The Weekly Call – Trade Setups for the Week of January 19th

The Weekly Call provides perspective on high-quality setups and trading strategies focused in the Commodity world.. My current performance shows a 412% 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.

The Soybean market now has a number of positive trends going for it. Positive demand fundamentals with the phase 1 deal with China along with the US, Mexico and Canada deal. Any weather issues in South America and expect a squeeze. Looking for
$1000 in this market in the next month or so. Soybean Oil should also benefit after we see a lower low and a setup long. Buy May Soybeans with an objective of $1000. Our Gold trade is fairing well so far and is well in profit. More upside is expected into 1570. I may be adjusting the trade by removing the 1545 short puts to move the4 delta of the position back to near zero – we are currently long 50 delta, 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 subscriber Q&A HERE.

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Sugar

 

9-8 – We are still in the 5% area of all time short interest and now have a bullish overthrow on Sugar. I am expecting a squeeze into $12.00 into the end of this month. Commodities in general are not catching a bid due to the trade war dynamics either due to direct tariff influence or indirect. We should see upside this wee begin in Sugar. Convert the red trend line and we have started a move.

9-15 – Sugar getting off the ground here, no reversal pattern yet but this week looking for a retest of the low and a conversion of the weekly pivot. This seen, we can rally into $14 by November. Mega short interest here sets up a possible find squeeze.

9-22 – Sugar now has a nice reversal pattern. Funds are near record short levels which creates a possible short squeeze situation. Expecting a rally from there into the next high window and continuation higher into November.

9-29 – Sugar has made the target area and needs a small wave 5 higher to set up negative D on RSI. Once seen a retest is coming before we see higher prices into November. Expecting the retest t last into the middle of October.

10-6 – Sugar we have seen the small wave five as discussed last week, we are in the retrace which should past a few more days int 12.20-30. I am still expecting a rally into $14 once the retrace completes.

10-13 – Retest in Sugar looks complete. This year we should see a production shortfall which is the first in many years. Looking for a squeeze higher into November and $14.00 next.

10-20 – Retest made a marginal lower low, the forecast is still the same, looking for $14.00 next and expecting a reversal this week.

10-27 – Sugar has reversed as discussed. We had a 5 day rally in the Brazilian Real which has helped Sugar. We have a daily stochastics buy signal and an increase in open interest which are showing the start of the next trend up. $14 is the next target.

11-3 – This week I am expecting a rally and a conversion of the monthly pivot into support. A stronger Brazilian Real will continue to support Sugar prices and with short falls in production in Asia, look for the rally to continue into $14.

11-10 – Approaching the trend line and likely see a pop in price higher. The rally should continue to the upper flag trend line. If you are long I advise you should have taken at least 1/3 in profit before the trend line and stop should be at even.

11-17 – So far so good, and a conversion of the trend line is in progress. Trend up into 13.26 and possible higher into the upper channel trend line. End of month high window is a timing guideline for the next high.

11-24 – Sugar has broken above the declining resistance trend line and is likely to see higher highs into the end of the month. Looking for 13.30-50 as target. Long term I am expecting the rally to last into February 2020.

12-1 – Sugar so far so good, 12-4 the next high cycle and looking for a high this week. Target 13.30 and then retest into monthly pivot and higher into February expected.

12-8 – Sugar has made target, well almost and very close. Looking for minor higher high and the end of this three wave sequence. Watching for support at the monthly pivot next, looking for a reversal pattern this week.

12-15 – Sugar has now made target and then some. Negative D setup and likely we see lower into the 12.70-80 area into early January. So far so good, looking for a reversal this week.

12-22 – Sugar is putting in a B wave here – looking for wave C lower into the $13.00 area and it can still male the 12.80 trend line area. Looks like next year there is a big reduction in production from India which can help push prices higher. This is a buyable pullback with the next cycle high in February.

12-29 – No change to forecast, still expecting a low window and a pull back in January and then a new high in February. Steady as she goes.

1-5 – Almost in the target area, still expecting to see $14 before the cycle date. The monthly S1 should hold as support.

1-12 – Target made on Sugar, retest is now expected this week back into $13.50 then higher into $15 by the March 24th window. Small bearish overthrow here of the channel.

1-19 – Target exceeded in Sugar and  the turn is now in. Looking for a support test at broken trend line resistance then higher into $15.00 into the 2-24 window.

 

 

Coffee

 

9-8 – The larger three up is playing out as expected and 99-100 should be seen this week. A retest of the low and possibly a lower low can still happen. The double bottom will support a rally once seen. Day trade the long into Wednesday and look for a reversal.

9-15 – Coffee reversing and a retest is in order. Two supports to watch – 98 and a full retest of the low. The Real is critical to this advance, watch for the USD to fall which will help this rally. Retest is next.

9-22 – Coffee reaching the retest area as discussed. Key here is a reversal in the next few days. Break the trend line and we have a full low retest coming. The next high window in my cycle method is the end of October, we should begin that move sometime this week.

9-29 – Coffee did not break the trend line, found support and rallied last week. Watch for support at 99.50 and higher prices into the 10-20 window next.

10-6 – We are at a critical junction on Coffee as we are approaching the support trend line. I am still expecting 106 and key support at the trend line needs to hold. Looking for a rally starting on Monday/Tuesday.

10-13 – Coffee has broken key support and with the news from Brazil with exceptionally high flowering, chances are we have a bumper crop year. The Real is not fairing well against the dollar and likely we see lower lows into $90. I will be looking for a reversal pattern once we get into the target area. Coffee is at multi-year lows.

10-20 – No change from last week, we are printing a flag which is likely a wave 4 and expecting a wave 5 lower to $90. This will be a strong setup when seen. Hunting a long position for a trade higher into 99.

10-27 – The flag has converted into a 5 up which is the first legg higher in KC. We finished a wave 5 last week and I am expected a retest into $96 or so for a long entry. Expecting higher prices into the next high window into early December. The Brazilian Real rally has helped prices here too. Find support at $96 and we look for $112 next.

11-3 – Coffee is in a squeeze as funds were caught short and we did retest but only made it to 96.97. We are extended on RSI so look this week for another re-test to the monthly pivot then higher into the 12-6 window. There is a significant trend line on a weekly basis that is about to convert if we see the high window as planned into December. This could signal a significant trend change in Coffee. More on this next week.

11-10 – Coffee and other commodities have been in a 20 year cycle lower and the weekly trend line that has been the definition of the last legg down in the 20 year cycle is now being tested. Likely we see a move lower into the 102 area first then a push higher. This past week has been a further squeeze, breaking negative D on RSI multiple times. The pullback is a chance to reposition long for the early December high window.

11-17 – Coffee retrace is incomplete and expecting a lower low. On the daily chart we are converting the longer term weekly trend line and likely will see higher into 116s next as the first 5 up. Watch 106 for support this week.

11-24 – Coffee 106 was made and a big rally with continuation expected into the first week of December in a 5th wave likely. We are printing a flag now which is likely a triangle or it may morph into a three back. Once complete looking at the next pullback into the 108 area.

12-1 – Coffee finishing the 5th wave now, marginal higher highs expected and a reversal into the middle of December or Wave X. This is a clear break of the weekly declining trend line resistance and further upside is expected after the pull back into 108-110.

12-8 – Coffee may have reversed and is in the retracement. Looking for a larger 50% back type move as we have negative D on RSI and the completion of a 5 wave sequence. Looking for a break of the support trend line and 110 area.

12-15 – Coffee reversal is in and lower prices as expected, likely wave A is done and watch for a small retrace and lower into the golden ratio zone as marked on the chart. We are still in an inverted market and likely more premium will come out of the front month.

12-22 – More premium has come out of the front month and the exhale in Coffee is almost complete. The wave 4 here of an expanded flat is almost complete, it needs a lower low to finish the pattern. I am looking for 124.50 as target.

12-29 – The low may be in and the exhale complete. Coffee needs to hold 127 on a pullback and should then rally into the new year to new highs. Looking for new highs into the next cycle window of 1-20.

1-5 – The low at 125 must hold or we open 118 next as a larger three down. Once we convert the weekly pivot we should see next rally into the next cycle high window. Coffee at a critical juncture here in the next few days.

1-12 – The 125 level broke and we have made target at 118 and are now reversing. Watch for a conversion of the declining resistance trend line and higher prices into the 20th of January. The next legg higher should begin this week.

1-19 – The reversal that was taking shape last week failed to deliver so this week still looking for an initial sign of life from the bulls. The key is converting the declining resistance trend line around 117.25. Once seen we should see a larger rally into the end of this month.

Live Cattle

 

9-1 – Like this setup here with Live Cattle which has been beat up badly from the processing plant fire. LE is are retesting trend line support with not much risk from the low. Bulls need to take the tape on Tuesday and perform. Stops below the low, looking for a rally here this week.

9-8 – Poor performance by the bulls Friday and a break of support. The setup for the long failed as setups sometimes do. Waiting on the next setup and higher low. Likely we see lower first to set up the next positive D on RSI. Cattle is near 2016 lows here and I am not expecting mush demand destruction and a supply shortage this year. A February play long is a good idea here using a simple call spread.

9-15 – Nice move off the bottom and a possible wave A in place. Looking for a B wave then C higher into 110. Find resistance in the gap and we head lower. Looking into the end of this month for the rally high. Cycles have shifted lower into January.

9-22 – Wave C in progress here and likely we see continuation higher this week into 110s. Once seen Cattle will be making a decision in the gap. Cycles are pointing lower at this point, i will be expecting a reversal in this market in the first week of October.

9-28 Target made on Cattle. We may see a smallish wave 4 and then 5 higher to set up neg D on RSI. I am expecting a full retest of the low after a reversal pattern. We are at the previous limit down area, likely we will see resistance this week and a reversal pattern.

10-6 – No change on the Cattle Forecast, retest required, 106 the target area and of we convert 106 then we open a full retest of the low. If we find support we can see the next legg up as the alternate. Next step is lower at 106.22.

10-13 – No change in forecast, price needs a retest into 106 as mentioned, neg D in place and once the retest is seen then a decision as to trend direction. Find support at 106.22 and we see a rally into February 2020 and 120s in Cattle.

10-20 – Reversal in progress into new cycle date of 11-4 and the 107 price target. I am looking for a long setup when seen. The structure is 5 up and likely the 50% back area is next then 122s.

10-27 – The reversal failed and we have a higher high in 5 waves. Looking for the next decline to confirm below the trend line which will target the 11-16 time frame and the 50% back into the108 area. Still expecting a February price target of $120.

11-3 – There is a LARGE premium to the cash market here as futures are inverted. We so have feed lots trying to boost weights in this environment to boost production weights. Tighter beef supply and strong customer demand are driving the rally. We have done the small wave 4 and 5 and have divergence, so expecting this market to turn this week and break the support trend line. USDA outlook for Q1 is fairly neutral. Watch for month pivot as first target and a pull back into the middle of November.

11-10 – As mentioned last week, the retest has begun and we should pick up some steam lower into the monthly pivot. Looking for a low in the 11-16 window and then continuation higher into 122s.

11-17 – The retest is still in progress and looking for monthly pivot next. Wave C missing, likely we see the move this week. The trend is up and looking for 122s next.

11-24 – Cattle still coming off, big premiums and likely we see a wave c into 121-122 or so before the next major rally higher. No setup long here yet, be patient as we can still see monthly pivot next.

12-1 – On the wrong side of this market as we have broken the flag to the upside and likely will see 128-129 before reversing lower into 121-122. The same idea applies, wave X needs to break the support trend line and then higher higher into 130s expected.

12-8 – The reversal we have been looking for is finally happening. Trend line break and now retesting that trend line. Likely path is lower directly into the 120-122 area. This is a retracement wave so expecting to see 7 swings lower.

12-15 – Looks like a Wave B and likely pulled higher as a result of the tariff news, even though cattle is not a prime market for the Chinese. Likely we see a lower low from here into the 120-122 area next.

12-22 – Still waiting patiently for the pull back into the January low window on Live Cattle. We could still see a retest of the high before turning. Would like to see RSI relax into the 30 area to build support for the next big move higher.

12-29 – Just like Sugar, waiting on the buying opportunity. RSI needs a rest and a reset to allow for the next rally of Cattle into the June window and $140. We still need a decent pull back to buy in the 122 area.

1-5 – Cattle still has lower to go into the next cycle window of 1-15. Ideal price target is 120-122, price need tp make progress this week. Looking for the next rally after the low is made into 140s.

1-12 – No joy on Cattle, still a sideways market and still expecting a wave C lower. We could be building a triangle here which would correct is time instead of price. Lean for now is higher with retest expected into 123s.

1-19 – I had to shift the cycle date one cycle into the future as live cattle has been reluctant to decline. Sideways price action pushed cycles out in time so the new date is now 1-26. The retracement is week underway and still expecting a test in the 123s.

 

Corn

 

9-1 – Corn has priced into it weak demand and high yields. Chances are that at least one of these is wrong. 60 minute buy signals are fixed, looking for 380s and a pull back before we see a larger rally. Stops below the low, corn long here this week. Convert monthly pivot and we have a confirmed reversal.

9-8 – No reversal yet on Corn, we are probing the low and all the statements I made about yield and demand are already priced in. Anything shifts, expect a rally. this week we should see a reversal pattern and a break of the red trend line. If we break the red trend line, we have a reversal in Corn. USDA crop report is this week.

9-15 – Reversal in progress and a retest of the low this week. Find support and we should rally higher into mid October. By then the question on yield and this year’s crop production should be clarified. So should the current ethanol demand issues with China. Looking for a resolution on Corn here in the next two weeks. Lean long on the retest that finds support.

9-22 – Managed fund traders have a very large short position here on Corn and traders continue to see smaller harvested area and lower yields due to ear weights. The previous USDA report raised yields and the expectation was to produce as much Corn this year as last year. By the middle of October, yields should drop and if there is any progress with China on a trade deal, we could see a rally.

9-29 – We are approaching a retest in Corn this week and the first five up is almost complete. Watching for support at 368 and higher prices into the end of October. As mentioned, yields should continue to drop and prices should climb.

10-6 – Retest is on on Corn, not much farther to go, looking for 76-80 then higher into 410. There is a good spot to take some profit. This week is the trade war talks, looks like is not getting off to a good start as the Chinese have said to to industrial concessions. Watch out for the head line minefield this week.

10-13 – Headline Minefield last week played out with additional volatility. Corn slumped due to USDA report which raised the already high yields for the year. Planted acreage is at a multi-year low and ear size is small due to the late plantings this year and now we have frost damage expected in the Dakotas this week. The yield numbers by the end of the crop year should adjust lower. The China tariff phase 1 agreement is a tail wind. Watch for higher into 410 this week then a retest of 385 before we see the next major rally into the end of the year and 450.

10-20 – Corn is in a retest and expecting 410 once complete. Retest target 385, support expected then next legg up should begin into 450 into November. Frost and small ear sizes going to shrink yields.

10-27 – The October freeze damage was enough to push yields down to 165 bushels per acre. As of the last Crop Report, maturity was at 85% which is behind the average of 97%. Michigan 62% mature, North Dakota 65%, South Dakota 74% and Wisconsin 61%. Some prime growing area will see their season end before full maturity. If we get a China Trade deal, expect the wide difference between US and China Corn to close rapidly. Managed money traders were net long last week. Technically we have seen the retest as expected, the next rally requires a break of $391 and open $410 next. Looking for a December price in Corn of $450.

11-3 – This week on Friday crop reports and WASDE at 12pm on Friday will create volatility. With the cold weather and freezing conditions in the mid-west and the late crop harvest as mentioned last week, yields will be impacted. Funds have been accumulating over the past few weeks and any trade deal with China will have a big impact here. Not expecting much price action until Friday but I am expecting a rally into the end of this month. Producers are focused now on harvesting Soy in the cold weather first, Corn is secondary.

11-10 – USDA reports created some volatility Friday but the net net is supply and yields are falling and consumption is out pacing production. So anything that increases ethanol demand (which is weak right now) like a China Tariff deal, will press this market much higher. Consumption outweighing production is not large so there is a bullish bias here, which needs more of a push with an ethanol deal with China. I am still leaning long here and looking for the flag break up this week.

11-17 – Corn moves lower this week and the funds are very short here and we are at the bottom of a flag. Support at 371 and 366. I have added a new Corn trade this week as I believe we are near a low, a ratio spread using Feb Calls the 2X4 ratio spread long 2 385s and short 4 410s – 69 DTE. This trade was put on for next to zero and should expire next to zero if we continue lower. No risk to the downside.

11-24 – Not much progress yet on our Corn trade, we have a few good signs. Positive D in place and an inverted head and shoulders, looking for a test of 387 or so and if it breaks up we have a trend change. Look for the rally to last into early January. Any deal signed by China and the US, even if it is a limited deal should generate a relief rally in Grains.

12-1 – Small pop last week and looking for the middle band to convert into support. Higher prices expected into the middle of December and a conversion of monthly pivot is a confirmation to the upside. Don’t forget about the Phase 1 China tariff deal that if signed could have an impact on agricultural commodities.

12-8 & 12-15 – China tariff phase 1 deal should stop fund managers from shorting this commodity and any whisper of the Chinese using US corn for ethanol and we should see a big rally. Expecting 390 next as a 5th wave then a retest of the low and then a rally into February. Keep in mind all the previous comments about yields, etc, we have a short supply this year which means if demand picks up we see a move higher.

12-22 & 12-29 – Corn has finished the first small 5 up and is in a retracement into 380 or so. We have near perfect conditions for a rally as an increase in demand from China will help the bulls. More important than China are the USDA numbers in January and their production estimate. If it it is lowered and with the funds overly short here, we could see a pop higher / squeeze into February.

1-5 – Corn is finishing the pull back into 383-380 and I am looking for the next rally higher into 425. USDA report this week which will move the grain markets. If revisions are made to production we could see a short squeeze.

1-12 – The USDA report last week lowered global production of Corn about 8%, and we have a lot of funds still short. I am expecting a rally here into February and should start to see it this week. The low Friday needs to hold, target is 4.25 per bushel.

1-19 – Follow through is key this week as the Corn market is waiting to see actual orders from the Chinese to begin to fill in the $20B promise they have made in purchases from the US in Phase 1. The market is acting as if they don’t believe that the Chinese will follow through. Funds are still short and looking for a squeeze higher into 425 or so into February.

 

Gold

11-17 – I decided to enter Gold on Friday as the overall trend is up and we are still expecting a legg lower as the retrace is incomplete. So I bought at a February ratio spread 1 X 2 1480/1500 for a decent credit which provides coverage into 1510 and also has a negative delta of -27. This means as gold falls this position in the short term will grow in value. I have the option of exiting with a small profit on a lower low if seen or if we break higher, I will manage any risk above 1510 using futures or exit the position. Likely we see a lower low and in case we get a break higher, I have a starter position in metals.

11-24 – The Gold trade is doing well, and with the slight negative delta we have a small profit. A stronger move lower and we will take some profit and may reposition the trade. For now, we are a hold as lower prices are expected.

12-1 – A small pop higher and a likely flat with resistance at 1480. Lower prices here would open a lower low and a strong long setup. Looking for a low window towards the middle of December.

12-8 -Silver is ahead of Gold here as the lower low and positive D is already in place. I am expecting Gold to follow in the steps of silver and make the lower low between now and December 18th. Current position is in profit and am holding.

12-15 – Gold will likely have one more push lower on the next retest higher in the USD. Look for 1450 as support which would be a double bottom retest. My sense is that we see a reversal this week in Gold.

12-22 – Still looking for the reversal in Gold and we may see 1495 first before seeing the lower low. Given the retracement pattern which is a flag, we should see a break of the lower trend line and then the advance. I am wrong above 1500 which is not expected at this point. Our short calls are well in profit and I am planning a modification to the position to take some profits on the short calls and swing our Delta long. The lower low here is key to the reversal.

12-29 – The flaggy retracement pattern has broken up and I have made an adjustment to Gold adding a 520/570 1X2 call ratio spread in March. This will hedge the position until we see a pullback. I chose this spread as I could put it on for almost no money and it extends the profit range of the position up to 1620. On a pullback I plan to make another adjustment to the position.

1-5 – Last week on a pull back I took off one of the short 1500 Feb calls and sold a put at 1520 in March to flip my delta long on the position. With the Drone attacks last week, I exited the Feb 1480/1500 call spread on Friday as it had achieve max profit and also took profits on the short put. I now hold the 1520/1570 ratio spread in March. Gold is overbought and a retrace is needed into 1530 or so before we see the next rally into 1620.

1-12 – Key resistance is at 1570 – if it holds we can potentially open 1525 as support for wave C. Expecting continuation higher into 1625. Watching this week for the 70 test and a China deal sign off on Wednesday. There may be last minute fire works, so stay tuned. Last week I adjusted the position with long delta by adding a – 1 March 1545 Put and +1 March 1620 call as a risk reversal. Looking to take profits on the 1545 short put later this week.

1-19 – No change from last week, 1570 key resistance and the three up we are working on now  should complete around there. The support trend line should be tested after the 1570 area, from there if support we open 1600s, if not we see 1525. The decision should be made this week.

 

 

 

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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 futures 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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