The Weekly Call provides perspective on high quality setups and trading strategies for the coming week. We carefully select these setups due to their quality and profit potential and we report back on results. This week we manage our trade in gold, exit coffee and wait on a better setup in Cocoa.
Our track record for the last three months is now posted below under Completed Trades.
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Gold Trade – Managing the Long
1-1 – Per the Daily Update, we recognized a small day trade long from the weekly pivot last week into the 1165 area. Resistance here and a backtest into the 50 back area, 1143 inflection area, is a setup for a long into the 1180 area. Break below 1138 and a new low is likely. This is not yet the setup for the larger long we are hunting as there is still downside risk to 1111-1105. We are still waiting on the US Dollar to make a new high to confirm a turn.
1-8 – The setup at the inflection area has worked and we tweeted out last week to exit 1/3 of a position at the 50% back area and another 2/3s at the three up at 81s. So far we have a profit of 22 handles. At this point with stops at even, we wait on the backtest to resolve. We are looking to add to our position with support at weekly pivot at 68 if support is demonstrated or if broken at 55’s. We are expecting 1232’s if 55’s remain support. A break and conversion of 1200 confirms the low is in.
1-15 – We have not been able to reload long as there has not been a pull back of any significance yet. So far we are up over 55 handles and recommend that you have a small trailer long remaining. Last week we mentioned on the Daily Update to watch 1210 for resistance which is playing out. We are looking to add back to our position after support is seen at 77s or 65s. A break of 55’s invalidates this trade and invites a full retest. Higher prices still expected into 1232s. a break and conversion of 1200 confirms the low is in.
1-22 – We have not seen enough of a backtest yet to consider adding more to our position. Still possible to see 1193s. Still holding 1/3 long and waiting for target 1231s. If seen with neg D we will punch out long and wait on the backtest to re-enter.
Managing the Long in Coffee
Looking for Wave X and a new high in Coffee. We expected a turn in the 133 area which has occurred and we are 50% back the previous swing. Here is where a decision is likely made.
1-1 If we break 141s likely the 133 area is the low – wait for a three back to enter. If we find resistance between here and 141s then expect a new low in the 126-127 area. In the 126-127 area, wait for a reversal pattern then enter. We are expecting an initial target in the 155 area and may see a new high in Coffee by the end of 2017.
1-8 In the 50% backtest on January 3rd, we entered long per the instructions above and we have taken 1/3 off at 140’s. Our stop is even and we wait for a retest of 140.60 as support. If found we expect the X wave to be complete in coffee and we wait on further upside. A break of 138.95 risks further downside and if 108.95 is converted into resistance then 126s are still possible, although the odds are less than 30%. We are still targeting 155s
1-15 – So far so good on the long, we advised Friday to take another 1/3 in profit so we are off 2/3s now and are up over $15. Stops still at even and we wait on the backtest into 144.10 or 141.95. We plan to add back to our position if support is demonstrated. Invalidation is a break below 140.40.
1-22 – We tweeted out the exit for Coffee on Friday as we made target. For now we stand aside and wait on the backtest to re-enter long. We recommend not swing trading this short. This completes the coffee trade. Please see the track record and video below.
Cocoa – Looking to Re-enter.
We were hunting an 18 month cycle low in Cocoa – this is a very volatile commodity and we suggest trading this only if you are experienced in commodities and risk management. There is a likelihood that this low can be the beginning of a change in trend for this commodity.
11-20 – On the Daily chart we have hit our target area of 2383 and expect to find support. There is still downside risk to 2231. We recommend initiating a position on a higher low and expect to take 1/3 off our position at 2531 and set our stop to even. If we are stopped out below the current low we will look to re-enter at a higher low closer to 2231. The cycle low window ends on 11/23.
11-27 – We are still hunting the low and are currently long with a stop below the low. Waiting on 2531 to take off 1/3 and place out stop at even. There is still downside risk to the trendline. If seen, we will be stopped out and will reenter at the trendline below.
12-5 – Nothing has changed, we are still currently long with a stop below the low. Waiting on 2531 to take off 1/3 and place out stop at even. There is still downside risk to the trendline. If seen, we will be stopped out and will reenter at the trendline below. Timing cycles look positive.
12-11 – We were stopped out of our previous trade below the low and have already re-entered the trade at the trendline as mentioned last week. Timing cycles on the cycle chart below look very positive and we are staying the course on the cycle low. Our stop is below the current low.
12-18 – We tweeted on 12/14 to exit the first 1/3 of the long since we were 50% back the first swing while placing stops at even. At this point in the trade, we wait and see what happens at the current higher low. If we are stopped out we will wait for the next long setup. We can see three up to 2368 if we make the turn. This is an inflection point, the next two trading days will decide if this setup worked as planned.
12-25 – Nothing has changed and we are waiting patiently with 1/3 of the trade in profit with our stop to even. Timing cycles are still on our side.
1-1 – We have been stopped out at even with 1/3 of our trade in profit. We are expecting a lower low and a reversal pattern in the next 7 trading days. We expect another setup and a turn between now and 1-12. Watch for a new low and reversal pattern in the 2060-2080 area.
1-8, 1-15 and 1/22 – We are waiting patiently on a better setup which may occur by the end of January. An entry at 2096 or 2073 on positive divergence is a possibility this week or early next week.
Natural Gas – Initiating a new Long Position
We were stopped out of our previous position in Natural Gas with 2/3s profit on hand. ( see the completed trades video below). We have already enter long again based on support being demonstrated at 3.10. This long was recommended last week on the Daily Update and if you do not have a position we recommend that you wait for the pullback into the 3.355 area and consider taking a position. The flat played out above the 3.065 area which lead us to re-enter long. Wait for the short term high to finish around 3.60 and re-enter on the backtest at 3.355. We are looking for a high timing cycle window into mid February.
1/22 – The support at 3.355 was broken and the trade stopped out. We will stand aside in Natural Gas until the low window resolves itself by 1/31. We may return to NG next week.
Have a GREAT trading week!!!
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 three contract position size. See the videos below for more information.
Completed trade in Cattle as of November 28th
Following up on our completed trade in Cattle last week please see the video below for our thinking behind this trade. We expect subscribers to have captured 60% of the swing we suggested which is over $14.00 in Live Cattle for a profit of over $5,680 per lot.
Completed Trade in Coffee as of December 12th
This week we are in our low timing window in Coffee and we are recommending an exit on out last 1/3 position. The total swing was $37.00 and we expect subscribers to have captured $22 in Coffee for a profit of over $8,000 per lot. See the video below for the review of the trade.
Completed Trade in Natural Gas as of January 2nd
Were we 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 on the weekly call with Natural Gas, we exit with 550 ticks on 2/3s of a position.
Completed Trade in Coffee as of January 19th
We exited the Coffee trade on 1/19 with over $17 in profit and over $5,000 per lot. This concludes our trade in coffee. We will stand aside and wait on the back test before entering again long.