The Weekly Call – Trade Setups for the Week of July 7th

The Weekly Call – Trade Setups for the Week of July 7th

The Weekly Call provides perspective on high-quality setups and trading strategies focused in the Commodity world.. My current performance shows a 419% return since October 2016. My goal for this year by October is to have a 450% return for three years of running this blog, I am well on my way. 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.

Last week I entered Live Cattle for a long trade into the 109 area and also entered Sugar for a long trade into the 13.60 area. The Sugar entry was stopped out for a small loss.  I am in profit on the first legg in Live Cattle and currently in a risk free position with my stop at even. I am mixing different time frame trades here and I have started auto-trading at Striker with a smaller size account. These two trades are short term and single legg trades which I encourage everyone trading a small size account to do. These trades wilI last only a week or two and I have these trades mixed with my longer term swing trade in December Corn. This trade should continue to have an upside lean and continue to be volatile as the Corn numbers are still uncertain. By August, we should have clarity but small weather changes and the weekly reports will move this market. I have added a hedge to the trade in case of event risk with high gamma so if we pass through 410 strike  the position will come back onside quickly. At this point, I am a hold on Live Cattle and Corn.

I am looking at entries in Hogs, Sugar and Oil for this week. More information on my 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 Weekly Call can now be auto-traded on Striker.com. Just call Striker Securities and open an account of at least $25,000 and every trade I make here will be made for you automatically there. I am planning to use the same methodology and risk management approach with the auto-traded account at Striker that I have been using here. If you have a Daily Update or Trader Triple Play membership, there is no subscription fee for the auto-traded account at Striker. For more information, call Striker.com and speak with William at (800) 669-8838. For more information, you can also watch this video from our last subscriber Q&A HERE.

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

 

Sugar

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.

5-26 – A nice setup on Sugar. On the daily chart, COT Commercials are positioned well as is retail. The 4 hr chart shows positive D and a higher low. Now the bulls just need to show up and prove it to me. As mentioned in the Commodity Advisory Newsletter with a special focus on Sugar there is also a fundamental reason for the long. Nice to have a tail wind, looking for an entry this week.

6-2 – The rally is confirmed, I am expecting $13 by mid July. The rising support trend line is the area to legg into the trade. Positive D has room to run on RSI.

6-9 – Nice rally last week and retracement expected this week back to the mid-line of the channel. Once seen, look for the next rally higher into $13.00

6-16 – No pull back last week and still expecting continuation higher. Support at 12.25 and looking for a retest this week and higher into 13.25 by mid-July. The market dynamics of Sugar are changing this year as we have a few countries that will miss their production targets.

6-23 – The pull back nearing completion now and against the support trend line. Should see continuation higher this week and a test of 12.65. Break and convert and we are on to the upside into 13.20. Fail at the support trend line and watch the 50% back area for the next buy area. The longer term lean is long sugar.

6-30 – We have reversed in Sugar and we have a nice setup here for a long against the monthly pivot. Looking for my next high window in Mid July and a target of $13.20. We should see a supply deficit this year in Sugar as mentioned in my previous Commodity Advisory Newsletter.

7-7 – Entered Sugar long last week as I was expecting a turn higher and gap support. I have been stopped out at 12.30 for a small loss. Sugar has the strength of the Real behind it and also the supply deficit that I am expecting this year. I am waiting for the next setup as I still like Sugar long into the $13.60 area into the end of July.

 

Coffee

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.

5-26 – Coffee and Sugar go together, in many different ways. Looks like Coffee has converted 92s, it needs to hold on a retest and we likely see a higher high for a wave 5 to complete wave W. The retest from there is my entry, expecting 90 or 92 as support and will risk $1.50 on the entry in the October contract. I will likely bracket this trade as well and the daily chart does not show a quality setup.

6-2 – With the collapse of the Brazilian Real, we have seen a rally in Coffee. We have already hit target at 105 and I am expected a pullback into the monthly pivot area around 100 and will be looking for an entry. I am waiting on subscribers to finish their enrollment with Striker.com and will be starting new positions later this week.

6-9 – Made the retest to 100 per comments last week and now coffee is in the next impulse higher. Looking for 110 next for a 5th wave and the end of the first legg up. I will then expect a larger retrace back again to 100 before the next big step up.

6-16 – Last week the retest to 100 was broken and now we are in a larger three down. Most of the movement is currency related and I am looking for support at 97 then higher prices. No reversal pattern yet, but should see one this week. Higher high expected into the end of this month.

6-23 – Support found as discussed and a larger reversal pattern now formed. Looking for support at weekly pivot at 100 and higher into my cycle high date of 7-2. Brazil’s production is declining this year and we may have a global deficit in Coffee of 1-3 million bags. The Brazilian Real is up which is helping the rally. The outside day on June 19th was a solid clue. Should see the rally develop this week. From the 7/2 high, a pull back and higher to test the longer term declining resistance trend line is coming.

6-30 – As discussed last week in the Commodity Advisory Newsletter, Coffee may have a 1-3M bag deficit for the first time in many years. This combined with the strength in the Real and we have a formula for higher prices. At this point we are topping out and I am looking for a minor new high and negative D on RSI and then lower prices into my next cycle low window. Likely we find 104-105 as support and another opportunity to buy.

7-7- Cold weather and fear of frost has pressed Coffee higher. The weather has not caused any crop damage yet, but if it does we can expect traders to bid this higher. Currently expecting a retest into the 107-108 area and we have 105 below that as support. Watch for the gap to hold price up, looking for an entry when seen and higher prices into the 120s. We will break the weekly declining resistance trend line which will be the end of the longer term down trend in coffee.

Lean Hogs

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.

5-26 – I am still standing aside with Hogs. Lots of fundamental reasons to buy. I may sell some puts as I wait for this sideways formation to end. We are likely forming a triangle here and yes, this can break down into 80-78. If I enter this week, please see my entry on our private twitter feed. If Lean Hogs is going to break lower, it should occur on Tuesday as we are currently at support.

6-2 – I am still standing aside on Lean Hogs waiting on the setup. I am expecting to see 107 in the future and think that we may see 81 first before the next rally. Any resolution of the trade deal and we see a big rally here. Until then I will be patient and wait for a better setup.

6-9 – Looking for the three down to complete, and very close to the 100% fib here. Likely we see a reversal his week and the next legg higher. LH has potential to see 105-109 longer term but for now with the tariff in the way I’m not expecting the Chinese to buy record amounts of Hogs. I am planning to play the next legg higher once the setup presents itself. Lower prices are in store first.

6-16 – Of all the global commodities, Hogs and Corn have the most upside potential. So far no setup for a long and lower to the 100% fib is possible here. Waiting patiently for the long and planning to buy Feb 2020 contract. Post July, I am expecting the next major step higher.

6-23 – Made target as mentioned last week and at the 100% fib target. A dead cat bounce likely here and a retest of the low into July . With the G20 this week and the Americans and Chinese negotiating the tariff deal, we should see a head line minefield. Lean Hogs is a solid candidate for a big upside gain into 105 if we see a trade deal. I have already written about the Lean Hog crisis in China and this will continue for years to come. This is likely the largest Agricultural crisis ever seen. Once the tariffs are lifted, larger volumes will ensue. I am waiting on a clear setup for a long, just because we are at target does not get me interested. Time and price need to come together for a quality setup.

6-30 and 7-7  –  Nothing has changed, and the flag has broken lower. Time and price not yet together here so still being patient. Likely we see the last legg down into the July cycle low and I will be interested at that time for a reversal. This crisis in China and Vietnam has not subsided and likely will change the Chinese Ag system in dramatic ways. For now I am patient and looking for a long setup in this market.

 

Live Cattle

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.

5-26 – Closed out my puts for a profit last week. With the profits from both the short calls and long puts, I now have an even stop below the low. I am ready for the bulls to show up. The set up is there, the higher low needs to hold and we open 111s next. I plan to hold the futures and legg out on the way up and hold these into the contract expiry.

6-2 – With the front month toting a hefty premium we have seen it collapse last week and I have been stopped out at the previous low. I leave the trade with a small profit and will look for an entry into the August contract in the next 5-7 trading days.

6-9 – Looking like a nice setup here for higher prices. Little risk with a stop below the low. Leaning long here for an entry next week and a move into 110s next.

6-16 – Live Cattle has a nice setup long, expecting a conversion of monthly pivot as a confirmation of the long. Next legg is higher into 112. If seen we should see continuation higher into the end of July. Weights now are as low as they have been in three years.

6-23 – Live Cattle did not convert monthly pivot and has made a bull flag in a three down. The low may hold and if it does the weekly pivot will convert which is the signal to buy. Weekly pivot is 103.75. Looking for a bullish stampede in the coming weeks.

6-30 – And the bullish stampede has occurred! A bullish engulfing candle printed last week on the daily chart and we likely have a reversal here. Follow though required and looking into August for at least a 112 print. Nice setup here against the weekly pivot.

7-7 – I entered Live Cattle last week in the front month, long 104.85. I am out one legg at 106.00 and expecting the last legg to finish somewhere in the 108.50-109 area. We are finishing a 5 up structure and likely will retest back into the monthly pivot area. I plan to add size on the pullback and may exit the first legg entirely if I see a good press higher into 109. For now, my stop is at even and we are in a risk free position.

 

Corn

6-30 – I have initiated a position in December Corn last week and am looking at a longer term swing trade. I started with a DEC risk reversal Long 500 calls and Short the 430 puts. As long as the December future prints above 430 the position is not at risk. As mentioned last Friday, the Crop Report was a shock with the USDA Corn acreage unplanted at 1.1M acres. In the coming weeks this will be clarified and expect high volatility until then. At this point I want long exposure and will hedge on a move below 430 to minimize risk. Likely we see a marginal lower low for a wave 5 of a flat and a reversal and higher prices into 480. I think most traders are in the boat that the USDA numbers are low and the damage due to rain and late crop plantings will play out into the end of this crop year. More to come as this story unfolds.

7-7 – We have reversed in corn and last week I added a hedge in the front month by buying the 410 puts. This provides event risk coverage in case of a sudden move lower and higher gamma so a downside move below that strike will quickly bring the position back onside. I have already discussed the Corn situation…. the USDA numbers are likely wrong, we won’t know the real numbers until August. Emerging numbers are low and yields should come in between 155 and 163 bushels per acre. This means that this crop year is likely going to be at least tightest since 2013. If we hit the mean for the yield around 159 bushels per acre then we may see the second tightest market in history. I am a hold on the position and I want long exposure into the August 24th high window.

 

 

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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 until account size warrants an increase in position size. See the videos below for more information.

 

Track Record January 2018 thru December 2018 Click Here.

Track Record October 2016 – December 2017 Click Here.

*** Trading futures contracts and commodity or stock options involves substantial risk of loss, and may not be appropriate for all investors. By reading this web site, you acknowledge and accept that all trading decisions are your sole responsibility. Trading strategies referenced on this web site and associated documents and emails are only suggestions, no representation is being made that they will achieve profits or losses. 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 backtest.

 

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 Energies, Precious Metals, Equities, Currencies, Bonds, Softs, Grains and other commodities. 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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