The Weekly Call – Trade Setups for the Week of January 28th

The Weekly Call – Trade Setups for the Week of January 28th

The Weekly Call provides perspective on high quality setups and trading strategies. Our current performance showing over a 200% 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 week I am managing trades in Soy, Sugar, Coffee, Gasoline, Soybean Oil and looking to initiate new trades in Corn and Live Cattle.

This past week I exited the Gasoline trade with a 81% profit and also took profit in Coffee which is a 40% profit so far. I am holding Soy, Sugar and Soybean Oil. I am currently at a 296% profit on margin since October of 2016 and my win rate since then is 68%. January is off to a good start with the completed trades in coffee, natural gas, soy and gasoline.

All trades posted here are discussed in detail on our Daily Update Subscription Service and posted on our private twitter feed. Our track record is posted below under Completed Trades. See some of our completed trade videos below.

The trades below are discussed on the Daily Update: Click Here for a FREE Trial

 

Soy – Re-entering the Trade

12-31 – No position currently, but a reversal pattern has formed and I am looking to initiate a position early this week. The light tape last week as formed a double bottom on Soy and I am expecting a conversion of the weekly pivot this week. This will be price confirmation of a turn.

1-7 – I entered Soy last week at 962 and am expecting a rally into February. I am already off 1/3 of the position as as are 3 up and are past 50% of the previous swing. I am waiting for the trend line support and am looking for more upside this week. Break the trend line and I am out of this trade.

1-14 – After developing a bear flag, I decided to exit the Soy trade at 962.75 for a 12% return on margin. Good decision as the he bear flag has played out lower. I have reentered at the three down target at 952.50 and am waiting on the higher low to add more size.

1-21 – The recent low was a good entry and I have exited my first 1/3 as always at 50% back the previous swing at 969s and the second 1/3 at the monthly pivot 979s. I am now waiting for a pullback into February 1st or so and will add size when seen. February has historically been a bullish month for Soy so I am watching the retest this week with interest.

1-28 – Still waiting on the retest and so far I see an “a” wave lower, looking for a three down to complete around the monthly pivot (the blue line) and then expecting a rally. There is usually a seasonal rally in Soy that starts in February. There is no guarantee that it will play out but the chart is aligned with seasonality so looking forward to adding size to this trade this week.

Corn – Planning the Entry

Corn Is getting close to a reversal pattern and I am planing to enter sometime this week. Either corn is going to double bottom or just break out to the upside. I plan to enter on the pullback if the breakout is seen. Members of our private twitter feed see the actual post for the entry and all trades are reviewed on The Daily Update Video.

11-19 – Nice movement into our target area at 336’4 – nice reversal from that area and now waiting on the retest. Once seen, we enter long Corn and plan to manage the trade into January.

11-26 and 12-3 – Still waiting in the setup. Right now we have a potential reversal pattern which can break lower as a triangle thrust. I am waiting to see the resolution of this swing lower. If we break the monthly S1 (the green line) we likely head lower directly and I will wait to enter in the $344 area.

12-10, 12-17, 12-24 No changes and I am still waiting for the setup. Looking for a turn and a conversion of monthly pivot to confirm the low. Looking for a higher low this week and the larger reversal pattern to initiate a position.

12-31 Patience pays. I have waited for the setup and it has finally arrived. We may still see a small wave C for the three down that is currently incomplete, but the inflection area is near and a reversal pattern is almost fully formed. I am watching for an entry this week.

1-7 and 1-14 No entry this week as I am waiting for the crop harvest in the southern hemisphere to play out. I like to wait until all the signals I watch line up. We have a nice reversal pattern here, but chart patterns alone are not enough. I have plenty of time to make money here, so prudence outweighs getting into a trade that seasonality does not support. I will wait another week for an entry.

1-21 – Possible entry this week as I am watching for a pullback 50% or so into 348s. I will be watching RSI and price to look for a reversal pattern. We may see a marginal new high before the retest. I am expecting a rally into May.

1-28 – I missed the entry last week and will not chase, there will be another bite at the apply. At this point I need to see negative D on RSI and marginally higher prices. The next retest should hold at monthly pivot and this is the entry I am looking for, three back into this area.

 

Coffee – Managing the Trade

11-26 – Last week I entered Coffee at 126.25 and we have seen a nice impulse higher. I have already scaled out 1/3 in profit at 128.90 and my stop is currently at even. The 50% back the previous swing area is ideal for taking initial profits as this is often a reversal area. At this point, I am waiting on a conversion of the Monthly Pivot (the blue line) as confirming price action and am expecting higher prices into March of 2018.

12-3 – I managed to take another 1/3 in profit last week at $131.70 as posted on our private twitter feed, stop is still at even. I expected a back test which has happened and am waiting on confirming price action above weekly pivot to add more size. We have risk here to $126.00, watch for another legg lower. I am still expecting the rally into 12-15.

12-10 – The trailer I was holding was stopped out this week on a quick move lower, which is why we use the 3P method in managing risk. So we exited with 2/3s in profit and are looking for our next entry. The low window on 12-12 and the trend line just below may prove to be the setup we are looking for. There is a smaller reversal pattern on a 5 minute chart, any conversion of 124.90 signals the upside. I will be looking for an entry early this week.

12-17 – As mentioned last week, I entered Coffee at 121.85 and am expecting a rally. Last week I exited the first 1/3 for a small profit as we are three up and in a possible flag formation. I am expecting a break out to the upside this week and I will sit and be patient this week to see what Coffee has in mind.

12-24 – The flag has broken down and I am still in the trade. Looking for an exit at weekly pivot if resistance is seen. At this point, it is a 50/50 if we break down or rally. Tuesday price will decide. If last week’s low is broken, I will exit the trade.

12-31 – Last week I took a second 1/3 in profit as we are now in a flaggy structure and in a three up structure. A retest is expected this week and I will be looking for support in the 123.50 area. Any beak of the lower channel trendline and we open new lows. I am even stop and in a risk free position.

1-7 – I am off 2/3s in profit and am waiting for the last legg up into the 133-34 area. Currently there is a small flag/triangle forming and I am expecting a 50% back retest after the next target is achieved. I will be exiting the last 1/3 in the target are and re-entering the trade when the opportunity presents itself.

1-14 – Last week Coffee did a retest and is now at a critical juncture of either finding support at the trend line or failing and making a new low. I have added size at 123.50 as I am expecting the trend line to hold. I am still holding a 1/3 trailer from the previous trade. Break the trend line and I will exit this trade.

1-21 – I exited the trailer and closed the original long position in coffee for a small profit as I have decided to hold the added size position. My exit of the trailer is a risk management move to get lighter as price is not acting as expected here. We now have a potential double bottom and I am expecting a move higher starting Monday. Bulls must perform here. Failure to convert the monthly pivot at 124.50 will result in a new low. There is risk in the trade into the $117s.

1-28 – I held the trade and cashed out of 1/2 size at 125.40. I am holding the other 1/2 size position. Price has closed above the monthly pivot, it needs to stay there and continue the rally. Any break of the rising support trend line invalidates this trade and I will exit if seen. There is still risk of a lower low at this point as there is not enough separation from the turn. Monthly pivot needs to convert this week.

Gasoline – Managing a Seasonal Trade

Seasonal trades make sense if in the last 15 years you can find a pattern with greater than a 70% win rate. This is the case with Gasoline as typically we see a rise in price into the summer season. I have already entered a 1/2 size position with no stop at 1.7946. I will allow this position to swing quite a bit as I am looking into the March time frame for an exit. I will be adding size and legging in and out multiple times between now and then. This is just small size to put my toe in the water for now. More on this trade next week.

1-14 – I entered long at 1.7946 and last week I exited 2/3s of the trade at 1.8110 and 1.8321. I am holding the trailer and am waiting for the H&S formation to either succeed in which case I will then add more size or fail in which case I will get stopped out. I expect heating oil producers to flip over to making Gasoline in the March time frame so I will be out of this trade at that time.

1-21 – I am still holding the trailer as we are making still making new highs and moving toward my three up target at 1.9123. I will be looking to exit my last 1/3 in this area and looking for a back test into previous resistance at 1.83s. I will be looking to add more size at that time.

1-28 – I have punched out of my trailer at 1.9202 and am flat Gasoline with an 81% profit in 2 1/2 weeks. At this point, the seasonal cycle should continue higher after a backtest in the 1.86-1.88 area. I will be looking for a second another entry when seen.

Sugar – Managing the Trade

1-14 – I have entered a new position 1/2 size in sugar. We are now near exhaustion on RSI. I am expecting support here at the monthly R1 (the green line) and will add size to the trade after we have a reversal pattern. Sugar is in a possible triangle into the June time frame and is in a range trade.

1-21 – The trend line has broken and the range trade is also broken. The plan for the trade is broken so I am now looking for the exit door. I double my size last Friday and my average is now 13.93. I usually do not capitulate on a low and I am looking for resistance here at roughly the trend line we broke at 13.81 or so. I will exit the entire trade on a three back and will watch for lower prices. I am expecting a 4th wave here then a lower low in a 5th wave and a more definitive intermediate term low. Trades do break and plans fail. Trying to justify or  repair the trade or suddenly changing the plan to something else is nonsense . I’m out on a decent three back with resistance and will look for the next setup lower.

1-28 – The trade is still broke, not trying to fix it, looking for the exit door. Back test has started and I do not yet see a three up. Will exit when seen and take my loss. $13.60-.80 is the area.

Soybean Oil – Managing the Trade

Soybean Oil is a seasonal trade this time of year as there is not another harvest until May. I expected prices to rise steadily though the end of February. I have initiated a 1/2 size position at 33.29 and am waiting on a reversal pattern to add more size to the trade.

1-21 – Soybean oil is usually a seasonal long this time of year and I still like this long into the end of February. My stop is below the triangle trendline and I am planning to add size this week as we have clear positive divergence on RSI. I am a little early on the my 1/2 size entry. Soybean Oil usually has a decent February along with Soy so waiting patiently on a reversal pattern here to add size.

1-28 – The seasonal trend in Soybean Oil I believe is now in action. I am riding only a 1/2 size position and will hold the trade for now until the retest of the low. Once seen I plan to double my size.

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COMPLETED TRADES

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. We will increase position size after we generate a 200% return. See the videos below for more information.

There is 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.

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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 back test.

 

About the Author

Stan Nabozny
Stan is a 20 year retail trading veteran and Co-Founder of The Art of Chart. His specialties include using futures and options to trade Commodities, Equities, Currencies, Precious Metals and Bonds. Stan believes that Risk Management and Trader Psychology are more important that technical analysis and spends his time teaching and coaching other traders on these topics . Stan uses various trading systems and technical analysis approaches that integrate time and price in his work. See his latest articles here and www.huffingtonpost.com.

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