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

The Weekly Call provides perspective on high-quality setups and trading strategies focused in the Commodity world. My current performance shows a 468% 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.

Infection rates declining, US stimulus package on the horizon and about to be passed, at all time highs in stocks and indexes; economic and market optimism looks to be strong currently and there are some headwinds for commodities with the recent strength in the USD and rising Treasury yields. Commodity markets that are significantly undervalued include Wheat, Coaco, and Coffee.  Overvalued markets include Natural Gas, Corn, and Crude Oil.  While these are short term trends, with the stimulus that is about to be passed, more USD devaluation should follow and the genral trend this year in commodities should continue to be higher.  Grains were overbought and the pull back as forecasted is working so far, there is more to go. I am still bullish  Metals, specifically Platinum, Copper, Silver, Gold. Softs look for Coffee and Cocoa to benefit the most during the recovery this year.   The acceleration of Bonds and the US dollar in their respective downtrends should shift the Fed’s overall prospective on interest rates later this year.

Current positions, last week I have taken more profit on the NG position and have converted the position into a Butterfly that has a zero cost basis.  So far a 45% profit on margin. I missed the opportunity to add size last week and may have another opportunity this week with target now at 3.20.  See the Track Record below under Completed Trades for information on that trade. All trades are posted on our Private Twitter Feed for subscribers and are in the track record which is posted below under Completed Trades below. I have modified the track record to reflect 9 lot trades using the information in this Blog assuming $25,000 per lot as the current portfolio is over $225,000.  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.

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

 

Sugar

 

9-13 – Trend line break a clear sign that W is in and now a reversal pattern. Still expecting a rally into $15 and this week we have a setup. We could see a marginal lower low for a stronger setup also. Either way I like Sugar long here.

9-20 – Looks like a break up in Sugar, looking for the $15 target as discussed. Sugar has a lot of ground to cover by the 5th of October, looking for a higher high by then and a negative divergence setup on RSI.

9-26 – Sugar may see a small retest this week and then an expansion higher. A lot depends on the USD here and the dollar is at an inflection point and should turn lower. I am expecting 14.50-15.00 in Sugar in early October, the bull need to perform here. Support trend line must hold.

10-3 – Sugar should continue to rally into the 10-19 window. Still expecting 14.50-15.00 as target. Support trend line must hold and again looking for USD to continue lower which will help commodities.

10-10 – The Sugar rally is coming close to completion. We still have another week of higher prices and I expect to see a negative D setup in the 14.50-15.00 area. As long as the USD continues to be devalued we should continue to see Sugar rally after a retest post October 19th.

10-18 – Great call on Sugar and we should see the new high this week and a strong reversal. Don’t wait around long after the higher high. Trim your position down to just a trailer.

10-25 – Reversal is unconfirmed but looks to be playing out. Watch for a trend line break this week and lower prices. Sugar should reach $13 as target on the pull back. Neg D on RSI is in place.

11-1 – First legg lower appears complete. Looking for a 5-3-5 structure and lower prices to 13.50. USD in a correction also and once it finishes we should see Sugar rally.

11-8 – A large B wave has played out last week and ow I am expecting a 5 down structure into 13.5ish. Watch for the monthly pivot to break to confirm lower lows.

11-15 – Still looking lower and a 5 down for a wave C is expected into Mid-December. Target for the move is still 13.50 and I am waiting patiently. Consolidation can be a triangle but at this point I still see RSI as a wave B.

11-22 – Sugar now rejecting lower and likely we see the 12-18 low window in the 13.50 area. Monthly pivot is an alternate target in the 14.24 area. Brazil production is ramping up so expecting this to fall over the next 3-4 weeks.

11-29 – Sugar has now broken the support trend line which is a bearish sign, continuation lower is expected. This is just a pull back and higher prices are expected once this completed. Likely we see $14.00-13.50 into the low window of December 18th.

12-6 – So far so far so good and continuati0n lower is still expected into $14.00-13.50. Still looking for a lower window around 12-18.

12-13 – Approaching out target cycle date and also target is just below at 13.90. Looking for a lower low and setup long by the end of this week. Watch for a touch of the lower trend line.

12-20 – No change in forecast since last week, still looking for downside target as long as the resistance trend line is holding. Should be holding only trailer size position as we are inside the cycle date window.

12-27 – A break of the resistance trend line and the low is now in. We are putting in a neckline and will see a retest this week, likely into the broken resistance trend line and higher. Next window is 3-1 and looking for $17 next.

1-3 – Nice rally and continuation higher expected into March at $17. We should see a buying opportunity this week with a pull back into $14.90 or so, looking for a steady climb higher once the retest is done.

1-10 – Nice rally and made the channel tend line and reversed, looking for a turn this week and higher highs into $17.00. There should be support at the lower Bollie.

1-17 – Another nice rally this week and continuation higher expected. Pull back on the front end of this week and lower into the gap is expected, then higher highs to $17.

1-24 – Lower into the gap as expected and now three back look for the next rally into $17.00-$17.50. We should see RSI exceed 70 in the next rally.

1-31 – Retracement pattern has broken up and retested the low and as a result we should see a rally this week and higher into the March window next. A drop in the USD would help the rally.

2-7 – Rally as expected and now look for $17 and continuation higher. Possible trend line touch in the next two weeks could be a short term top. the next retracement could see 15.50.

 

Coffee

 

9-6 – Coffee is topping out here and a very nice short is setting up. Look for the reversal this week and a minimum retrace into 115. Price is way extended and negative D on RSI is fully set up.

9-13 – It is likely that the turn is in for Coffee. A pull back is needed here into 115-177 or so before the next legg up. Given the devaluation of the USD, I am expecting more devaluation in the future and higher prices in commodities. Look for quality setups Long, this is not ready yet.

9-20 – Target Made on Coffee. Lower low here sets up the next long, turn is setting up. This is a retracement wave and with the devaluation of the Dollar, watch Coffee make new highs into November.

9-27 – As mentioned target made on coffee and looking for a reversal. Likely we see a higher low or a lower low on the next move sown to set up the turn. Convert 115 and we open 145 next. Watch the Real for clues this week with this reversal.

10-3 – Rally has not confirmed yet but likely will on Monday. Looking for the 10-14 window and a retest of the low. It appears to me that 11-2 is the likely low window for Coffee. We will see how it plays out, but resistance at monthly pivot should play out lower.

10-10 – Rally in Coffee is not confirmed and is likely a retracement wave, looking for resistance at 117 or so this week and then a retest of the low. On the retest watch for a possible higher low at 108ish, a lot depends on USD and continued stimulus which will continue to devalue the Dollar.

10-18 – Coffee broke down early and the flag means that we see a lower low into the end of this month. A big rally is coming, watch for the reversal in the next few weeks.

10-25 – Coffee continued lower and now has RSI pos D setup for a rally. I am still leaning lower into 11-02 window and expect a reversal on the next lower low. 102 is the target, waiting on the setup.

11-1 – Coffee about to make a lower low and setup positive D on RSI. Once seen, I am looking for a rally into January. Weekly pivot is currently resistance until proven otherwise.

11-8 – Coffee may have reversed and the tell will be the higher low at around 103.20. Support found there look for a conversion of monthly pivot and higher prices with the next high window in late January.

11-15 – Coffee has turned and we are in buy the dips mode. Look for a retest and a move higher through late January. Support at 108.00 and likely a inverted right shoulder coming this week.

11-22 – Nice rally in Coffee as discussed, support at 112 this week and looking for more upside into the end of January. More USD downside will continue to spur coffee higher.

11-29 – Coffee still needs a lower print and last week it appears that a B wave has printed. Nice selling opportunity here and looking for a 5 down this week to setup the next buy and long into the January high window. I am expecting the initial trend line to break to form the next wave X.

12-6 – Wave C is printing and looking for a long in the 115-113 area. Next long should make 135 into the late January time frame. Look for the three back to complete for the next turn and an RSI in the 30 area.

12-13 – Coffee is not quite make the 115 area and turned and broke the resistance trend line from the 116s. At this point the broke trend line should be support and next step up is into January 24th and 135. Watch for an IHS and then the next step up.

12-20 – Coffee should see more for pullback before continuation higher. Expecting a 1/24/2020 high window and $136.00. Watch the daily middle bollinger band as next support.

12-27 – Coffee should continue to find the support trend line support into the January 24th window. Looking for higher prices into $136 target and possibly higher into $140.

1-3 – Coffee having production problems with the Brazil crop off 15%. Demand has been weak due to Covid so these market forces seem to be balancing each other. Expecting a high this month into 1-24 timing window and $136, support is the trend line as as long as it holds, expect higher prices.

1-10 – Coffee made the lower trend line of the channel system and turned as expected. Continuation higher expected into 1-24 and $136. Demand should pick up later in the year and with the production issues in Brazil, expect this market to be bullish through 2021.

1-17 – Nice rally on Coffee and continuation higher expected, weekly pivot at 126.20 is support and higher highs into 136 expected into the end of January. Coffee will continue to be bullish this year.

1-24 – Pull back on Coffee and a break of the weekly pivot. The trend line is support and must hold to open the $136 target. Rally confirms above 125.20. A broken trend line here and stand aside as this could be an expanded flat.

1-31 – A broken tend line in KC and that means a flag may be developing and lower prices to 117. Chances are that a retest of 123.95 occurs first then lower lows.

2-7 – Coffee is consolidating and as mentioned last week, lower prices should develop in a wave C into the 117-118 area. From there look higher into 136.

 

Live Cattle

 

9-6 – Live Cattle is about to reverse, positive D on RSI is a clue and I am looking for the next big rally into 120s. With DX being devalued, I am looking for commodities to continue to rally into the end of this year.

9-13 – With the devaluation theme, we should see meats rally. LE is set up for a rally into $118-120, W is in and positive D on RSI. Waiting patiently on the monthly pivot to break and convert which is a confirmation of the change in short term trend.

9-20 – I am still bullish on Cattle, no pun intended. We are out of time for this impulse which means we may see a retest of the support trend line in the next few days. I am still expecting the $120 area into October.

9-27 – I am still bullish n Cattle, ane the high window last week as not very dramatic. I still expect higher into the next window of 10-23 and look for the support trend line to do it’s job. We should continue higher and break W before we see the trend line again as support.

10-3 – So far still expecting a higher high in Live Cattle. Bullish action into 10-28 expected and a price target of $120ish. So far a chop fest higher and looking for the bulls to step in this week and pres prices higher. Support trend line mush hold.

10-10 – Live Cattle may be in a triangle here and we need to watch for a Crazy Ivan move which would be a minor higher high to finish a small 5 wave sequence then a retest before seeing higher prices. Mind your risk here and we should see volatility this week.

10-18 – Live Cattle has seen lower prices and a break of the trend line and the Crazy Ivan move. Watch for support and higher. A reversal is close to setting up on a minor lower low. Target is $115.

10-25 – Live Cattle is now setup and has pos D in RSI – looking for a confirmation of the turn on a break and conversion of weekly pivot at 105.225. Next high window is 11-15, a conversion of 111 is required to open the higher high.

11-1 – Nice rally as discussed, looking for a small pullback and continuation higher into the middle of November. The falling resistance trend line is now the focus, needs to convert to make target.

11-8 – Live Cattle in a corrective pattern and expecting a retest lower then next rally higher. we have 7-10 days of upside left in the window and Cattle will need to get moooving this week.

11-15 – Nice move on Live Cattle and now we consolidate and see a bit more of a pull back before heading higher into the 11-30 high window. Look for the turn this week and a choppy move higher. A retest of the low is expected after making the $115 target.

11-22 – Cattle retest here is a three back which should see higher into the end of this month to end a 5 up pattern. From the the low should be retested.

11-28 – Cattle very close to target, and am expecting a small push into $115 and a higher high that sets neg D on RSI. Chances are we will break the support trend line and open a retest of the low into December. Wait for the setup.

12-6 – Live Cattle close to invalidation as the trend line must hold here. Monday need to see a reversal higher and ideal target area for this flag is 116. We are late to the high window and if the trend line breaks we see a retest of the low directly. Lean for now is still long into 115-116.

12-13 – Live Cattle invalidated the support trend line and is now back-testing it. As mentioned to subscribers, look for the next major step lower into January 16th then the next higher high. Looking for a reversal this week and lower lows into 105-06.

12-20 – Live Cattle may be in a triangle here, lean is still lower into the 106 area into January and this week we need to see a reversal OR we can continue higher into target. Waiting for a turn no higher than the R1. If we break, higher highs will ensue.

12-27 – Live Cattle may be in a triangle here. It is early to call a triangle but it has all the characteristics. The R1 must hold here and if seen, look for wave C of the triangle into the 1-16 window then D and E then thrust into 2-26. The ideal play here is a long at the bottom of wave C or a strangle to capture premium.

1-3 – The triangle broke up so expecting a shallower pull back as we are finishing a 5 wave sequence. A higher high and we see a pull back into 1-16 and the $112.00 area before the next major move higher into $124.

1-10 – Live Cattle is consolidating and may see a retest of the low before seeing the next legg higher into the end of Feb. $134 is target and looking for the previous high to convert to confirm next legg higher.

1-17 – Live Cattle has made target and is against monthly pivot. Convert the pivot and we see 2-26 as the next high window and the 122-124 area. Look for a confirmation on a conversion and invalidation below the current low.

1-24 – Nice rally from the low as expected, and higher highs into 2.26 and the 122-124 area is next. RSI is expected so watch for support at 120 and continuation higher.

1-31 – Retracement and support at 120 is expected and the last leg up in LE into 126s and completion of major degree wave W. Looking for a reversal this week.

2-7 – Confirmation of the turn last week and continuation higher as expected into the 2-26 window and likely the 126 window.

 

Gold

 

7-5 – Target made on Gold and a reversal as expected. No confirmation yet as we need to break the support trend line next. Targets the 1720-13 area next. This may play out quickly this week.

7-12 – A higher high this week and a reversal is still expected on Gold. We are testing the trend line and weekly pivot, convert and we open monthly pivot. We should see 1745-50 as a retracement area.

7-19 – Retracement pattern should break lower into 82 and then possibly into 45-50. Waiting on the next move and a long setup. I like Gold long into February 2021.

7-26 – The full retrace target was not made, gold has turned and last week completed a 5 up structure with Neg D on RSI. Looking for Gold to retrace into 1900-1910 or so before the next rally which should see 2050. Buy the dips through Feb 2021.

8-2 – Continuation higher and driven mostly by a move lower in the USD. I am still expecting a pull back into 1904ish then more bullish action to the upside. Silver is pulling back and the USD is not in a retracement rally. Gold should pull back and find support and continue higher. Gold rally should continue through February 2021.

8-9 – I have raised the pull back target as the move lower in DX has lifted the price of Gold. Watch 1975 for a buying opportunity then possibly we could see monthly pivot. Stagflation on the horizon, we should see higher highs into 2400s eventually.

8-16 – Nice move last week in Gold and we have made my first price target for the retracement. We should see a lower low or a retest of the low before we see the next rally. A flag has formed and has been broke, lower should play out this week.

8-23 – Nice three back on Gold and now the flag has broken down and a running flat may be putting in a slightly higher low. Watch for a long setup later this week. Powell speaking on Thursday.

8-30 – Gold has broken the trend line and we need to watch for the broken trend line for a rally. But I see DX as getting ready to rally and there is risk here of moving lower directly to 1900. Convert 1954 and we open the lower price target. This decision should be made this week.

9-6 – Gold may be putting in a triangle here, and we can see a move to 1900. DX rally is just a back test and a move lower can stil occur. I am very bullish Gold into February 2021 so continue to buy the dips as 2100 is the next price target.

9-13 – A short term flag is forming on Gold, and with the USD in a rally, we should see a lower low here to $19. Convert monthly pivot and we are open to head higher directly into 2100. Either way, I am bullish metals through February 2021.

9-20 – Compression on Gold and a number of gold stocks. A move is about to occur. Ideal pattern is a move lower first to 1900 then the break out to the upside into 2100. I am now looking for a high into the end of November.

9-27 – As mentioned last week, a move was about to occur and it did. We are now at target and about to make a decision. Either a marginal lower low and a reversal or just a move straight up. DX is in it’s target area so a turn should be seen this week. When 1950 converts we open 2100 next as target.

10-3 – Gold continues to go higher and we should see a retest this week and higher highs. Watch the USD as it has reversed also. USD is driving the gold bus at this point so expecting it to continue lower and Gold should continue to rally into 2100.

10-10 – Devaluation of the Dollar means higher Gold prices and inflation. Key to the Gold rally continuing is the US government continuing to provide stimulus which means inflation. The Gold rally is depending on the continued push lower on USD. Convert the resistance trend line and we have a confirmation for the move to 2100 into the end of the month.

10-18 – Trend line hugger which does not inspire confidence, but USD heads lower and the US government about to do more stimulus, no change in forecast, looking for the resistance trend line to break and higher into 10-28.

10-25 – Compression is the situation here on Gold and a triangle that should break higher. I have extended the cycle date to the next high window on 11-10 as sideways consolidations push out the date. Waiting on a break of the upper triangle resistance trend-line then a retest of the triangle and a thrust.

11-1 – Compression has broken down and the USD is rallying into 94.30 or so. We can sell make a marginal lower low but this is a buying opportunity on Gold as I am looking for higher prices into February next year.

11-8 – Trend line break last week and we are into the next legg higher into 11-14. Target is 2000-2050 ad a retest back into 1950 or so should follow with higher prices expected into the end of the year.

11-15 – Gold is consolidating in what appears to be a flat. We are in wave C now and likely we see a retest of the low this week. Weekly pivot is resistance until proven otherwise. Once seen, buy Gold as I see higher prices into February and also May of next year.

11-22 – Gold continues to consolidate and looking for a lower low for a long setup. Short term a flag has printed so expecting the lower low early next week. Longer term still bullish Gold.

11-29 – Lower low has played out as discussed and now the structure may put in a lower low for a wave 5 – the trend line test this week will give clues. Resistance at 1828 and we open a wave 5 lower to complete the flat. If we convert that number into support expect the next major rally in Gold. DX also needs a retest higher which is bearish for Gold. No long term changes in forecast, this is a buying opportunity for longer term traders in Gold into 2021.

12-6 – The turn in Gold may be in. This week expect a retest of the low and a rally in the USD. Support expected in 1800 or we will see the new low. Next year inflation will drive gold much higher, any pull back is a buying opportunity.

12-13 – Watch this week for a buy in Gold on a marginal lower low, should see the flag break down and then reverse and see higher highs. Will likely see a positive D setup this week before the turn on RSI.

12-20 – Pull back was shallow and has continued higher into the trend line area. Continuation higher into 1910-20 expected then a pull back into the 1870-50 area as the USD rallies. Expect the rally to last through Christmas then look for a pull back in early January and higher high will ensure into 2100. Pull backs are not short opportunities they are buying opportunities, stay on the right right side and legg in and out of your long positions in Gold.

12-27 – Continuation higher expected in Gold and the support trend line needs to hold into 1920 or so before a pull back will ensue. Gold should set up with neg D here in a higher high and any pull back is a buying opportunity. For 2021, expect to see inflation support Gold prices.

1-3 – Continuation higher still expected as we have not yet seen 1920ish target and a new swing high. Once seen this week we should see a pull back and another buying opportunity into 70 by mid January then the next major swing higher into March. I am bullish commodities in general in 2021, especially metals and Gold.

1-10 – New swing high as expected, the POP then the DROP as expected also and beyond retrace target at 1870-50ish. This represents a buying opportunity so adding to existing positions here is suggested. We can still see positive D set up on RSI so a marginal lower low is possible. Looking for a reversal this week and a move higher into March and 2100s possible.

1-17 – Gold is likely turning here and I am expecting the next legg higher to start this week. A double bottom is almost here and if seen positive D is a strong long setup. DX may be reversing as if seen that will support gold prices.

1-24 – Higher prices as expected last week and we are in a small retrace here which should hold weekly pivot. Looking for continuation higher this week. DX may have broken lower and should see $88 – GC must hold 1815 this week and we are at a decision point here Monday.

1-31 – Broken flag and a retest of flag resistance trend line and higher highs expected. DX is finding resistance at the trend line and if that resistance holds, look higher in GC. 1815 still support and looking for it to hold this week.

2-7 – Last week 1815 broke which opened the next support area at the monthly S1 which is where we are now. We can see a turn without positive D on RSI or we will see a lower low and a turn. The decision to watch is 1821 – if resistance likely the low will be retested and possibly a lower low.

 

 

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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. I am currently using 9 lots for the Striker trades which is based on this account being over $225,000. Each lot for auto trading at Striker requires $25,000 per lot. See the videos below for more information.

 

Track Record January 2020 thru December 2020 Click Here.

Track Record January 2019 thru December 2019 Click Here.

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.

Written by:

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.

07th Feb 2021

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