Welcome to this week’s edition of The Weekly Call, your trusted source for high-quality commodity setups and trading strategies. Since October 2016, our approach has delivered an impressive 777% return, and we continue to share the insights and methodologies that drive these results with this post #407. This week, we’ll explore the latest market trends, actionable trade setups, and global economic factors influencing commodities like sugar, coffee, live cattle, and gold.
Global Economic Overview
The global economy continues to show signs of a slowdown, with inflation gradually easing but still presenting challenges, particularly in the food and agricultural sectors. The recent U.S. Consumer Price Index (CPI) data has heightened concerns about inflationary pressures, as the numbers came in higher than expected. This has led to increased speculation about future interest rate hikes by central banks, which could impact commodity prices in the short term.
Recent data indicates that consumer prices remain relatively high despite significant declines in commodity prices over the past few months. This disconnect is largely due to the lag in price transmission through the supply chain, which continues to frustrate consumers and businesses alike.
Signs of Bottoming in Commodity Prices
There are emerging signs that commodity prices might be nearing a bottom, as global central banks shift towards more dovish policies and the U.S. dollar shows signs of weakening. However, the bottoming process is likely to be prolonged, characterized by sideways trading and gradual price adjustments before any significant recovery takes hold. Given the current economic environment and uncertainties, particularly related to China’s economic performance, traders should be prepared for continued volatility and market consolidation.
Outlook for the Week Ahead
Looking ahead, traders should brace for continued volatility across most commodity markets. Key factors to watch include central bank policy announcements, particularly any signals of shifts in interest rates, as well as weather forecasts in major production regions that could impact supply. Additionally, geopolitical tensions, especially in regions critical to commodity production and transport, could lead to sudden supply shocks, further influencing price movements.
As always, stay informed and be prepared to adapt your strategies as market conditions evolve. All trades are posted on our Private Twitter Feed for subscribers and are included in the track record posted below under Completed Trades. I am currently trading 15 lots given the account balance and will adjust as necessary based on market developments.
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. Trading futures contracts and commodity options involves substantial risk of loss, and may not be appropriate for all investors. Past performance is no guarantee of future results. Please see our Disclaimer for more information.
The trades below are discussed on the Daily Update: – Click Here for a FREE Trial
Sugar
Market Overview: Sugar markets have been highly volatile recently, driven by fluctuating weather conditions and shifts in global demand. Brazil, the largest sugar producer, has enjoyed favorable weather, resulting in robust production. However, the looming threat of El Niño is raising concerns, particularly for other sugar-producing regions like India and Thailand, which could experience adverse weather conditions leading to reduced output.
Technical Analysis: Sugar prices have been on an uptrend, supported by strong fundamentals. However, prices are currently testing a key resistance level. If the market can break through this level, we could see a rally towards higher targets. On the downside, support remains firm, and a drop below this level could trigger a correction, offering opportunities for buyers to enter the market at lower levels.
Actionable Insight: Traders should maintain long positions with stops placed just below the support level to protect against downside risks. For those looking to add to positions, consider buying on dips, especially if the price pulls back to the lower support levels due to short-term market corrections.
Coffee
Market Overview: The coffee market remains sensitive to weather patterns, particularly in Brazil and Central America. Recent frosts and droughts in these regions have exacerbated concerns about supply shortages. The market is also reacting to rising input costs, including fertilizers and labor, which are expected to keep upward pressure on prices.
Technical Analysis: Coffee prices have been in a bullish trend, with strong momentum carrying the market towards new highs. However, the market is currently facing resistance at a key level. If prices break above this resistance, we could see a continuation of the uptrend, with potential targets at higher levels. Conversely, a failure to break this resistance could lead to a pullback towards support levels, providing buying opportunities.
Actionable Insight: Consider staying long with stops placed below key support levels to protect gains. If the market pulls back, it could present an opportunity to add to long positions, particularly if prices retrace to the lower end of the support range.
Live Cattle
Market Overview: The live cattle market has been under pressure due to fluctuating feed costs and shifting global demand for meat. Drought conditions in major cattle-producing areas have led to tighter supplies, which, combined with strong demand for beef, have helped support prices. However, the market remains vulnerable to changes in feed costs and export demand, particularly from key markets like China.
Technical Analysis: Live cattle prices have been consolidating after a recent downtrend, indicating the potential for a reversal. The market is testing a significant resistance level, and a break above this could signal a bullish reversal. On the other hand, if prices fail to break this resistance, a retest of the support level is likely, where buyers may look to enter the market.
Actionable Insight: Traders should watch for a breakout above resistance to confirm a bullish reversal. Long positions can be initiated on a breakout, with stops placed below the recent lows to manage risk. If the market fails to break resistance and pulls back to support, it may offer a better entry point for long positions.
Gold (GC)
Market Overview: Gold continues to be a favored safe-haven asset amid ongoing economic uncertainties. The recent CPI data has reinforced gold’s appeal as an inflation hedge, especially as central banks around the world remain cautious about future rate hikes. The ongoing geopolitical tensions and economic uncertainties are likely to keep gold in demand.
Technical Analysis: Gold prices have been consolidating within a bullish range, indicating that the market is gearing up for its next move. The metal is currently trading near a key resistance level, and a break above this could trigger a rally towards new highs. Support remains strong, and a pullback to support levels may attract buyers looking to capitalize on gold’s safe-haven status.
Actionable Insight: Maintain a bullish bias, with long positions targeting higher levels if resistance is broken. Consider adding to positions on any dips towards the lower support levels, with stops placed below this range to protect against downside risks.
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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 15 lots for the Striker trades which is based on this account being over $375,000. Each lot for auto trading at Striker requires $25,000 per lot. See the videos below for more information.
Track Record January 2022 thru December 2022 Click Here.
Track Record January 2021 thru December 2021 Click Here.
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.
Completed Trade in Natural Gas as of January 2nd
We were stopped out of out last 1/3 position as weather-related news created a gap down on January 2nd and a possible flat with support at 3.196. This concludes our trade with natural gas; we exit with 550 ticks on 2/3s of a position with $8,500 in profit.
Completed Trade in Coffee as of January 19th
We exited the coffee trade on January 19th with $17 or over $15,000 in profit using a margin of $8,850. A great example of using leverage in futures.
Completed Trade in Gold as of February 8th
We exited the gold trade on February 8th with over $14,000 in profit. We entered on January 3rd and held the trade into the high window. We will re-enter gold in a few weeks after a backtest.
01st Sep 2024
