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.
Uncertainties are ramping up and last week another 3M initial jobless claims, that means 25% of the US workforce is unemployed, let that sink in for a minute. The great depression was 29%. Last week retail sales numbers were much worse than expected. The US and China trade conflict is escalating and as we come out of lock down which means that there is greater risk of hot pockets of infections that may pop up. Private industry has not yet gotten a good handle on PPE for Corona and the Pharma sector has not made the progress required with a vaccine. I have advised subscribers as I did in February that we are entering a high risk period here in the next two weeks which means mind your portfolio risk. Risk occurs slowly then all at once so watch the S&P 500 in the next two weeks for a big down draft. Last week the announcement to close new trades in the front month on NG caused me to exit early on Friday morning for a small profit. Rumors about running out of storage are unfounded and I expect a reversal. Will be re-entering the trade this week. I like the S&P 500 short here and Bonds Long and Gold Long. Meats (hogs and cattle) should continue their rally after a pull back. Longer term swings in commodities like Sugar and Meats like Live Cattle and Hogs look good at these prices. Cotton is still the sleeper long which has reversed and should see more upside into $64. I am hunting entries in Sugar, the S&P and NG 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.
4-12 – Consolidation pattern, expecting it to break up this week into $11 and put in a inverted right shoulder, then rally. Looking for a high in August in the $15 area.
4-19 – A break of the resistance trend line and we see Sugar rally. This week in Brazil, unless emergency measures are put in place, the sugar mills there may be shut down for 2-3 weeks. We should see a pop higher on that announcement. Looking for 11.50 next and $15 by August.
4-26 – Price broke down last week invalidating the long setup. This week a lower low sets up positive divergence on RSI and likely we see a reversal. The key is the declining resistance trend line and a conversion will open up higher prices. Still looking for a August high around 15.
5-3 – Nice rally this week and a break of the declining resistance trend line. Likely we will see the trend line or monthly pivot this week. Look for a pull back to buy in the 10.20 area and higher highs expected into August.
5-10 – Sugar has retraced into out target area and I am looking for a reversal pattern and the next rally. Targeting $15 in October and $12 in August, a reversal is expected this week.
5-17 – Sugar has a break up from the flag we finished last week and the key now is to see continuation higher. This is a good spot to enter some out of the money calls at $15 in October.
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.
4-12 – Coffee did not hit the full retrace target. I am expecting the rally to continue into our high window April 15th or so, then look out below for a move to $100 – big supply and big crop coming.
4-19 – Looking for the pattern to complete and higher prices into 124-126. There is no short setup here. Looking for pattern completion first then lower prices into $100.
4-26 – No short setup and we had lower prices directly. Looking for a bounce here into $115 then lower lows into $95. A big crop this year and ample inventory should drive prices lower.
5-3 – So far so good on Coffee, it has found support at the trend line and about to retest 113-114 area before seeing lower lows into the $95 area. Poor demand and also big crop means lower prices.
5-10 – Coffee has hit our retrace target and looking for resistance and the next trip lower into $95. Big crop and demand issues should push prices lower.
5-17 – So fart so good on Coffee, lower is still the theme and big crop mean big supply so looking for lower lows into now EARLY JUNE. We may see a long setup here soon.
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.
4-12 – Nice reversal pattern here, the low needs to hold and looking for the next legg higher into $100. Get through monthly pivot and we have a confirmed reversal and higher into 115s expected later this year.
4-19 – So far so good on Live Cattle… There is a lot of volatility expected in the coming weeks from plant closures. When they restart, look for higher prices. Looking for $100 price target into May. $94 is resistance first pass then look for weekly pivot support and higher prices.
4-26 – A triangle is forming which should resolve to the upside on live cattle. While a few plants are closing due to COVID, chances are that we will see the market continue sideways and then rally. While the virus is moderating, beef prices should go higher as a result of these same plants re-opening. Sideways price action expected this week then a break our higher into 100 into June.
5-3 – The compression with the triangle has broken up and is retesting and I am looking for a rally next into the June time window. As plants come back to work this instrument should rally into $100.
5-10 – Target made at $100 and chances are we will pull back and consolidate before seeing next window into 110. As plants come back on line we should see cattle prices continue to go higher. Watch for support at $90.
5-17 – Retest not yet complete, so waiting on Wave C lower. Looking for the next legg higher once complete this week. Next target is 105.
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.
4-12 – Consolidation across the board last week, still looking for the rally and Soy has the highest odds of a big move as a result of China purchases, Wheat is also a strong rally candidate. Looking for higher into the end of this month.
4-19 – No joy with grains yet, still expecting a rally into early May and maintaining my call long. Soy is at a critical support test and should rally this week. Corn has wet weather and should also rally. Wheat is already in a turn and should continue higher.
4-26 – Last week in grains all three charts have the same pattern, a symmetrical bull flag that should break up. Looking for a rally this week across grains and looking for a May high. Wheat and Soy should be the best possibilities.
5-3 – Soy has broken up and Corn and Wheat are close behind. Looking for confirmations of a trend change this week across all three. Soy is a step ahead and likely will see full target for this trade by the end of this month.
5-10 – The key word for this week in the grain markets is continuation. Need to see the bulls continue to press higher, especially in Wheat. Corn is setup well here and COT commercials are long so looking for Corn to rally this week.
5-17 – The USDA report has created a mixed market – ZW lower lows expected. ZS – a weather rally is brewing. And the report was quite bullish for Corn. Still looking for rallies for Corn and Soy but overall expecting them to be short lived and just trades.
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.
4-12 – Gold rallied on the Fed news last week and has just finished a 5 wave sequence higher. Watch for a retest into 1650 and then the next legg higher. Gold should continue to rally into the end of this year.
4-19 – Gold has made the first legg lower into 1700 and I am looking for resistance at 1724 then lower lows. If we convert 24 we can see a direct move higher. A lot depends on equities, if we see equities lower strongly we can convert 24s and see a rally direct.
4-26 – Gold rallied last week into wave B and should see wave C lower this week as it appears we have a 5-3-5 pattern. The pattern needs the last 5 down to complete. The theme we have been disusing for the last few weeks is USD higher, Bonds higher, Gold higher and Emini lower. This theme should continue and I like Gold long over all through February. Looking for a pullback this week and looking to buy.
5-3 – Gold is still in the retracement pattern and is now in wave C, likely lower lows into 1655-1660 and this week I will be looking for a reversal patter. The lean here is long into the February 2021 window. Don’t be in a hurry here, wait for the confirmation on the long.
5-10 – Gold is correcting in time so the 1655 target is invalidated. We are in wave E and a likely break up from the triangle to end the first wave W. Looking for $1800 as target into the May high window.
5-17 – Gold has broken out of the triangle and is likely headed for the higher high and completion of wave W. There is a decent retest setting up that will revisit the triangle before we see a much larger move higher. Higher highs should be seen this week.
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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.
*** 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.