 13460 region.
MARCH NATURAL GAS
Support should appear near 2.322 to 2.311 and the 2.275 to 2.267 region
Resistance should appear near 2.411 to 2.419 and the 2.511 to 2.519 region
THE GRANDE’ GRAINS
MARCH SOYBEANS
Support should appear near 858 ¾ to 856. Failure to hold is negative and augurs for a test of 849 ¾ to 848 ½ and the 831 ½ to 830 region.
Resistance should appear near the 876 ¼ to 877 ¾ region. Beyond that sellers should appear near 885 ¾ to 887 ¼ and the 893 ½ to 896 ½ region. Traders can sell at 893 and hold for lower prices. Traders should go short if a close under 855 ¾ occurs.
MARCH SOYOIL Support should appear near 3045 to 3038 and the 2990 to 2972 region.
Resistance should appear near 3148 to 3157 and 3194 to 3213.
MARCH SOYMEAL
Resistance should appear near 266.3 to 267.2 and the 271.6 to 272.4 region Beyond that sellers should appear near the 275.8 to 277.4 region and cap a rally.
Support should appear near 262.0 to 261.2. A close under is negative and augurs for a test of 251.9 to 251.1. Aggressive traders should go short if a close under 264.1 occurs.
MARCH CORN
Support should appear near 350 ¼ to 349 ¼ and the 338 ¾ to 337 ½ region. Below that buyers should appear near 321 ¼ to 319 ½. Resistance should appear near 361 ¼ to 362 ¼ and the 366 ¼ to 368 ¼ region. Beyond that sellers should appear near 373 ½ to 374 ¼ and cap a rally.
MARCH WHEAT
Support should appear near the 465 to 463 ¾ region. Below that buyers should appear near 451 ¼ to 450 ¼ and the 444 ¾ to 442 ½ region.
Resistance should appear near 477 ½ to 478 ½ and the 485 ½ to 484 ¾ region.
THE LIVELY LIVESTOCK
FEBRUARY CATTLE Support should appear near 13460 to 13340 and the 13100 to 13040 region.
Resistance should appear near 13770 to 13830 and 14150 to 14210 region.
APRIL CATTLE
Support should appear near 13680 and the 13460 to 13340 region.
Resistance should appear near 13987 and the 14150 to 14210 region
FEBRUARY HOGS Support should appear near 5942, a close under is negative and augurs for a test of the 5882 to 5857 region. Below that buyers should appear near the 5577 to 5552 region.
Resistance should appear near 6022 to 6037 then 6102 to 6112 and the 6162 to 6192 region. Traders can sell at 6102 and risk a close over 6192 for three days in a row.
APRIL HOGS
Resistance should appear near 6657 to 6672. Beyond that sellers should appear near the 6742 to 6757 region and cap a rally. Traders can sell at 6737 and hold for lower prices.
Support should appear near the 6572 and the 6512 to 6482 region. Below that a test of 6252 to 6337 is likely. Aggressive Traders should go short if a close under 6537 occurs.
Stay tuned for Livestock flashes and updates.
THE SATISFYING SOFTS
MARCH COFFEE
Resistance should appear near 12740 and the 13040 to 13100 region. Beyond that 13340 to 13460 should bring sellers out of the woodwork and cap a rally. Support should appear near 12380 to 12320. A close under is negative and augurs for a test of 12030 to 11920. Below that a trade towards 11360 to 11300 is likely.
MARCH COCOA Support should appear near 3157 to 3148 and the 3102 to 3092 region. Below that buyers should appear near 3045 to 3036. Resistance should appear near 3261 to 3270 and the 3319 to 3328 region. Beyond that sellers should appear near 3377 to 3386 and cap a rally. MARCH SUGAR Resistance is near the 1529 to 1535 region. Beyond that sellers should appear near 1569 to 1576 Support should appear near 1496 to 1484 and the 1459 to 1453 region.
MARCH COTTON
Support should appear near 6270 to 6257 and the 6035 to 6023 region.
Resistance is at 6337 to 6350 and the 6417 to 6430 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 January 3, 2016 1:45 PM South Florida Beach Time
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