FuturesCom Bi-Weekly Investment Outlook # 464 Saturday December 27, 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
“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. –
Saturday December 27, 2014
3:00 AM, South Florida Beach Time
Trading and volatility tend to pick up after the New-Year Holiday and into the first few months of the year. Traders should stay nimble and stay tuned for flashes and updates for all markets.
U.S Stock Indices are higher on the year. Interest rates are at or near zero, nothing has changed. Seasonally the stock market tends to firm up into year end and it has. Forex Markets; the euro long term downside targets remain well below the current trading ranges and levels. Traders should look to Sell Swiss Franc Futures (Buy USD/CHF) and Euro and be short as the year turns. The Swiss National Bank’s desire to cap the Swiss Franc strength may show itself into early next year. The 2012 and 2013 spring/summer lows are nearby and any real move past that could open up a door where the Swiss may go back to levels seen just prior to the financial mess in 2007. That said; traders should not expect help from the U.S Federal Reserve with rate moves anytime soon. However the SNB is unlikely to get brushed aside from doing what it has set out to do. Central banks tend to work things out over decades.
Cable downside support is 15350 to 15290 and really below that now at 14960 to 14840. Resistance is above the market at 16090 to 16150. Middle of the road selling should occur near 15690 to 15760. The USD/CAD (Canadian Dollar Futures targets are lower) longer term targets remain higher.
Dollar-Yen is trading higher on the year. On the downside support is at 11920 then 11805 and the 11690 to 11640 region. The nearby target on top is now 12320 to 12380 with higher tests down the road. Throughout the past decade and the previous one Japanese GDP has continued to disappoint policymakers, from one election to another and year after year. Sort of like a broken record. Dollar Yen typically rises into the end of the year. Traders should consider Yen a trading affair. Look to get long USD/JPY during a dip (Sell Yen futures on a rally) have longs (short futures) on into the New Year. The Aussie and Kiwi longer term downside targets are lower. Seasonally the Aussie typically can firm a bit and that is waning. Both the Kiwi and Aussie dollar are down on the year. Sell Rallies.
Please note; Analysis for overseas equity and foreign exchange markets are available upon request. For more detailed information or a country by county economic analysis for trading or hedging programs please call or email a request.
Precious Metals and Energy; Gold and Silver remain weak longer term, nothing has changed.
Gold bounced from a good low at the 1136.0 to 1130.0 region and frankly remains range bound and is now lower on the year. While gold typically firms into the end of the year, it has not. Copper remains weak and is below the lows of the past several years. Copper can typically firm up a bit, how much is the question we posed two weeks ago and apparently copper answered that question and decided to run back down. Let be simple here. Copper is a blithering mess. Silver is lower on the year. Nothing has changed. The metals have room on 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, bounced a bit and now are range bound. Heating Oil and Unleaded Gas and now Natural Gas have years of price on top of the market and remain weak. Weather is not favorable for extraordinary increased use and Natural Gas has left the region on top and is now probing long term prices not seen for a while and accelerating the move into the year end. Weather can change keep things nimble.
Grains are trading affairs. World ending soybean stocks are expected to increase to above record levels. Three years ago Brazilian exports were 30 million tonnes and could reach 45 to 50 million tonnes next year with a good crop. Transportation logistics to move the agricultural products has improved and decreased to cost to transport the soybeans. 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 speaking traders should look to buy beans sometime in the middle of February for a trade and preferably at lower prices than currently trading. Wheat set back from recent highs made during the recent Russian panic. Record world Wheat supplies are likely just over the horizon.
The all-time in Wheat was made during spring time several years back but generally speaking Wheat typically makes its highs of the season into early January. Weather in the U.S and more overseas geo-political issues will likely be in focus into early 2015. Corn is acting better and is higher on the month. Farmer selling should increase after the first of the year and many producers are happy to see Corn at 4.00 to 4.25. Live Cattle futures have stabilized. Higher beef prices and the tight Cattle supply can be supportive on declines. Cold weather may affect livestock movement and development this time of year, so that is something to watch for since winter is upon us. Earlier in the week the USDA released its Quarterly Pig-Crop report. The Hog and Pig report was considered slightly bearish across the board, there is expected to be more hogs available for slaughter into the spring of 2015. That news was pretty much in the market as seen by the decline prior to the report. There are some longer term issues with increased supply. Slaughter capacity to process the animals can be ‘tested’ and then problems arise as it did in 1998 or if freezer capacity is breached and supplies end up coming to the market rather quickly. These are things to think about down the road. For now, consider the livestock markets a trading affair, and stay tuned for livestock flashes and updates.
Coffee is lower on the month, yet higher on year and during bullish periods it typically does not take out the October low in December and it has. The strength of the Dollar has recently pressured coffee prices. Looking ahead a bit into next year, estimates of Coffee’s global supply/demand balance
for 2014/ 2015 are as wide as a football field. The guesstimates range from a deficit of 10 million bags to a surplus of 2.5 million. The average guess is for a deficit of around 3 million bags. Weather may also come into play in Coffee again. If an El-Nino event occurs during the first part of 2015 the Vietnamese coffee crop may see some dry weather. However the El-Nino story has been around for a while now and nothing has changed, but it is something to be aware of. Sugar is a trading affair, acts badly and is near contract lows. Soft global demand and weak energy continue to pressure sugar. Chinese sugar imports last month were less than expected.
Trends typically don’t change much in the last week of the year. Cotton continues to bounce around and is lower on the year. Cotton held some good support that is now below the prevailing price and has rallied on expectations for reduced US plantings and somewhat better demand. Overseas, India is trying to support prices domestically by purchasing cotton some producers and urging others to switch to other crops. Cocoa is up on the year. The 4th Quarter Cocoa grinding report will be released on January 15. West African growing weather remains favorable. Ivory Coast and Ghana are behind last season’s mid-December port arrivals. The possible impacts on Indonesian cocoa production if an
El Nino occurs (or not) is something to watch for in early 2015. The best demand growth regions for Cocoa will likely be areas of the world that have the best population growth and income growth.
That said; it’s also possible that the highs in Cocoa seen this year are it and it’s on its way back to under the price levels seen for most of this year. Something few expect. Traders should always expect the unexpected.
Stay tuned for flashes and updates for all markets. On to the Nitty Gritty.
THE SENSATIONAL STOCK AND BOND MARKET
DOW JONES INDUSTRIAL AVERAGE
Support is near 17,800.00 to 17,740.00 and the 17,380.00 to 17,310.00 region
Resistance is at 18,080.00 to 18,220.00 and 18,580.00 to 18,650.00
DOW JONES TRANSPORTS
Support should appear near 9,156.00 to 9,140.00 and 9,060.00 to 9,044.00.
Below that buyers should appear near 8,964.00 to 8,934.00
Resistance is at 9,316.00 to 9,347.00 and the 9,429.00 to 9,445.00 region.
MARCH E-MINI SP500
Resistance should appear near 2089.00 then 2108.00 and the 2126.00 to 2134.00 region.
Support should appear near 2080.00 and 2061.50. Below that support should appear near the 2042.00 to 2034.00 region.
NASDAQ COMPOSITE
Resistance should appear at 4845.00 to 4856.00 then 4915.00 to 4926.00 and the
4973.00 to 4995.00 region.
Support should appear near 4785.00 to 4775.00 and the 4717.00 to 4695.00 region.
MARCH E-MINI NASDAQ 100
Support should appear near 4304.00 and the 4249.00 to 4238.00 region. Below that buyers should appear near 4183.00 to 4163.00
Resistance is at 4370.00 to 4381.00 and the 4425.00 to 4446.00 region. Beyond that sellers should appear near 4503.00 to 4514.00.
MARCH E-MINI RUSSELL 2000
Resistance should appear near 1232.00 to 1238.00 and the 12687.00 to 1274.00 region.
Support should appear near 1203.00 to 1192.00 and 1169.00 to 1164.00.
MARCH 30 YR BONDS
Resistance should appear near 144-07. Beyond that sellers should appear near 145-11 and 145-21 Support should appear near 143-07 and 142-21. Below that 141-21 should hold for now. Below that a test of 14-07 and 139-21 is likely
MARCH 10 YR NOTE
Resistance should appear near 126-12 and 126-22. Beyond that sellers should appear near 127-21 and should cap a rally.
Support should appear near 125-22. Below that a test of 125-07 and 124-22 is likely. Failure there augurs for a test of 123-22.
THE FRENZIED FOREX FRONT
MARCH DOLLAR INDEX
Resistance should appear near 9044 to 9060. An extended trade over is friendly and augurs for a test of 9100 and eventually the 9140 to 9156 region.
Support should appear near 8964 to 8934 and the 8871 to 8856 region. Where buyers should step in and contain a decline.
MARCH JAPANESE YEN
Resistance should appear near 8391 to 8406 and the 8484 to 8499. Traders can sell at 8481 and hold for lower prices. Risk a close over 8507 for three days in a row.
Support should appear near 8300 and the 8223 to 8194 region, under that a trade towards 8044 to 8029 is likely to occur.
MARCH EURO CURRENCY
Support should appear near 12175 and the 12030 to 11920 region. Below that a test of 11690 to 11640 is likely.
Resistance should appear near 12247 and the 12320 to 12380 region. Beyond that sellers should appear near 12442 and 12530. Stay tuned for Flashes
MARCH SWISS FRANC
Resistance should appear near 10183 then 10227 and the 10320 to 10360 region.
Traders can sell at 10227 and hold for lower prices.
Support should appear near 10136 to 10104, below that a test of 10037 to 10021 and the 9937 to 9921
region is likely. Trade Accordingly
MARCH BRITISH POUND
Support should appear near 15350 to 15290 and 14960 to 14840
Resistance should appear near 15690 to 15760 then 15922 and 16090 to 16150.
MARCH CANADIAN DOLLAR
Resistance should appear near 8668 to 8683 and the 8756 to 8777 region.
Traders can sell at 8661 and risk a close over 8687 for three days in a row.
Support should appear near 8560, below that a test of 8499 to 8484 is likely.
MARCH AUSSIE DOLLAR
Support should appear near 8044 to 8029 and the 7954 to 7939 region. Below that a test of 7777 to 7763 is likely.
Resistance should appear near 8194 to 8223 then 8300 to 8314 and 8391 to 8406.
Traders can sell at 8257 and risk a close over 8321 for three days in a row.
THE PRECIOUS METALS
FEBRUARY GOLD
Resistance should appear near 1203.00 then 1232.0 to 1238.0 and the 1268 to 1274 region.
Support should appear near 1180.50 and the 1169.00 to 1164.0 region. Below that a test of
1136.00 to 1130 is likely.
MARCH COPPER
Resistance should appear near 28200 to 28290 and the 28740 to 28830 region. Beyond that sellers should appear near 29280 to 29370.
Support should appear near 27750 to 27580, below that as test of the 26720 to 26630 region is likely
MARCH SILVER
Support should appear near 1576 to 1569 and the 1535 to 1529 region. Below that a test of 1496 to 1484 is likely.
Resistance is at 1642 to 1655 and the 1689 to 1696 region. Beyond that sellers should appear near 1731 to 1738.
THE EXCITING ENERGIES
FEBRUARY CRUDE OIL
Support should appear near 5356 to 5344 region. Below that a test of 5067 to 5056 is likely.
Resistance should appear near 5855 to 5880 then 5945 to 5957 and the 6165 to 6190 region.
FEBRUARY BRENT CRUDE OIL
Support should appear near 5880 to 5855 and the 5729 to 5716 region. Below that a test of 5577 to 5553 is likely.
Resistance should appear near 6023 to 6035 and 6257 to 6270 region. Beyond that sellers should appear near 66337 to 6350 and cap a rally.
FEBRUARY HEATING OIL
Support should appear near the 8650 to 18580 region. Below that a test of 18220 to 18080 is likely.
Resistance should appear 19829 to 19960 and 20340 to 20420.
FEBRUARY UNLEADED GAS
Support should appear 14960 to 14840 and 14590 to 14530.
Below that a test of 13830 to 13770 is likely
Resistance should appear near 15290 to 15350 and the 15690 to 15760 region. Beyond that sellers should appear near 16090 to 16150 and cap a rally.
FEBRUARY NATURAL GAS
Support should appear near 29900 to 2970 and the 29370 to 29280 region. Below that a test of
28830 to 28740 and the 28290 to 28200 region is likely.
Resistance should appear near 30920 to 31020 and the 31940 to 32130 region.
Stay Tuned for Energy Flashes
THE GRANDE’ GRAINS
MARCH SOYBEANS
Support should appear near 1013 ¾ to 1010 ½ and 973 ¾ to 970 ¾.. Below that a test of 934 3/4 to 931 ¾ is likely.
Resistance should appear near the 1058 to 1068 region. Beyond that sellers should appear near 1096 to 1101 and cap a rally.
MARCH SOYOIL
Support should appear near 3213 to 3194 and 3157 to 3148. Below that a test of 3045 to 3036 is likely.
Resistance should appear near the 3377 to 3386 region. Beyond that sellers should appear near 3425 to 3443 and cap a rally.
MARCH SOYMEAL
Resistance should appear near the 368.3 to 369.3 region. Beyond that sellers should appear near 379.5 to 380.6 and 385.8 to 386.7 should cap a rally
Support should appear near 356.3 to 355.3, below that a test of 350.3 to 349.3 is likely. Under that buyers should appear near 338.6 to 337.3
MARCH CORN
Support should appear near 399 ¼ to 398 ¼ and the 386 ¾ to 385 ¾. Below that buyers should appear near 368 ¼ to 366 ¼ and contain a decline.
Resistance should appear near 416 ¼ to 418 ¼ and the 423 ¾ to 424 ¾ region. Beyond that sellers should appear near 442 ½ to 444 ¾
MARCH WHEAT
Support should appear near 588 to 585 ½ and 572 ¾ to 571 ¾. Below that a test of 557 ¾ to 555 ¼ and 550 ¼ to 549 ¾ is likely.
Resistance should appear near 616 ½ to 619 and the 633 ¾ to 635 region. Beyond that sellers should appear near 641 ¾ to 643 and cap a rally.
THE LIVELY LIVESTOCK
FEBRUARY CATTLE
Support should appear near 16150 to 16090 and the 15760 to 15690 region.
Resistance should appear near 16417 to 16552 and the 16890 to 16960 region.
APRIL CATTLE
Support should appear near 16090 and 15760 to 15690. Below that a test of 15350 to 15290 is likely to occur.
Resistance should appear near 16227 and 16417 to 16557. Beyond that sellers should appear near the 16890 to 16960 region.
FEBRUARY HOGS
Support should appear near 8137 to 8117 and the 8047 to 8027 region. Below that a test of 7957 to 7937 is likely
Resistance should appear near 8192 to 8222 and the 8297 to 8317 region. Beyond that sellers should appear near 8392 to 8407 and cap a rally.
APRIL HOGS
Support should appear near 8407 to 8392 and the 8317 to 8292 region. Below that a test of 8222 to 8192 is likely.
Resistance should appear near 8557 to 8592 and the 8667 to 8682 region. Beyond that sellers should appear near 8762 to 8777 and cap a rally
JUNE HOGS
Support should appear near 9062 to 9042 and the 8967 to 8932 region. Below that a test of 8872 to 8857 is likely and should hold. Under that buyers should appear near 8682 to 8667.
Resistance should appear near the 9137 to 9157 and the 9312 to 9347 region. Beyond that sellers should appear near 9427 to 9447 and 9527 to 9542
Stay Tuned for Livestock Flashes.
THE SATISFYING SOFTS
MARCH COFFEE
Resistance should appear near 17310 to 17380 and 17740 to 17800. Beyond that sellers should appear near 18080 to 18220 then 18580 to 18650 and cap a rally.
Support should appear near 16550 to 16420 and should find some buyers. Failure there is negative and augurs for a test of 16150 to 16090 and the 15760 to 15690 region.
Stay tuned for Flashes
MARCH COCOA
Resistance should appear near 2972 to 2990 and the 3036 to 3045 region. Beyond that sellers should appear near 3092 to 3102.
Support should appear near 2883 to 2874 and the 2775 to 2758 region. Below that a test of 2724 to 2716 is likely Trade Accordingly
MARCH SUGAR
Resistance is near 1529 to 1535 and the 1569 to 1575 region.
Support should appear near 1459 to 1453 and the 1421 to 1415 region. Below that buyers should appear near 1383 to 1377.
MARCH COTTON
Support should appear near 6035 to 6023 and the 5880 to 5855 region.
Resistance is at 6165 to 6190 then 6257 to 6270 and the 6335 to 6350 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
Saturday December 27th, 2014 3:45 PM South Florida Beach Time
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