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. 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 is the first Sunday open with a pop higher in the S&P 500 and rally. News of many countries cresting in Corona Virus infections and some are actually declining. Last week’s jobless claims were 6.6 million which is a new record and we are headed for a recession and likely inflation once we see demand pick back up. Gold is a commodity to consider as a longer term hold in your portfolio given the market conditions. The lower low this week in gold, if seen, is a spot to buy. Oil is a news based reaction, demand has not picked up so watch for most of that rally to be given back. I am long Natural Gas with a June 1.80/2.10 1X2 ratio spread. I am hunting an entry in Sugar and Oil 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.
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3-22 – Initiating coverage of Sugar this week. Looking long with a buy on any long setup. This is very beat up and oversold and a rally into the July time frame of around $15 is likely. We will bottom in the next two weeks, watch for a reversal pattern by Friday.
3-28 – Nice break of the trend line and a higher low here into my cycle date gets me long into the $15 target area into July. Waiting on a pull back this week and a demonstration of support for a long.
4-5 – As mentioned above, the higher low is in and this is a decent setup. Stop below the low and let’s see how this progresses this week. Convert the weekly pivot and we have a reversal.
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.
1-26 – The reversal has still not happened, looking for a break above 118 or so to confirm a rally. If we see the S1 as resistance we can open a lower low into the March low window. Bulls need to show up this week and put in a reversal pattern. Positive D is in place.
2-2 – Low window is in the first week of March and given the performance of Coffee, we are about to reverse and possibly retest the low in March. We are at a critical support area at 100 which is the long term weekly trend line which we broke weeks ago. We are now retesting and this area must hold or we open 95. Monthly pivot is resistance until proven otherwise and watch for a retest of the low once seen.
2-9 – Basing here and a reversal is expected here. The Real has been near all time lows which has impacted Coffee. Look for a reversal this week and a test of 110 and then a retest of the low into March 9th. I am expecting a bullish run after the next low.
2-16 – Target made at 110s and can see a bit higher to set up negative D. Look for a low retest here in the next few weeks. Take profits for now and let’s wait on the next long setup.
2-23 – Coffee in the reversal and looking for three swings lower to retest the low into March 6th. So far so good, bears need to show up Monday.
3-1 – No change in forecast, still looking for the retest lower in order to build energy for the next advance.
3-8 – Coffee to test 105s this week and if support is found, we can start he next legg up. There is no reversal pattern here yet and the new crop looks to be big. There is a lot of supply right now and currency fluctuation are the main reason for the big changes in price. With the Saudi’s changing the value of oil, the Brazilian Real is likely to drop and so is Coffee. You don’t want to be long below 105.
3-15 – Coffee being pushed around by the currency markets and likely we see $100 first before the next rally into 130. Look for the weekly/monthly pivots to be resistance this week.
3-22 – Coffee rally last week and with the current over supply in Coffee watch for this to retrace into 105s this week before moving higher. Coffee is being moved around a lot by the currency markets so look for a strong retracement this week.
3-29 – Coffee is coming off and looking into the 105-108 area for this retracement to find support. A big crop, lots of supply should push this lower. We may rally again into April 15th but this is just temporary as I am expecting a lower move in Coffee after mid-April.
4-5 – Coffee still finishing the retracement as discussed and looking for 110-108, slightly higher then the next rally. I have serious doubts about the rally due to the large crop this year and steady supply. After April 15, Coffee should be a good sell. For now looking lower to the next long setup.
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.
1-26 – A lower low and likely a turn will occur. Needs to see a small 5th wave lower to set up positive D. Once seen, the next step up is 135s. Wait for a reversal pattern and a positive D setup.
2-2 – Live Cattle is about to reverse after seeing a marginal lower low, which will set up positive D. Looking for a confirmation this week of a reversal and higher prices into March of roughly 134.
2-9 – So the lower low and positive D on RSI is in place, a reversal pattern is next, then the rally into 135. Let’s see if it plays out that way this week. Wait for the reversal pattern to buy.
2-16 – Nice break up as expected, looking for the reversal pattern and a setup to buy, watch for a retest of broken trend line resistance. Lean is higher into 135.
2-23 – Retest of the low and a possible double bottom setup coming. Watch for a reversal this week and a conversion of Monthly pivot.
3-1 – Low retest and lower has played out and Live Cattle being hit with demand concerns. A marginal lower low provides the next long setup. Once seen a conversion of monthly pivot is needed to see higher prices into the end of the month. Larger double bottom is bullish.
3-8 – A positive D setup is coming in Cattle and a lower low is likely. Demand is soft and we should see a reversal later this week.With the virus news, be cautious with an entry, wait for the setup and confirmation for the next Long.
3-15 – Positive D setup and looking for a rally this week. This is very over sold and is reactive to possible recession and the Virus news. Looking for a conversion of weekly pivot and higher into the end of the month.
3-22 – Limit up move last week in Cattle and a likely reversal is in progress. I am expecting a rally into the 110 area by the first week of May. Expecting more moovement this week to the upside.
3-29 – I consider this one of the Shelter in Place commodities that should see upside in the Corona Virus period. Limit up last week and a big pull back into the gap here, likely we see the rally continue if the low holds.
4-5 – The low did not hold and we now have another opportunity as we have made the 100% fib for the last three down move. Watch for a conversion of the weekly pivot. Cattle prices are out of whack here with the cash prices, should see this resolve this week.
GRAINS – Wheat, Soy and Corn
3-22 – With bread quickly emptying off grocery store shelves, short term demand for wheat should remain strong. So far we have seen the first legg higher in Wheat, looking for a retrace into 520 and higher into target in April and higher into early May. Soybeans should see a tradable rally into early May after a pull back this week. Watch for support around 843 and a rally into 926. China Soybean stocks have fallen to the lowest levels since 2010, so expect big orders as their economy picks back up. Large orders of Corn, approx 756,000 tonnes were sold to China last week, we should see a short term rally into Early April. The Corn rally is the least predictable and Wheat is likely the most reliable.
3-29 – On the Grain rally, continuation higher expected across the board. ZW and ZS being most reliable and looking for higher prices into April. ZW should benefit the most. ZS will continue higher as long as China continues to buy the commodity.
4-5 – The grain rally I expect to continue with Wheat and Soy and possibly Corn. Retracement patterns are now complete and I am expecting upside this week. Should see the rally continue into the end of April.
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.
1-26 – The support trend line this week is roughly 1560 and it must hold. Additional volatility is expected as we head into FOMC Wednesday and the Flu outbreak in China is spreading around the globe which will impact the markets. Our position is long Delta and is in profit. I may take profit on the short 1545 puts before the FOMC meeting.
2-2 – Our Gold position is well in profit and looking for a pull back this week as we have a negative D setup and a pull back to retest the trend line expected. The Virus has supported the rally and with China back from New Year I am expecting an increase in volatility this week. Watch for support no lower than monthly pivot this week.
2-9 – Last week I took profit on the May 1545 short puts as we have risk to 1520. I may sell them again on lower prices. The position is in good shape and we have another $3k in profit from time decay possible with 18 days to go. I am looking for a retest lower into 1550 then the next rally. There is risk to 1520 which is possible but given the Corona Virus, any measure to contain the virus that are perceived to not be working will support a rally in Gold.
2-16 – A sideways formation in gold and a possible triangle forming. Looking for resistance between here and 92 and if seen expected a retest of the lower part of the range. The overall lean is gold is higher and a trip to as low as 1545 is still possible. Watch for the triangle support trend line as support.
2-23 – And a break up our of the triangle and with the Corona Virus news, likely we see a pull back and a higher high into 1660-70 as divergence has broken and we are likely printing a wave 3 here. Last week I closed the 1520/1570 ratio spread for a profit and also close prematurely the 1620 calls as we were getting close to expiration. Once we top out I am looking for a serious pullback into July. For now the lean is still higher.
3-1 – Target achieved and a rejection so far. Is this the top of Wave Y? Maybe. We need to see price action this week convert the monthly pivot and if seen, then new highs are possible. If by 3-13 we see resistance at the monthly pivot we can see gold go much lower into 1520. Gold has a seasonal low in early July.
3-8 – Finishing Blue Wave Y here with a higher high this week. We have a seasonal trend that starts to play out lower into July. Given the volatility in the markets I am not expecting much right now. Higher highs still likely into 1720-25. I will be watching for a reversal pattern later this week/next week.
3-15 – Big move by the Fed on Sunday and a huge rally in the USD and big fall off in Gold. Look for gold to continue lower into 1420 after a retest into 1560.
3-22 – Gold should continue lower once the retrace into 1560 completed. I am still expecting 1420 as support. I still am expecting higher highs into December this year. Inflation will become more evident later this year and will be with us for some time to come given the latest move by the Fed. Look to buy a lower low.
3-29 – Low liquidity and a Goldman Saks recommendation last week and we got a big one day move in Gold last week. The key here is we can see 1600 as support and higher directly. The post Corona era should be one of recession and inflation and Gold should be in your portfolio. We have lower coming according to my cycle system through 4-6 so this week watch for lower prices. We could see a break of 1600 and a retest of the low which is still possible.
4-5 – Gold made the 1600 area and is in a retracement now. GC is likely going to see a wave C lower into the monthly pivot at least and best case into 1500. This is likely to be short lived and I am hunting a long when lower prices are seen.
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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.
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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.