Futures Trading Newsletter ‘Bi-Weekly Investment Outlook’ #469.
FuturesCom Futures Trading Newsletter Saturday March 07, 2015. 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
We are what we repeatedly do. Excellence, then, is not an act, but a habit.”
-Aristotle-
Saturday March 07, 2015
4:00 AM, South Florida Beach Time
Traders should remain prepared for wide movements across the board for many markets. Stay tuned for additional flashes, updates and most of all stay nimble.
Major U.S. Stock Indices are now mixed on the year. The Jobs number on Friday was good, apparently not good enough. Stocks closed lower Friday on ‘fears of rate hikes’. The interest rate environment in the U.S. is still zero. There are three weeks left in the first quarter. On the year the Dow Transportation Average is down a bit, Dow Jones Industrial Average is up 30 points, SP500 March Futures are up a little and Nasdaq Composite is up. Long-term support for U.S. stock markets is well below current levels. Monetary policy and government support for the economy is still extreme and has not changed. 30-Year Bond futures and 10-Year T-Note futures are lower on the year. Global geopolitical concerns have risen, keep an eye out for spring offensives by all parties involved in conflicts.
Last week the Fed’s Williams said if Europe and Japan were stronger the forecast for U.S. GDP growth would be closer to 4 pct. Subsequently the Euro-zone GDP came out at 0.9 % on a year over year basis. The quarterly figure was 0.3 %. The Eurozone is one-step away from a recession if any slowdown occurs. That said, the European Central Bank (ECB) is going to begin to implement quantitative easing on Monday. In the wake of the details about the implementation, many asset class prices were lower last week.
In the Forex markets the Euro Currency made new contract lows on Friday and gave a ‘weekend rule’ sell signal by a little bit. The U.S. Dollar index was borderline for a weekend buy rule. March Lumber had a weekend sell rule.
The Euro failed the 11010 to 10960 region. Resistance is now at 10960 to 11010 and 11300 to 11360. Support lies near 10680 to 10580. The Euro has broken down and is now accelerating to the down side. Nothing has changed. Speaking of central banks the Swiss National bank (SNB) said last week that it does not exclude suspending or reducing profit distributions in some years, due to considerable volatility in its own results. The Swiss Central Bank further said its financial result depends largely on developments in the Gold, forex, and capital markets. Apparently they have some issues at the SNB.
According to February survey from the Bank of England (BOE) inflation expectations In the U.K one year out are the lowest since Nov 2001 at 1.9% versus the level in November of 2.5%. Rates have not changed in the U.K. Downside nearby support for cable is 14960 to 14840. Below that a test of the 14590 to 14530 region is likely. BOE Carney and other policy-making members of the BOE have said they expect the BOE’s next policy move to be to tighten rather than loosen policy. We have seen what the Carney foresaw in Canada and may be possible he is missing the mark in the U.K. Long-term Cable can fall to 1.35 as macro-shifts in population occur in Europe. Resistance above the market is now 15290 to 15350. Seasonally cable rises after next week until early April. Stay tuned for Flashes. The U.S. Dollar-Canadian Dollar (USD/CAD) firmed up Friday. The trading range has not changed. USD/CAD has some support at 12380 to 12320. Resistance remains near 12680 to 12740. Looking at Canadian Dollar futures (inverse of USD/CAD) support is at 7777 to 7763. Resistance is at 8029 to 8045 and 8119 to 8223. Those buying Canadian Dollar futures for a seasonal play (and they are buying it) might be in for some side-ways movement. The macro-economic change occurring in Canada may temper any up move. The Bank of Canada left monetary policy unchanged last week. The risk to the downside for Canuck futures is a move under 7000 longer term. Sell into the 8300 region if you can. Short-term traders can play both sides. We continue to think there is significant risk to downside in Japanese stocks over the next 6 months. On Wednesday of next week (Mar 11), the Japanese Cabinet Office will release January machinery orders. Traders should look at Japanese Yen Futures as a trading affair. Spot Dollar-Yen (inverse of the futures) continues to trade near unchanged to a bit higher on the year. On the downside, the USD/JPY support is at 12030 to 11920 and 11815. Below that 11690 to 11640 should hold. The nearby resistance is 12320 to 12380 with higher tests down the road. Nothing has changed for the Aussie and Kiwi. Long-term downside targets remain lower for both the Kiwi and Aussie. Sell rallies.
Chinese Finance Ministry official Lou Jiwei last week said the global deflation trend was going to strengthen and the world economic recovery including the U.S. is still unclear. China’s Local Governments are going to start buying vacant unsold homes for use in public housing.
Ok, recovery from what?. The great recession ended a long time ago…
Analysis for overseas equity and foreign exchange markets are available upon request. For a country-by-country analysis for trading or hedging please call or email a request.
Precious Metals and Energy; gold and silver are now lower on the on the year and lower than the last day of trading for 2013 as well. Gold and silver remain weak longer term. Ditto for copper. Copper remains weak and is lower on the year. Support is well below prevailing trading levels. Natural Gas prices are essentially unchanged to a little lower on the year.
WTI Crude Oil, Brent Crude and the products have continued to bounce around and experience wide trading ranges and are trading affairs. Stay tuned for flashes.
Traders should expect some volatility the grain markets next week. The USDA monthly crop report is due out Tuesday March 10 (our estimates for the USDA report will be delivered separately).
Corn, Soybeans and the products are all lower on the year. Wheat fell apart again. Unfortunately, we missed selling by 6 cents or so before it fell apart. Typically, lows in Wheat are not seen until sometime in July. Traders should continue to consider selling any rally. Wheat is lower on the year. Digging down deep for trading, Soybeans typically are higher than mid-February during mid – March to April.
Our price to buy May beans did not hit and they are trading at mid-February levels now. Beans are likely a trading affair. Corn acts range bound. Livestock remains weak long term. The USDA said EU beef shipments outside the EU at a four-year high and higher than previously forecast. The USDA has forecast pork exports outside the EU will be the highest since 1992. The expansion into Asia regions such as normal US export havens like South Korea and Japan is growing. A weak Euro Currency and output efficiency is likely mitigating exports from the U.S. Euro-zone pork output this year is expected to be 2.7% higher, rather than down as the U.S. government agency had previously forecast. We could be looking at a pork export price war on the horizon. The U.S. pork industry has plenty of ammo.
With corn somewhat cheap, hogs weights are continuing to stay as large as “The Refrigerator Perry”. Weights last week were 284.2 pounds, down just under a half a pound from the week before but up 2.4 pounds versus last year and up 8.1 pounds from two years ago. For 100 weeks in a row the weights have been heavier than a year earlier. Friday pork cutout value (in the morning) was $68.58, down $1.40 from last week and down $42.51 versus a year ago. The cut-out has fallen for seven weeks in a row. Pork belly prices are less than half of what they were a year ago and are the lowest since November 2009.
Unfortunately retail prices so far have not come down to spur demand, well neither has coffee prices, nor have sugar prices.
Some are wondering if bacon demand is falling. Probably not, since bacon flavored ice cream is available at some grocers. Perhaps that is a sign of how goofy things are, and it is the end of the increase in bacon demand that began 5 years ago.
Hog slaughter last week was 2.222 million head up 7.2% versus last year. Hog slaughter has been above a year ago for seven weeks in a row. Pork production during the same period has been up 6.8%. Taking all this into account the hog slaughter has been 1.3% than one would expect when looking at the data from the last pig crop report at the end of December. In North America, the Canadian hog inventory data at the start of 2015 was released last week. Canada began the year with 13.165 million hogs, up 1.7% versus last year. The breeding herd north of the border is up 0.5% versus a year ago. The USDA said the U.S. Hog inventory was up 2.0% on December 1 with a breeding herd that was 3.6% larger versus the previous year. Taking both into account the North American herd is up 3.1% for the breeding herd and up 1.9% for all hogs and pigs.
This situation could last a while, consider selling the late summer and Autumn Hogs on a rally. That said there is likely to be a lot of price movement in both Live Cattle and Lean Hogs. The Jobs data ‘should’ be helpful for domestic demand of meat. Unless, perhaps domestic eating habits are changing. Maybe as a country’s population ages, the habits do change. June Cattle seasonally tends to weaken into the last part of March. July hogs and August hogs both are typically firm up until Mid-March or a bit later. June Hogs are also is typically strong, however its’ long seasonal just ended and it did not work. Traders should take all of this into consideration. April Hogs are a trading affair. Especially since bad weather across much of the country is about to end. Buying April and selling June at 15.00 to 16.00 under the current trading environment is a trade to consider. Stay tuned for livestock flashes and updates.
In the Soft Commodities, Coffee fell apart once again, all the price increase from last year is gone and Coffee is now a mess. Coffee is sitting on top of the highs from 2005. Seasonally, selling Coffee next week makes money until mid-April. Buying Coffee maybe in the summer and looking for a winter weather play in Brazil may be a trade to consider down the road. Sugar is a mess, the sugar export wars have started between India and Brazil. Soft global demand and weak energy are likely to continue to pressure sugar over time. Sugar may be heading under 12.00. Sell a rally for a trade. Cotton is higher on the year. The U.S Cotton growing season is just ahead. Long term nothing has changed. Cocoa produced a long-term sell signal and rallied back sharply. Traders should consider selling July and farther out contracts. Uncertainty remains over the West African Cocoa mid-crop because of hot and dry weather. Cocoa is now a trading affair near 3000. Cocoa is a little higher on the year and a little lower on the month. Onto the Nitty Gritty
THE SENSATIONAL STOCK AND BOND MARKET
DOW JONES INDUSTRIAL AVERAGE Nearby support is at 17,800 to 17,740.00 and 17570.00. Below that 17,380.00 to 17,310.00 should hold. Better support remains near the 16,960.00 to 16,890.00 region and should contain a decline. Resistance is at 18,080.00 18,220.00. Beyond that sellers should appear near the 18,580.00 to 18,650.00 region and cap a rally.
DOW JONES TRANSPORTS
Support should appear near 9060.00 to 9044.00 and 8964.00 to 8934.00. Below that, buyers should appear near 8964.00 to 8934.00 and contain a decline.
Resistance is at 8934.00 to 8964.00 and 9044.00 to 9060.00. Beyond that sellers should appear near 9140 to 9160 and the 9,316.00 to 9,347.00 region and cap a rally.
JUNE E-MINI SP500
Resistance should appear near 2080.00 to 2089.00 and the 2126.00 to 2134.00 region and cap a rally. Beyond that sellers should appear near 2170.00 to 2185.00
Support should appear near 2042.00 to 2034.00. Below that buyers should appear near
1996.00 to 1982.00. Traders can buy at 1997.00 for a bounce and risk 5 points.
NASDAQ COMPOSITE
Resistance should appear at 5056.00 to 5067.00 and the 5127.0 to 5139.00 region. Support should appear near 4856.00 to 4845.00 and the 4785.00 to 4775.00 region.
JUNE E-MINI NASDAQ 100
Support should appear near 4370.00 and 4315.00 to 4304.00. Below that buyers should appear near the 4249.00 to 4238.00 region. Resistance is at 4425.00 to 4446.00 then 4503.00 to 4514.00 and the 4571.00 to 4582.00 region.
JUNE E-MINI RUSSELL 2000
Resistance should appear near 1217.50 then 1232.00 to 1238.00 and 1253.00. Support should appear near 1203.00 to 1192.00 and the 1169.00 to 1164.00 region.
JUNE 30 YR BONDS
Resistance should appear near 156-21 and 157-17. Beyond that, sellers should appear near 159-22. Above that, a test of 160-21 and 161-12 is likely
Support should appear near 155-17 and should continue to find some support. Under that buyers should appear 153-22 and 152-21 contain a decline.
JUNE 10 YR NOTE
Resistance should appear near 126-21 and 127-12 . Beyond that sellers should appear near 128-07 and 129-07, where sellers should appear and cap a rally. Support should appear near 125-21. Below that a test of 124-21 is likely. Under that 123-21 and
123-07 should contain a decline.
THE FRENZIED FOREX FRONT
JUNE DOLLAR INDEX
Resistance should appear near 9821 to 9827 , a close over augurs for a test of 9921 to 9937. Beyond that a test of sellers should appear near 10021 to 10037.
Nearby support should appear near 9737 to 9706 and the 9641 to 9625 region. Below that buyers should appear near 9541 to 9526.
JUNE JAPANESE YEN
Resistance should appear near 8300 to 8314and the 8391 to 8406 region. Beyond that sellers should appear near 8484 to 8499 and cap a rally.
Support should appear near 8223 to 8194 and the 8134 to 8119 region.
JUNE EURO CURRENCY
Support should appear near 10680 to 10580 region. Below that buyers should appear near 10360 to 10320.
Resistance should appear near 10960 to 11010 and 11155 . Stay tuned for Flashes.
Traders can sell at 11137 and hold for lower prices.
JUNE SWISS FRANC
Resistance should appear near 10320 to 10360 and 10580 to 10680.
Support should appear near 10136 to 10104, below that a test of 10037 to 10021 is likely
JUNE BRITISH POUND
Support should appear near 14960 to 14840 failure there augurs for a test of 14590 to 14530. Resistance should appear near 15117 and the 15290 to 15350 region.
JUNE CANADIAN DOLLAR
Resistance should appear near 7939 to 7954 and the 8029 to 8044 region. Beyond that sellers should appear near 8119 to 8134.
Support should appear near 7777 to 7763 and 7689 to 7675. Below that buyers should appear near 7587 to 7560.
JUNE AUSSIE DOLLAR Resistance should appear near 7675 to 7689 and 7763 to 7777. Beyond that sellers should appear near 7836 to 7864.
Support should appear near 7601 to 7587, below that a test of 7513 to 7486 region is likely.
Stay tuned for Forex flashes and updates.
THE PRECIOUS METALS
APRIL GOLD
Resistance should appear near 1169.0 and 1180.5. Beyond that sellers should appear near
1192.0 to 1203.0 and cap a rally.
Support should appear near 1136.00 to 1130.00, below that a test of 1101.0 to 1096.0 is likely.
MAY COPPER Resistance should appear near 26120 to 26200 and the 26630 to 26720 region. Beyond that sellers should appear near 27160 to 27240.
Support should appear near 25190 to 25110 then 24690 to 24610 and the 23700 to 23540 region.
MAY SILVER
Support should appear near 1535.0 to 1529 and the 1496.0 to 1484.0 region.
Resistance is at 1609.0 to 1615.0 then 1642.0 to 1655.0 and the 1689.0 to 1696.0 region where sellers should appear and cap a rally.
THE EXCITING ENERGIES
APRIL CRUDE OIL
Support should appear near 4856 to 4845 and the 4514 to 4503 region. Below that a test of
the 4381 to 4370 region is likely.
Resistance should appear near 5056 to 5067 then 5129 to 5135 and 5200 to 5211.
MAY CRUDE OIL
Nearby support should appear near 5057 to 5056 and 4973 to 4995. Below that a test of 4926 to 4915 is likely.
Nearby resistance should appear near 5200 to 5211 then 5259 to 5282 and 5344 to 5356. Beyond that sellers should appear near 5418 to 5430.
APRIL BRENT CRUDE OIL
Support should appear near 5805 to 5792, a close under is negative and augurs for a test of 5577 to 5553 and eventually the 5356 to 5344 region.
Resistance should appear near 6023 to 6035 and 6119 to 6134. Beyond that sellers should appear near 6337 to 6350 and the 6417 to 6430 region.
APRIL HEATING OIL
Support should appear near 18220 to 18080 and 17380 to 17310
Resistance should appear 19020 to 1909 and the 19460 to 19530 region.
APRIL UNLEADED GAS
Resistance should appear 19020 to 19090 then 129460 to 19530 and 20340 to 20420 region.
Where sellers should appear and cap a rally.
Nearby support should appear near 18220 to 18080, below that a test of the 17800 to 17740 region
Is likely.
APRIL NATURAL GAS
Support should appear near 2.820 and 2.775 to 2.758. Below that a test of 2.672 to 2.663 is likely.
Resistance should appear near 2.974 to 2.883 then 3.039 to 3.045 and the 3.092 to 3.102 region.
Stay Tuned for Energy Flashes and Updates
THE GRANDE’ GRAINS
MAY SOYBEANS Support should appear near 964 ¼ to 962 ½. Below that a test of 934 ¾ to 931 ¾ is likely.
Failure there augurs for a test of the 915 ¾ to 914 region.
Resistance should appear near 1002 ¼ to 1003 ¾ then 1010 ½ to 1013 ¾ and 1032 to 1036.
JULY SOYBEANS
Support should appear near 964 ¼ to 962 ½. Below that a test of 934 ¾ to 931 ¾ is likely.
Resistance should appear near 1010 ½ to 1013 ¾ and the 1032 to 1036 region. Beyond that sellers should appear near 1047. Traders can sell at 1046 ¾, risk a close over 1069 for three days in a row.
MAY SOYOIL Support should appear near 3102 to 3092 and the 3045 to 3036 region.
Below that a test of 2990 to 2972 is likely Resistance should appear near 3194 to 3213 and the 3261 to 3270 region and cap a rally.
MAY SOYMEAL Resistance should appear near 342.5 to 344.3 and the 349.3 to 350.3 region. Support should appear near 327.0 to 326.1, below that a test of 321.3 to 319.4 is likely.
JULY CORN
Support should appear near 386 ¾ to 385 ¾ and the 374 ¼ to 373 ¼ region. Resistance should appear near 398 ¼ to 399 ¼ region. Beyond that sellers should appear near 411 to 412 and the 416 ¼ to 418 ¼ region cap a rally. Traders can sell at 414 ¾ and risk a close over 419 ¾ for three days in a row.
JULY WHEAT Support should appear near 478 ½ to 477 ½ and the 471 ¾ to 469 ½ region. Below that a test of 463 to 465 is likely
Resistance should appear near 491 ½ to 492 ¾ and 505 ¾ to 506 ¾. Beyond that sellers should appear near 525 ¾ to 528 ¾ Traders can sell at 512 ¾ and hold for lower prices
Stay tuned for Grain flashes and updates.
THE LIVELY LIVESTOCK
APRIL CATTLE
Support should appear near 15350 to 15290 . Failure there is negative and augurs for a test of
14960 to 14840 where buyers should appear and contain a decline.
Resistance should appear near 15680 to 15760 and the 16090 to 16150 region and cap a rally.
JUNE CATTLE Support should appear near 14590 to 14530 region, a close under is negative and augurs for a test of
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 14512 occurs. Trade accordingly
APRIL HOGS
Support should appear near 6592 to 6577 and the 6512 to 6482 region. Below that a test of the
6432 to 6417 region is likely.
Resistance should appear near 6812 to 6837 and the 6907 to 6922 region. Beyond that sellers should appear near 7072 to 7087 region.
JUNE HOGS
Support should appear near 7957 to 7932 and the 7777 to 7762 region. Below that buyers should appear near the 7602 to 7587 region.
Resistance should appear near 8300 to 8317 and the 8392 to 8407 region. Beyond that sellers should appear near 8482 to 8502 and cap a rally. Stay Tuned for Livestock Flashes.
THE SATISFYING SOFTS
MAY COFFEE
Resistance should appear near 14150 to 14210 and the 14530 to 14590 region. Beyond that sellers should appear near the 14840 to 14960 region.
Support should appear near 13460 to 13340 and the 12740 to 12680 region. Below that a test of 12380 to 12320 is likely.
MAY COCOA
Resistance should appear near 3036 to 3045 and the 3092 to 3102 region
Support should appear near the 2937 to 2928 region, a close under is negative and augurs for a test of 2883 to 2874. Below that a trade towards 2775 to 2758 is likely.
MAY SUGAR
Resistance is near 1346 then 1377 to 1383 and the 1415 to 1421 region. Traders can sell at 1414 and hold for lower prices. Support should appear near 1334 and the 1310 to 1304 region. A close under augurs for a test of the 1274 to 1268 region .
MAY COTTON
Support should appear near 6035 to 6023. Under that buyers should appear near 5957 to 5945
Resistance is at 6335 to 6350 then 6417 to 6430 and the 6577 to 6591 region. .Where sellers should appear and cap a rally.
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 March 07, 2015 7:00 PM South Florida Beach Time
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