The Weekly Call provides perspective on high-quality setups and trading strategies. My current performance shows a 405% return since October 2016. The purpose of this blog is to demonstrate how to swing trade futures using our methodology to select high-quality setups and manage the trade with our risk management approach.
This past week I have exited my sugar position. Based on the Commodity Newsletter posted HERE, I am looking at both technical and fundamental reasons to be long. Hunting an entry this week. My entry will be posted on the private twitter feed for subscribers. 88% profit on margin on Sugar. My hit rate this year so far is 9 wins/ 2 losses. Looking this week to enter Corn long and adjust Live Cattle and Soybeans.
As discussed last week, we have seen the record short position by funds in grains get hammered by a short squeeze. Some of this is due to wet weather that threatens Wheat, Corn and Soybean yields. As discussed last week, there are major implications across the globe if we see a trade war and another 25% tariff increase. First expect CNY to be very bearish, we will have risk of a global recession and downside risk to most economies. Chinese markets would be bearish and would likely test the 2015 lows. In the US, cyclicals would be bearish and small caps should see a bear market in this environment. Expect volatility to continue and any trade resolution will see a massive relief rally.
Still long Live Cattle, Soybeans and now short Natural Gas. More information on those entries can be found below and on our Private Twitter Feed. My track record is posted below under Completed Trades. See some of my completed trade videos below.
The trades below are discussed on the Daily Update: – Click Here for a FREE Trial
9-2 – The 11.68 level did not convert and we have seen a lower low at the monthly S1. At this point, we have a candidate low that may be in. Looking for the first three up into 10.89, then the retest. If the retest holds 10.30 then likely the turn is in. If we convert 10:30, then we open 9.68 as a potential lower low. My plan is to exit 2/3s of my current position early this week and wait on the retest to add size.
9-9 – Flag is now complete and I have already exited 2/3 of this position, looking for a retest and support at 10.30-10.40. If support becomes manifest, I plan to add size at this level; if not, we see a new low.
9-16 – Waiting on the retest to complete, exited the last 1/3 a little early in this trade, waiting to reload lower. Expecting the trend line to break and the monthly pivot to be tested.
9-23 – Still waiting as the three back is not quite done. Expecting a lower low, which gets me long again in the 10.20 area. I am currently flat Sugar.
9-30 – Worth waiting on the low. Likely we are either turning here or we see a minor new low. Either way, I plan to re-enter this week long. Waiting on the setup.
10-7 – Wave 5 has played out, reversal likely and a retrace into 10-15 cycle. Support 50 back is a clear buy for the next long cycle into November and 13.50ish.
10-14 – We have an A – B and now expecting a 5-wave decline into the 12.40 area next. Reversal pattern and I am long again on Sugar.
10-21 – Sugar has topped here, looking for the retest into 10/28 for a possible long into the next window higher 11/24. Retrace target is 12.82.
10-28 – Sugar retracement in progress, turned as expected, three back can be shallow to 13.56 and if converted can see 12.50. Next rally expected into 11/24..
11-4 – First target achieved, and we have made the 200% fib. Looking for a reversal pattern here and a hold of the current low. 12.50 is still possible here. Expecting a decision early this week. Next high window 11-24 and 14.50.
11-11 – Sugar is below the monthly pivot and heading for the 100% fib at 12.38. Support seen here, expecting a turn and a march higher into the end of November. Bigger picture I have higher highs through August of 2019.
11-18 – Sugar may be turning here and may not make the 12.38 target as stated last week. The trend line is broken and on a conversion of the monthly pivot (the blue line), we likely see continuation to the upside. Next target is 14.50.
11-24 – Sugar in the area for a turn. Made the full target to 12.38 and needs to convert the trend line to open the upside. The lean is higher and any conversion of the Monthly pivot (the blue line) and we see the next upside move.
11-30 – Nice reversal in Sugar as discussed. Break of the trend line and a back test should yield higher prices into the next cycle window which is 12-10. Convert monthly pivot confirms the uptrend.
12-9 – Upside expected to continue this week and into the next cycle date and $14. Key to the rally is the monthly pivot converting this week. I have larger cycles carrying sugar higher until August of 2019.
12-16 – While the retest looks complete, monthly pivot has not converted, we likely will see it convert this week and then move into the next cycle window higher. Nice entry here with low risk, stop below previous low.
12-23 – Sugar broke a key trend line and did not convert the monthly pivot. This will likely see a lower low and a lager three down to 11.50 or so. I am waiting for the next long set up.
12-30 – Not much progress this week. Still waiting on the lower low for the larger three down. Should make more progress this week into the $11.50 area. The declining resistance trend line must hold.
1-6 – Sugar has played catch up and is close to target. Small wave 4 printing now and lower expected into 11.50 to finish the pattern. I will be looking for a reversal toward the end of this week and a potential long.
1-13 – Sugar reversed and broke the declining resistance trend line. Expecting monthly pivot support and higher prices into March and 14.50 next. Needs a retest of the broken trend line first.
1-20 – Sugar almost testing monthly pivot, expecting a legg higher into 14.50 by March. this week I may have an entry long. Will be posting this on our private Twitter feed when seen.
1-27 – Sugar is now testing monthly pivot as expected. Looking for a setup long here. Would advise as a trading strategy buying a put to cover the downside against a long future as we should see more volatility in the coming weeks.
2-3 – Lean is higher and we have a nice compression pattern, looking for the rally to start this week. Break the declining resistance trend line and we have lift off. Target is $14.00 -14.50.
2-10 – Lean is still higher and target expected is $14.00 into March 24th. We are currently testing support and likely we see the rising support trend line hold this week. Any break and conversion of the support trend line invalidates the long.
2-17 – Nice break of the trend line late last week, $14.00 is now open into March. Retest expected Tuesday and higher prices.
2-24 – So far so good on Sugar. Lean is higher into $14.00. May see a bit more of a pull back, continuation higher expected into my cycle date.
3-3 – Testing trend line support, if monthly pivot is resistance this week we can break lower to the monthly S1. If seen the lean is still higher into $14.00. If we convert the monthly pivot into support, we open $14.00 directly. The lean is still higher.
3-10 – We did break lower into the S1 support and it is being tested now. No positive D yet but expecting to see it this week and a reversal. I still like Sugar long here into the April cycle date and $13.50-$14.00
3-17 – A flaggy structure likely will retest the low which is where I plan to enter into a long and plan to hold into the April high window. Expecting the retest this week and the impulse higher. The retest and lower low would set up positive D.
3-24 – A great setup for a long here, mind your stop below the recent low. COT data is supportive and I like it long into April and $14.00. My entry will use futures with a simple stop.
3-31 – So far so good on the long. Be aware of the cycle date in early April and the possibility that we see a short target of 13.12. If we convert we can still see $14.00 but we are running out of time and the price action has not been impulsive.
4-7 and 4-14 – No change in forecast, still expecting 13.12 and looking for a C wave lower into the next cycle window. We are out of time and I am looking for a reversal pattern to play out lower. I am currently short 1/2 of a position from 12.82 that I initiated last week.
4-21 – We had a pop in Sugar last week and I am still holding a 1/2 size position short. The move appears to be a retest and I am still expecting a wave C lower into the 11.50 area into the May 11th window. Any break above the monthly R1 will be considered invalidation and I will be looking for an exit.
4-28 – No change in forecast from last week, I am still waiting on the lower trend line break to open lower prices and to add size. This compression should expand lower, watch $13.00 as resistance and possible wave E of a triangle prior to the break down. I am risking only 50 ticks here and managing risk through size.
5-5 – The break lower has occurred as expected and I have legged out of 2/3s of my trade. I am holding the last 1/3 into target and my protective stop is at my entry. The cycle low is coming in May and I will be looking for a long position using in the money 70 delta calls on Sugar when the timing is right.
5-10 – See my latest Commodity Advisory Newsletter with a special focus on Sugar HERE. The lean is sugar is lower until we see a lower low and positive D. I will be exiting my trailer at that time and looking for a long setup. The global supply dynamic of sugar are changing, looking for a bullish shift. Cycle date is this week so I am looking for possible reversal pattern.
5-19 – Sugar made a new low into our timing cycle window and I exited my trailer position. 88% profit on margin employed and a nice trade started on 4/9/2019. I am now looking for a reversal pattern and plan to get long. This is a longer term trade and I will be looking into the October contract for my entry. I will be posting the entry on our private twitter feed when the setup presents itself.
9-2 – The retest completed higher than expected and may be turning over here. Likely a flat has formed here and 2.93 is resistance and am expecting 2.76 next. This week, we need to convert back below 2.90 to see continuation lower. I am still holding a short trailer with my stop at even.
9-9 – We have hit first target at 2.76 and now we should see a small retest. 2.82 or 2.86 resistance and lower prices expected into 2.62 likely. Stop still at even and still holding 1/3 in size. Will add size on retest when resistance is seen.
9-16 – So far so good on the decline; we have at least a week left. Only a trailer left on the position and still holding for now. Looking for an exit likely next week. Minimum target $2.70.
9-23 – A busy week for NG. I enter NG short earlier in the week, adding to my existing 1/3 short position. Just before the EIA news announcement, I decided to take a small profit on my new position and placed my stop at even. Price broke higher into a flat and I have been stopped out of my add and my trailer of my original position. Always a good practice to go even stop before EIA. I have re-entered short again at 2.978 and am expecting lower prices into at least monthly pivot.
9-30 – Stopped out of NG at 3.020 and standing aside. I am re-evaluating the trend here and the October contract is usually a seasonal low. I am now looking for a run higher into 3.30 or so. Waiting on a retest here into 2.90 – 82, a three back if seen should set up for a long. Looking for this setup this week.
10-7 – Nice setup for a short on NG and looking to get long after this retracement finishes. The trend is clearly higher into November and I am a buyer of support. Two levels to watch 3.10 and 3.02. Waiting on positive D setup and the three back to finish.
10-14 – Short playing out nicely, broken trend line and expecting 3.055 as support this week. Likely the next legg up starts later this week into 3.45 next.
10-21 – Natural Gas is still in a retracement into 3.125 and I am waiting on the next long. By 11/17, I am expecting 3.45-3.50ish. We could be forming a triangle here so Monday see the top of the range, this would be wave D.
10-28 – Retracement may be finished. 3.12 retracement target was achieved. Now looking for a small right shoulder and higher into 3.45 target in the mid/late November time frame.
11-4 – Break out to the upside in process, expecting 3.50 next and then a strong reversal lower. Weekly pivot should hold as support.
11-11 – Through our target at 3.65 and an overthrow of the channel. Retest in the next 4-5 trading days into 3.50 and higher expected into 3.90. Natural gas prices being driven by El Nino weather pattern expecting colder than usual winter. Stocks are not bullish, so this will end badly when the time comes. For now, lean long.
11-18 – A volatile week as a hedge fund went under and capitulated pushing NG into the $5 area. While this volatility is not sustainable with implied vol over 100%, likely the high will be re-tested in December. Looking for a pullback in three waves into the 2nd std dev BB in the 3.60-3.80 area next. Day trade only with small size and mind your risk.
11-25 – A triangle may be forming and equally there is a chance that this can be a flat. My lean is lower to 3.85 so vol can relax a little then the next legg up for December. Any break and conversion of 4.60 and we open 5.20-40 directly. The lean lower needs to plan out with a break of the triangle support trend line on Monday.
12-2 – Natural is in a triangle here and forming wave E into $4.40. Likely we see a press higher into the 5.20-40 area and then a strong reversal. This is a continuation structure so we have a 70% chance of seeing higher prices. Invalidation is below the triangle support trend line.
12-9 – The wave E of the triangle may be in. Expecting upside continuation and a break of the upper trend line to confirm the move to 5.20 next. Triangles have so much time to complete; if we linger here this week without the upside breakout, this will increase the odds of a move lower to 3.80. Bulls need to perform this week.
12-16 – As discussed, the time it takes and number of swings for a triangle to play out is limited, take too long or too many swings and your count is likely wrong. Good example of that here as the triangle broke the support trend line and has made the alternate target. Next step is lower to 3.60 to set up the reversal and positive D on RSI.
12-23 – Target made on NG and next stop is 4.10-20 and likely monthly pivot. NG had an inverted crash and is about to decide if the move to 4.10 or so is just a retest of the triangle or something more. Convert 4.20 and we open 5.20 as a price target. If resistance, then we see NG return to $3.00
12-30 – The falling resistance trend line has been resistance and we now have a hard reversal. I am on the wrong side of this trade. Likely we will see a lower low into $3.15 or so before seeing higher prices. I am still expecting the $4.10 window but now in the next cycle window of 2-2.
1-6 – The low is likely in on NG, a break of the red declining resistance trend line will confirm the next move to the upside. 3.40 is the next target area which is expected before the 2-2 cycle date. We also have the March shoulder season in Natural so higher can still be seen into $4.00.
1-13 Rally in progress and expecting 3.40ish next and monthly pivot. A decision there is expected, convert and we open $4.00 next into early February.
1-20 Rally is retesting the gap and I think we may be finished. Lean is still higher as long as 3.40 is support. Looking for 3.90 area next.
1.27 – Lean is still long and we have tested 3.20 in the front month as resistance, likely we see a retest of 3.00 and then the next leg higher. Coldest weather of the winter is this week in the Midwest. Expecting the largest draw of the year on NG stocks. A deal with China will cause more NG exports so expecting higher prices. Expiration is Monday so expect volatility but lean is still higher into 3.40 next, then 3.80-90 into March. I started a long last Friday in the May contract 2.828 with bracket on the trade using options – a long put at 2.70 for protection to the downside and a short call to help finance the put at 3.10. Will be exiting when the May contract sees target at 3.10. Avoiding the high volatility in the front month for now.
2-3 – Still long NG and we have a move lower which was not expected. Cycles all point higher and I am expecting a reversal this week. The long put at 2.70 was a good idea and is helping to hedge the loss on the long future. I am a hold until I am underwater $1500/lot then I will pull the plug. For now I am being patient this week. Target to the downside is $2.65.
2-10 – News from Venezuela not helping and even with the news we now have a possible reversal brewing. I think NG is over done to the downside. Any break and conversion of the weekly pivot will break the declining resistance trend line and we open higher prices into the monthly pivot next. The next high window is 3/2. I am still long NG as stated above, looking to cover the short call and take a small profit this week on the turn and hold the put and the long future for now.
2-17 – Nice bounce off the lows, my lean is still long. I took profit last week on my short calls as I was expecting a turn and am currently holding just the puts and futures. I have adjusted the position this morning (Monday) with an additional 270 put as we have broken the support trend line and may retest the low or 2.585 . My delta on the trade now is zero. I plan to take profits on the puts on a confirmation of the turn which I hope to see later this week.
2-24 – Lean is still higher into the double top target at 2.97. I have covered by puts and I am holding futures long at this point. Weekly pivot is support and I am expecting upside into target by the first week in March.
3-3 – We now have a swing high and negative D on RSI. We can turn at any time for a retest of the low. That window occurs around 3-18 and can be a lower low. Looking for continuation higher into 2.96, get lighter and carry a trailer. I have reduced size Friday and am now trailer size.
3-10 – I closed my trailer a little late on NG, but I gave it every chance to make target which it is likely not happening. The red trend line was broken last week and retested so now looking for lower prices this week into the 3-18 window. 2.727 the first target.
3-17 – Pivot on gap last week in Natural and lower prices expected. 2.727 first target then if we convert, we open as deep as 2.50. Not much time remaining so will be looking for a reversal pattern and a setup long toward the end of this week.
3-24 – Natural may see a turn later this week as we are running out of time for the low. I still like 2.727 and also a full retest of the low at 2.60. I will be hunting the setup for the next long.
3-31 – On NG we have made the target area in the 2.65-60 area and I am expecting a reversal after we see a lower low. No Positive D here yet, but likely we see it this week and I am looking for the next swing high in the mid April time frame in the $3.00 area.
4-7 – NG made target and set up the positive D as discussed last week on the lower low. We have just broken the declining resistance trend line and I am expecting a small retest and higher into $3.00.
4-14 – NG retest and an IHS setup, lean is still higher and I have started a 1/2 size position long in the October contract. Stop is below the current low. Still expecting higher highs into May.
4-21 – Full double bottom here and also at long term support at 2.50. I have added my other 1/2 size position so my average is now 2.743 and I have also added the Oct 19 long put at 2.60 and short call at 2.80 to help finance the put. I will be legging in and out of the short calls as needed. My lean is long into the May 27th high window.
4-28 – Nice break up on NG, and I am expecting a retest of the broken trend line this week. That seen, I am expecting higher prices. I have legged out of the short calls so am holding the put and am holding the long futures. For now until a confirmation I plan to hold this position, then I may remove the puts or just carry them higher and accept the cost of protection into expiry.
5-5 – So far so good on the move on Natural. The chart shows resistance at monthly pivot and a three back retest. I am expecting this to hold as support and expecting the monthly pivot to convert next week. I am still long futures and holding puts. I may chance the position structure after the monthly pivot converts. I will be posting this position on the private twitter feed.
5-12 – NG now finishing the last legg higher into 2.66. Looking to take profits when seen and expecting a retest of weekly pivot. We can still see the lower trend line but it must hold as support. Lean is still higher into the June cycle date.
5-19 – NG could be finishing a B wave here and I am looking for a lower low to the trend line. I exited all my futures last week on the highs and am holding just puts here and plan to exit at the trend line and re-initiate a long position from there.
9-2 – Coffee is in the turning process for a seasonal low. I am expecting a rally into 108 then the retest of the low. There is risk here to $98. I am currently carrying just a trailer size position and waiting for the rally into 108.
9-9 – Coffee is still turning and I am still holding 1/3 of a position. Likely a lower low is coming and I plan to add size at that time. Holding the 1/3 in case of an early turn. Target expected is $97.
9-18 – Coffee is still working on a lower low. Took profits this week on the last 1/3 and I currently have no position. I am looking to get long at around $97. Lower low sets up positive D on RSI. Waiting patiently.
9-23 – I got long coffee this week at 95.57 and am off 2/3 of the trade. Originally looking for 101, we may see as high as 105s. Waiting on my last 1/3 with stop even and looking to add size on a pullback into 98. A break of the declining resistance trend line is a positive sign, a retest that holds the trend line as support confirm the turn. Also news of farmers in Brazil lobbying the government about their inability to farm with prices at these levels. Watch the news for more. A government tailwind here would be welcomed!
9-30 – I legged out of 2/3 of the trade and now am holding a trailer. We are at first target at 103.50 which is the 100% fib for the three up. Likely we see a retest lower into monthly pivot and then higher. If we fail at monthly pivot and penetrate $99, we open $92 next and a lower low. Holding 1/3 in case we see higher into 105s, and plan to add size on the back test.
10-7 – I closed out my trailer in the 110s which is the end of the third wave. Happy with the profits and a 116% return on margin. A nice trade. I am looking to reload on the pullback which can get as low as 103. First, we finish the move higher into 111s then the pullback. I am a buyer when seen.
10-14 – Looking for the next purchase on Coffee, looking lower into 105-106. 5th wave finished, we are looking for an expanded flat lower into that area. I’m a buyer when seen.
10-21 – The Coffee freight train has topped and a retest is expected this week into one of two targets – 114s or 110s. Implied vol is high here so still expecting big moves. Looking to enter long on the next reversal pattern lower.
10-28 – Three back expected into 114-115 and then another legg higher into 135 by 12-12. Coffee is very volatile her so wait for a confirmed turn for the next long. We can see 109s as an alternate.
11-4 – Coffee made out target and now is finding resistance at the declining resistance trend line. 50/50 chance here that we reverse hard and make 109s OR we convert the trend line and head straight to 135s. My lean is lower to complete a three down into 109s this week then higher to 135s.
11-11 – No change in forecast; a triangle is forming here, resolution is lower to 109s. Bigger picture, the lean is long and I am still expecting 135s. The support test needs to complete first so waiting for the long setup here.
11-18 – Still waiting on the 109s, no change in forecast here. Still looking for a long into 135s. A quality setup is required on Coffee to get me interested. Likely entry is next week.
11-25 – The move lower playing out as expected. Next stop is 109s and positive D for a long setup. Should see it this week. Waiting for a reversal pattern to enter.
12-2 – Patience pays when trading futures. I have been very patient on this decline and now coffee is setting up in the buying area as described. I want to see a short-term reversal pattern, then it is time to buy. I still like the rally into January.
12-9 – No clear reversal pattern yet; still waiting to see a clear pattern to buy. Key to the next rally is a conversion of 110; once seen this confirms the move to the upside into $130s.
12-16 – I have entered long as of last Friday with a clear reversal pattern, looking for the monthly S1 to be support. Next step is a rally into 110 and a conversion. If seen I will confirm the turn. If we fail, likely we see another legg lower into 100.
12-23 – We have now seen the retest of the low and have seen 100, find support here this week and we confirm the turn on a break of 103. I have taken 1/3 in profit near the top of the three up and waiting on the last 2/3s to see how this retest resolves. Should get my answer this week.
12-30 – The retest may be complete as the initial impulse off the bottom has made a retest into the 100 area. I am expecting 100 to hold and looking to hold my current 2/3s of a position into the next cycle window of 1-10. Any break of 100 invalidates this trade and I will exit with the profit on the first 1/3.
1-6 – Coffee broke lower and I took my stop on the trade. The sideways formation is a sign of indecision and I am looking for my next entry. No decent setup here so I am waiting on a quality setup lower. We likely will see a day or two of downside this week. If seen, I am a buyer when a reversal pattern sets up.
1-13 – Coffee broke the consolidation pattern higher and may be demonstrating support here. My next entry is in the 101.20 area if support is demonstrated. Still expecting a legg higher into 115 next if support holds. Turns are sometimes sloppy, so breaking up the consolidation pattern, then retesting it is a bullish sign.
1-20 – Coffee retest is likely finished, and we are now testing the weekly/monthly pivot combo as support. If found, this confirms support and the rally into 115 as planned. This can still be a flag so the upper trend line breaking up would be a bullish confirmation.
1.27 – Coffee has started the rally into 115 as discussed, key level now is 108s – we convert, the the breakout to 115s is on. We still have a flag and we still have risk to the downside. With dry weather in Brazil and lower than expected crop forecasts, the lean is higher.
2-3 – Looking for a breakout above 108s this week, we are set up for it with a small triangle. Break above and we see 115s then retest the triangle then higher prices.
2-10 – Currency risk has taken coffee lower and we are testing support. Convert 101 and we open new lows. Lean is still long at this point and I have begun a long this week. Long May Coffee using futures with a long May 105 Put and a Short May 115 call for each futures contract. I plan to take profit at the first objective at $115. With last years crop harvest at record highs, the same is not expected this year. Expecting the long to play out if 101 holds as support.
2-17 – Coffee is setting up for a turn, I am still long and like Natural Gas I plan to cover my short calls on a turn and hold the puts and futures. Likely we see a lower low which would finish this pattern and still expecting a move higher into March.
2-24 – The lower low referenced above has been seen. Looking now for an impulse. We currently have a higher low and the bulls need to show up on Monday. The low here needs to hold. I have covered by short calls for a small profit, still holding the puts and futures and am underwater.
3-3 – Coffee has broken the declining resistance trend line and I am expecting a retest of the low from what appears to be a flaggy formation. Once the low is retested I am expecting higher prices into the end of March. A conversion of monthly pivot at 101.60 opens higher prices.
3-10 – Looks like a possible bull flag and still looking for the turn here. The low has been retested so if we convert weekly pivot we have the 110 area open into the end of March. I am still holding my long futures and puts which are well under water with only 33 days remaining. I will cover my puts for a profit when I see a confirmation of a turn which is when I see monthly pivot convert into support.
3-17 – A quiet market is typically what you see on during reversal. I am expecting the setup here to resolve higher directly. Convert 101 and we have a confirmation to the upside. If seen I will be looking for 110 by month’s end.
3-24 – Another beautiful setup. I am already long and running out of time on my position. I will likely be adding to my position Monday as I currently have a fixed loss due to the puts I used in the original position. I like the turn this week and higher prices.
3-31 – I have not added size as we have yet to break the trend line and I am waiting on a confirmation on the turn. Likely we see it this week, so I may be adding futures to my current position to help reduce my current loss. My loss at this point is fixed so I am in no hurry to add risk until we confirm.
4-7 – I am carrying a loss on KC and my loss is fixed as a result of the futures and puts I am holding. I have a small profit by taking off the short calls but am still underwater. I see a setup here with an IHS and I am looking to add calls this week for a move higher. I will be leaving my current position intact. Hopefully Coffee breaks higher and I avoid the loss.
4-14 – KC – expiration they pinned it lower, looking for a reversal here at 92. I am out of my puts for a profit and and holding my futures for a $3.00 move higher. If seen I exit, if we break 92 I’m out with a loss.
4-21 – Last week I exited my puts as the advance we saw was a flag. I clawed back a few ticks but I still took a loss on this trade, the first one this year and this ends my six winners in a row streak. The flag has broken down and coffee is oversold. The Brazilian government is now subsidizing farmers to prevent them from changing crops. Funds are way way short and this is fuel for a short covering rally which I am expecting this week. Break 94.24 and we should see a squeeze.
4-28 – I have been speaking about the squeeze in Coffee and how this could play out from the low. Well, this is not playing out, the C wave here is weak and 97 is still a target but a break lower is likely as this appears to be a flag. On a lower low, I am a buyer as the daily chart shows timing cycles ALL pointing higher. I am patiently waiting for a setup lower.
5-5 – Possible reversal here in Coffee this week as we are into the cycle low date and we have not yet made a lower low. I am choosing to wait for some proof as the buying has been anemic and funds are still way short. I am expecting a squeeze higher but as of now, looking for a lower low and increased positive divergence. The declining resistance trend line need to convert to get me interested. Don’t let fear of missing out get you in early on this one, I am waiting for a super setup before putting more risk out into this market.
5-12 – We have a possible reversal here and a nice COT setup on the Daily Chart. I need to see some follow though above 92 for an entry. Convert 92, we open 97. If we then convert Monthly, we will have a reversal and higher prices expected. Coffee prices are extremely oversold.
5-19 – Coffee failed to prove anything last week as 92s were not converted and as discussed on The Daily Update, lower prices have played out. A lower low here is another possible setup, I will be very patient and selective on the next trade.
9-2 – A support test is in progress now. The low may be in and we are now three down to the 100% fib. Friday showed us a 5% rally off the low. If we see the low hold from Thursday and see continuation higher, the turn in Lean Hogs in confirmed. Higher prices expected into the October window.
9-9 – Lean Hogs may have found support and likely we see a conversion of the red line – the monthly R1 and if seen the turn is confirmed. Looking for a rally into next window in mid-October. I have no position at this time.
9-16 – Lean hogs now confirmed to the upside into the cycle date in October, the next retest is a chance to reload. Price is 50% back the previous swing to you should be out at least 1/3 of your trade and stop even at this point.
9-23 – Lean Hogs near target and is early timing wise. Time and price usually come together in my work so this early is a sign that my price target is low. We may see $62 and the trend line by the cycle date.
9-30 – Likely we see the move higher into $62 and negative D on RSI to set up the retest this week. 50% back expected then higher into the next cycle date into $75.
10-7 – We have hit target which is the 100% fib and we still have time remaining on this cycle. Leave on a trailer here as we may see a higher high this week. Looking for a pullback 50% back and then next leg up into 75s on Hogs. I will be a buyer on the retracement.
10-14 – Reversal here is in progress now and expecting 52.275 as support. The monthly S1 likely to be the right shoulder of an IHS. Expecting a rally from there. For now, I am standing aside waiting on the next entry long.
10-21 – Reversal is close to target, expecting lower lows to $50 for support and a right shoulder. Will be watching for a reversal pattern this week for a long into February.
10-28 – Lean Hogs has broken the resistance trend line and I am expecting the next legg higher after we re-test the broken trend line. Looking for the next high into February.
11-4 – The advance is above the flag resistance trend line and I am expecting another advance this week into the blue trend line from June. Lean is higher into February and $75.
11-11 – No advance last week, and still leaning long here. Trend line support is expected and a break and conversion of monthly pivot is bullish here. Commercials are short which gives me pause here on the next long. I am waiting on the reversal pattern here before entering 1/2 size to start.
11-18 – Nice advance here on Hogs, likely will see the trend line next and a retrace then the final advance into the February time frame into the 75 area.
11-25 – Upside move complete for now, needs a wave 4 and 5 to complete this legg then a larger retracement. For now take profits and keep your size small, add lower after the wave 5 completes.
12-2 – Hogs is putting in a 5th wave here, likely we see a larger pullback after this move is complete to as low as the trend line. I am still expecting a rally into next year into 75s.
12-9 – Still waiting on Hogs to finish the wave 5. A flag is forming and expecting upside continuation into the trend line, retest then higher into February. The retest can see as deep as the trend line. Lighten up into the trend line early this week.
12-16 – Lean is still long and looking for the 5th wave into 70. Once seen, we see a retest of the previous degree wave 4 then higher into target of $75 by February. Looking for a low window around 1-12.
12-23 Retest still in progress and cycle date is still 1-12. Waiting on the next setup long. Still looking for $75 into February. I will be looking for early support and a reversal pattern at the trend line.
12-30 Retest is likely complete. We have no proof yet of a turn, so an impulse with a retest that holds the low would make for a good entry this week. Still expecting $75 and the next legg higher into the 2-25 time frame.
1-6 – The turn may be in, a conversion of monthly pivot confirms the turn. Lean is long into $75 into the February time frame. The rising support trend line is invalidation on the trade.
1-13 – The turn is likely in, $75 into February expected. Hogs needs to create more separation between the monthly pivot and price. That seen, I like it higher into late Feb.
1-20 – A surprise to the downside here, and a break of the trend line. I am waiting for a confirmation to enter, convert the monthly pivot at 68.625 and we have a turn. Until then, stand aside and wait as we can open a low retest from here.
1-27 – Standing aside for now on Hogs, I still like the upside from here. Looking for a reversal pattern above $60 – that seen I’ll be looking for the next long to the upside.
2-3 – Hogs now at $60 market and nice three down. Reversal needs to happen this week or we will invalidate the move higher. Looking for the monthly pivot to convert into support, that seen, I like $75 next.
2-10 – Hogs has made a lower low on Friday, I am long and watching this carefully. I am expecting this low with positive divergence to turn the market. Any break of divergence and I will exit this trade. I am currently long June futures at 76.95. Plan to take profit in 1/3s on the way to target at $85.
2-17 – I took my first 1/3 off for a small profit and putting my stop at even. This is a good practice as base hits are the main stay of a trader. Holding the remainder into March. If I get stopped out, I will re-evaluate the trade.
2-24 – I was stopped put last week at even on the remaining 2/3s of a position and currently looking to re-enter. Any reversal pattern this week will work. I am looking to put on a bracketed position as I am expecting more volatility.
3-3 – China is likely going to cause a global increase in the price of pork given their domestic issues. A reversal is expected this week and a low retest is needed before we see a convergence of the monthly pivot. A break of $58.00 confirms a turn and higher prices into April. I plan to reenter this week once I see a low retest. There is also a chance of a lower low and Positive D.
3-10 – China hog prices jumped 5% on Friday, expecting the shortage that I have already discussed to be reflected in global prices between now and April. Looking for continuation higher as we have converted the monthly pivot.
3-17 – China pork prices have risen 30% since the start of the year due to their stock problems. There is no short term solution except to import, which will drive up prices. I am expecting higher prices into April as the upper bollinger band ride should continue.
3-26 – One hell of a rally, over 42% since the article I published back on 2-24. China now driving the price of hogs which I am afraid all good things come to an end. Vietnam now has a serious infection of African Swine Fever also. Watch for the end of the initial rally by the cycle date. I will be watching for a reversal pattern, the long bus is very full. Inverted crashes do end badly, this one is no exception.
3-31 – Retest in Hogs as discussed, this is an inverted crash which I am aware will lean to a retest of the high first before a significant move lower. Expecting this in Mid-April around $100 then a break lower into the July time frame.
4-7 – Since the Commodity Newsletter published on 2-24, Lean Hogs had gained 45%. I re-entered the trade last week on the retest into the monthly pivot and the daily middle bollinger band. We have a higher high at this point and negative D so if you are in this trade get lighter as there is more risk. I see another week or so of upside into 105. There are longer term implications in China and their Hog stock which has been decimated by Africa Swine Fever.
4-14 – Approaching an inflection point this week higher into 102-105. Last week I started a longer dated position in February20 contract at $80 and have already taken 1/3 in profit and set my stop at even. I also exited a second 1/3 in the August contract and am holding a trailer. This week I plan to exit the August position in the 102-105 area. We have negative D, which could break, but the anticipation in China is now becoming reality as last week there was major import buying by China. There may be a sell the reality event this week which I expect to just be a pull back in the grand scheme. We have had a 45% run here and it is not over yet, but mind your risk to the downside.
4-21 – We are in a small triangle here, this is an indication of a terminal move higher into the 102-105 area as discussed. The triangle needs a wave D and E then the thrust higher. I am looking for a decent retracement into the May 15th window after the thrust higher completes. I am still holding trailers in August and February contracts. My plan is to legg out of both on the last thrust higher.
4-28 – According to the USDA and sources in China, the crisis there is worse than reported. Farmers are not accurately reporting the losses, and there is clear evidence that they are much worse that the 100 million heads that have been reported so far. The African Swine fever has spread into Mongolia and Vietnam and this crisis is being under reported in the media. I am expecting this to have major implications across meats globally and the retest we are in is likely going to turn into a consolidation triangle. Not much data here to actually call a triangle but collecting premium at the $80 area using a short put would be a good strategy. The lean is higher on lean hogs, we may see the consolidation into May 15th before we see higher prices. I am still long two trailers in August and also February. I want long exposure to this market for now, my stops are at even. See my latest Commodity Newsletter Advisory in the blog for more information.
5-5 And the plot thickens with China and the tariff negotiations. As of this publication, Trump is announcing that by this Friday there will be an increase to 25% on goods imported from China. Will the Chinese retaliate? If they do then we will see added volatility in this market. Keep in mind that this is a head line minefield market with Trump and the tariff story. My lean is the same, middle bollinger band is resistance until proven otherwise. We likely will see lower prices into 5-15 before the next rally. This is invalidated if we convert the middle band in which case I am still expecting 105-7 on the August contract. Still holding two long trailers in August and February.
5-12 – I exited the trailers last week in both Hog positions and plan to re-enter this week. With the head line minefield with China, I am exiting positions over the weekends as a risk management move. Plenty of opportunity here to make money, waiting for the open to re-establish positions. It appears that the turn is in and a few days early. Convert the red trend line and we have upside into 105-107/ I will be using the August and February contracts for entries.
5-19 – The lean is higher and China has cancelled all near term hog imports from the US. I am expecting volatility as the trade talks has broken down and China is putting in place reciprocal tariffs and halting the import of certain US good. I am standing aside for now, I may re-enter on a break lower, Selling puts at $80 in August or February interest me at this point in time.
2-10 – With the rejection candle that printed two weeks ago, I decided last week to enter Live Cattle short. This is a counter trend move into April and is long dated enough to justify an entry. I don’t like to trade counter trend often but this looks like a nice setup. We are currently three back and I am looking for a move lower into April. I am currently short April futures at 127.075 risking the trade to 128.35. I plan to take profit in 1/3s on the way to the objective of $120.
2.17 – Still a hold as Cattle has broken the support trend line, I want to see some separation from the higher and impulse into 124.77. I will be taking off my first 1/3 in that area. Still looks good lower into April.
2-24 – Cold weather in the mid-west and cattle prices have climbed. I still am looking at a decline here and technically see the move higher as a retest. Lean is still lower and I am still hold my futures short. Nice double top here and looking for a move lower into 124s next.
3-3- Cold weather continues and cattle prices have held their ground. This market is ready for a correction, the cold weather creates supply concerns. I am expecting prices to fall into Q2. There is a reversal pattern forming, the current high needs to hold.
3-10 – Same theme as last week with cold weather holding up prices as beef weights are coming in lower than expected. This will change quickly when the weather turns. Still holding my short position. Looking for a confirmation short on a break of the red trend line.
3-17 – Just when everything looked great, Cattle reversed hard. I am still short as Q2 is usually the highest production annually and I am expecting prices to drop. Prices are being held up by weather concerns and low beef weights. This will change in the next few weeks.
3-24 – Hanging in there with the short, stock yards are a wreck and likely we still see prices fall into Q2. I may modify my position this week once we get back below the R1, adding size on a confirmation is not a bad idea here. I will be posting this entry on our private twitter feed.
3-31 – Patience pays off and so far I am out 1/3 in profit and holding my short at even stop. We are five down as of this post and I am expecting lower prices. Retest should start Monday and I plan to take a second 1/3 in profit. Watching for resistance around the monthly pivot and then lower into our cycle date.
4-7 – Live Cattle, I took a second 1/3 in profit Monday and was stopped out at even. Looks like a flat and I am expecting a lower low this week. Once seen, I am looking for a new high in the July time frame and will be hunting the long set up this week. Look for my post on our twitter feed.
4-14 – Winter storm this weekend in Nebraska and this made traders twitchy last week, lower lows still expected as the Q2 seasonal pattern is likely going to play out. A lower low here is going to get bought, I like this higher into the July/August time period starting next week.
4-21 – Called this turn incorrectly, the low is likely already in. We are about to make a 5 wave sequence higher which means that we have already started the next trend up. Watch for the retest of the low and a test of Monthly Pivot. This is a good long play into the June/July time period and the 130 area.
4-28 – Read last week’s post as this is a common mistake made by traders. I assumed as the back test went further than expected and that we were through the bad weather period, that cattle would do a 5 up. Well, it did not. It actually came back exactly into my expected target area. No big deal as I roll with the punches better than most traders, it is what it is. As of Friday I have entered with a /.2 size bracketed long position and am looking to add size if we see lower prices. The original three down target has been made here, we have risk as low as 110. Given the high production in Q2, no surprise on the drop, but the feeder cattle issue should become more apparent in the coming months. The winter has had an impact in the number of calves that are available for feed lots. This means higher prices should play out into late June. There is a seasonal low for cattle in this time period, this may be an early entry, and I am looking for a reversal and higher prices into late June.
5-5 – I am long Live Cattle as of last week, 1/2 size position and waiting on a confirmation to add the second 1/2 size position. Looking for a reversal this week and a move higher into June. the Lean hog crisis may have an impact here as China may look to alternative meat products in the future. I am bracketed long my futures with a June long puts at 113 and short the 118 calls. One futures per call and put.
5-12 – Live Cattle may have a key reversal in process, we need to see continuation higher to confirm. Looking this week for the low to hold and the weekly pivot to convert. I have exited my short calls for a profit and will exit my puts when I see a confirmation of a turn. The next high window is in mid-June.
5-19 – As mentioned, we may have a reversal here. I exited by short calls and am holding the futures and puts. I am looking for a conversion of the declining resistance trend line and when seen, I am expecting a rally into mid-June. Covert the trend line and my puts come off for a small profit and I will hold my naked futures into the cycle date.
Soybeans and Soybean Meal
4-14 – I have been waiting on a clear setup on Soybeans and Soybean meal and it has not arrived. I usually wait patiently for the setup and if I miss it – so be it. But in this case and with Trump announcing the China trade deal is likely done in two weeks, I am wading in 1/2 size on both futures. Last week I initiated longs in both Soybeans and Soybean Meal with 1/2 size positions, both the July contract and entries at 912.25 and 313 respectively. I’ll be looking this week to exit my first 1/3 with a stop at entry. Will there be expectation buying before the announcement? Maybe. But we do have a nice seasonal trend starting now in meal so let’s see what happens this week. When I use 1/2 size, I am small so I am managing risk with size. Manual stops on both positions.
4-21 – Soybeans has made the lower low to the trend line which is likely support. I have added Thursday the other 1/2 size position so now my average is 902, and I have bracketed the trade by adding the July long put at 890 and helped finance the put with the short the 920 call. I am still looking for a reversal in Soy and Meal this week. No change to the Meal position for now.
4-28 – I am looking at meats in general for higher prices and mentioned on our private twitter feed that I am entering Cattle long and add size to Lean Hogs long. In the process of doing this, adding risk to my portfolio, I always try to cull those trades that are not doing what was expected. Soybean Meal I had a 1/2 size on and is a seasonal trade. I have cut it for a small loss here, just reducing my risk since I am adding risk in a different asset class. I have exposure to Soybeans so I am happy with carrying it. The triangle in Soybean Meal can break down here so if you are in this position mind your risk. My lean is still higher on Soybeans, holding the bracketed long, looking for a reversal this week and higher into the June time frame.
5-5 – Wise move exiting Soybean Meal as the trade has broken down from the triangle, and I have exited the short calls on my Soybean trade for a small profit. I am expecting a reversal this week and am waiting for proof before I exit my protective puts. Once I do this I will hold my futures into the next rally. I’ll be keying on the weekly pivot this week as a support for the confirmation of a turn.
5-12 – Soybeans has now seen record short selling by fund managers, this last week’s COT report shows record short positions by both non-commercials and record long positions by commercials. China has canceled some near term Soybean shipments from the US, see more about the fundamentals of this market HERE in the latest Commodity Newsletter. My current position is the same, my loss is fixed, I am holding puts until the trend line is converted, I am looking for a reversal and when seen, my aim is to capture 17 handles to repair this trade. Right now Funds are in a very exaggerated position and are pricing in a trade war. Any good news from China and this commodity should rally big. I wait patiently for the setup with 40 days remaining on this position.
5-19 – Nice rally and a squeeze as discussed last week. New record COT shorts by funds are good fuel for a rally. Expecting more follow through this week. Find support on the open and I will likely close out my puts for a big profit and hold my futures long.
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Track Record of Completed Trades
The purpose of this blog is to demonstrate how to swing trade futures using our methodology to select high-quality setups and manage the trade with our risk management approach. This track record is based on entries and exits as posted in this blog using a $50,000 account limited to a three contract position size until account size warrants an increase in size. See the videos below for more information.
*** There is a substantial risk of loss of capital when trading and/or investing. Past performance is no guarantee of future results. See our disclaimer here.
Completed trade in Cattle as of November 28th
We expect subscribers to have captured 60% of the swing in live cattle which is over $14,500 in profit using a margin of only $5,115. A great example of using leverage in futures.
Completed Trade in Coffee as of December 12th
The total swing was $37.00 and we expect subscribers to have captured 60% of a wing or $22 in coffee for a profit of over $25,500 using a margin of $8,850. A great example of using leverage in futures. See the video below for the review of the trade.
Completed Trade in Natural Gas as of January 2nd
We were stopped out of out last 1/3 position as weather-related news created a gap down on January 2nd and a possible flat with support at 3.196. This concludes our trade with natural gas; we exit with 550 ticks on 2/3s of a position with $8,500 in profit.
Completed Trade in Coffee as of January 19th
We exited the coffee trade on January 19th with $17 or over $15,000 in profit using a margin of $8,850. A great example of using leverage in futures.
Completed Trade in Gold as of February 8th
We exited the gold trade on February 8th with over $14,000 in profit. We entered on January 3rd and held the trade into the high window. We will re-enter gold in a few weeks after a backtest.