The Weekly Call provides perspective on high-quality setups and trading strategies focused in the Commodity world.. My current performance shows a 416% 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.
I am returning from Holiday after being off for the last two weeks. A much needed break and my batteries are recharged. It never surprises me that I take time off and the markets get volatile, happens every August. The USDA crop report is tomorrow and I am expecting volatility. The USDA report will move the markets as the planted acreage will be revealed from their resurvey. Corn should rally and I am taking profit on the short 450 calls before the announcement to leave the upside open. The puts stays on as a hedge. Last week I was stopped out on my Live Cattle trade and am standing aside for now. I still like it long into the fall as I see a shortfall of production coming. Of interest this week are Crude, Coffee, Hogs and Sugar.
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
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.
7-14 – Sugar currently in a compression pattern here that appears to be a triangle. Waiting on a clear resolution. There is risk to $12.00 and a possibility we could see a fall to this level. If seen, this is a strong buy. I am expecting Sugar to go higher directly into $13s as the compression should resolve higher directly. As mentioned in the Commodity Advisory Newsletter with a special focus on Sugar there is also a fundamental reason for the long. Looking for a possible entry this week.
7-21 – Sugar has resolved the compression pattern lower and likely will see $11.28 before the reversal higher. This is a last legg and likely we will see a reversal pattern later this week. CIT data shows a large number of fund shorts here which is fuel for a short covering rally when the reversal occurs. I am waiting on a setup lower to enter.
7-28 – When COT data shows an extreme reading often you will see a pop like we did last week and now a retest of the low. The pop is not an automatic reversal sign, it shows the fuel I mentioned last week with the funds being fuel for a short squeeze. A retest of the low is the next step in the reversal and needs to be proven for a reversal to be in place. Once a 50% back area is seen in the 11.70 area with support then we should see the rally continue higher into the $13 area. Watching for support this week and looking for an entry.
8-4 – Retest of the low is now taking place. We are three back and this a decent entry against 11.75. Looking for a long into $13 by the end of the month.
8-11 – Looks like the low is in as per my post last week. Expecting 50% back support and a short trip to $13. Buy the next pullback with a stop below the low.
Coffee
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.
7-14 – Coffee has been holding in what appears to be a wave 4 and a lower low is a clear buy. I like the next legg higher into the early August time frame and would like to see it retest the high. Weather and crop yield continue to be concerns in Brazil. The lower low completes the structure so watch for support on the 104 area.
7-21 – Coffee is still in the retracement pattern and I am still looking lower into 104 at a minimum for a setup long. I will wait on a lower low first. Volatility seen in recent weeks is weather related and there has been little damage due to frost. Demand is still solid so the supply side is in questions which should drive prices higher into 120s.
7-28 – Coffee made target and then some. No reversal pattern yet and once seen I like the long here. Against the lower trend line and also a gap just below in the $98s, we have reached a critical support area on Coffee. Looking for a reversal pattern this week and a break of the upper trend line.
8-4 Coffee now setting up for a long. The trend line is broken and the retest of the low in progress now. A break and conversion of $100 and we wil head higher into the next cycle high window 8-21. Consider a ratio call spread here 105/115.
8-11 – Looking for a retest here to complete the setup – 96 support and long against the low. The pullback should be seen sometime Monday. Next high window and 110 area the area to take profits.
Lean Hogs
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.
7-14 – All my previous comments still apply. I am looking for a long entry and likely will be looking at a Feb 2020 position as once the trade war resolved, I am expecting big volume to be purchased by China. For now, my cycles say lower and the structure says a bear flag is printing so I stand aside until I get the setup. No reason to put risk out here until a better setup presents. COT report does not show any clear signs of a setup either. Waiting patiently until the trade comes to me.
7-20 – Last week there was a pick up in orders from China to import port. The hog market in China is seeing price increases now which is driving more import buying. We have a meat theme here over the next few months with Lean Hogs higher into $95 by October and Live Cattle higher as well. Demand on both is solid. Looking for buy the Feb contract in the 78.50 area if seen. We are in buy the dips mode until the monthly pivot fails.
7-28 – Looking for support at 77.80 on Hogs. If seen, expecting continuation higher into the end of October. China Hog prices continue to get bid higher which means imports should continue. There is a meeting on July 30th in China about the tariff negotiations and if there is progress and the tariff reduced on Ag products, we should see Hogs pop higher as demand will increase.
8-4 – Trump’s tariff increase of 10% on the remaining Chinese goods impacted Lean Hogs as many discounted the demand from China as a result. While this may be true in the short term, the market in China will continue to bid up hog meat and that makes importing Hogs a viable tactic. We are oversold and very close to a reversal in Hogs. Watch for the reversal pattern later this week.
8-11 – Possible reversal here in Lean Hogs, the price of Hogs in the Chinese market continues to be bid and as long as that is happening it makes importing a viable tactic. Even with the trade war rhetoric which should continue the remand of this year, the Chinese will import hogs as the market pricing permits. I am expecting higher prices into $90
Live Cattle
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.
7-14 – Live Cattle completed a 5 up last week and I took profit off my last legg at 108. Our Trading Boot Camp class got a better entry and made over a 100% profit on margin on this trade. First legg to the upside complete, looking for a modest retrace and the next leg higher. At this point we have negative D on RSI, no reason to buy yet. Cattle weights have been coming in low, we have a good reason to be long. We are overbought for the time being, so planning another entry lower in the 106.70-107.20 area.
7-21 – Last week I placed an order long in February for Live Cattle at 115.50 with a stop at 114.00 I like the X wave just one legg lower. I will modify this order if needed on Monday but I’d like to see it execute there.Target is $120. I see a meat theme here over the next few months with Lean Hogs and Cattle.
7-28 – Waiting on the retest and will be evaluating if my order is now out of play this week. Looking for an RSI of around 40 and the small retracement structure may find support at the trend line. If seen, then I will need to re-evaluate my entry price. For now, giving this a few more days to see what price decides. I expect Cattle to continue higher into our cycle date.
8-4 – I have initiated a Live Cattle position in Feb 2020 at 115.50. Support at 115.20 and I expect it to hold. Stop at 114. Looking for the next legg higher into the 8-19 cycle window. The front month looks for support at 106.725.
8-11 – On Monday, I was stopped out of Live Cattle with the Yuan devaluation and concerns that there may be an impact on demand. In addition, this weekend a processing plant caught fire and there should be a negative impact on the tape tomorrow. Lower prices are a buying opportunity as I see fall prices for Cattle being much higher that they are now.
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.
7-14 – For the reasons I mentioned last week, Corn has rallied as expected. This does not mean we go straight up, there will volatility here especially with the weather in the coming week or two. We are topping out for now and overbought at this moment, so expecting a retrace this week and continuation higher in the coming months. The trade believes the USDA numbers are wrong so their August report will likely have better planted acreage numbers. Until then it is anyone’s guess where the numbers will come in. My estimation is that this will be in one of the top 5 tightest years on record and I want the long exposure in this swing. No modifications planned, just a hold into at least August and looking for a $5.00/bushel print. I may hold this into November. This trade will be volatile so watch for the crop conditions report to continue to come in poor and if we have a hot dry weather window the next 10 days, the planted crop will become stressed so expect more weather premium to get built in.
7-21 – Reversal as expected last week and we are close to the low window on 7-23. Likely we see another legg lower and Corn continues to be volatile due to all the data point at different plated acres which should resolve on August 12th with the next USDA report. I am expecting price to climb into that report ad the 410 area to hold as support. My hedge expires on Friday which I put on due to event risk and the volatility. I am planning to carry a hedge after Friday with futures. I will wait on the low and may take profit on the hedge if it occurs and place a futures order when needed.
7-28 – In the low window and we could still make the target of 410 in the next few days. A reversal is expected and the August 12th USDA report should contain adjusted acreage to reflect somewhere between 5-8M unplanted acres. This along with the poor conditions should see a significant bounce in Corn. I am still expecting a bid into the report and then upside into 4.75-5.00 a bushel. Last week my hedge expired and I added another hedge in the new front month in case of event risk. When the retrace is complete I plan to remove part of all of the hedge after the turn is confirmed.
8-4 Trump’s tariff increase hit the commodity sectors hard last week. Oil, Corn, Wheat, Soy, Natural Gas all lower based on demand concerns. Likely we see a recovery from these lows this week and specifically Corn I am expecting the August 12th report from the USDA to show a 5-8M acre shortage in planting. More importantly the silking of the current crop is late which leaves the back end of the season at risk due to possible frost damage. The USDA’s best guess is 8 days away and I am expecting some buying before the event. I an hedged and holding into the announcement.
8-11 – The USDA crop report is tomorrow and I am expecting volatility. I will be covering the 450 short calls and taking a small profit leaving the upside open for greater profit. If the numbers come in with a 5M acreage shortfall from last year, we see a rally. Anything less is cause for concern. China is now threatening to not purchase grain from the US, this would be difficult as the Army Worms are now invading their smaller corn farmers and there should be a shortage in their production this year. Overall I am expecting this year to be one of the tightest in the last seven. If the survey is wrong again, they can be a long liquidation tomorrow. I am staying hedged into the announcement.
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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.
11th Aug 2019
