Month: November 2017

BrokersEDGE 11/7/17 Morning

E-mini S&P (December)

Yesterday’s close: Traded to and settled at a new all-time high; 2590 and 2588.75 respectively.

Fundamentals: The S&P put in another strong session yesterday and Asia leads the way this morning with the Nikkei up more than 1.5% and Russia up more than 2%, China and Hong Kong are both up around 1%. President Trump called for North Korea to “come to the table” on a nuclear deal in a speech in South Korea. The Kremlin said that he will visit with Putin at a forum in Vietnam this week. The tax-reform discussion will heat up and this is important to listen to as the S&P nears its next round number. JOLTs Job Openings is due at 7:30 am CT and Janet Yellen is scheduled to speak at 1:30 pm.

Technicals: Price action is working to put in a higher low for the third straight session. The bulls will remain in the driver’s seas as long as we maintain a close above the 2581.75 level. The next resistance pocket we have is at 2596-2600 and the emphasis is two levels as well as the law of round numbers. However, we have no next major three-star resistance in sight at the moment.

Bias: Bullish

Resistance – 2596-2600**, 2616**

Support – 2581.75**, 2571.75-2573.50**, 2561.25-2563.25**, 2555.50**, 2539.25-2543***, 2523.25**, 2507.75***

 

Crude Oil (December)

Yesterday’s close: The breakout continues, session settled at 57.35.

Fundamentals: The news out of Saudi Arabia has at a minimum discouraged selling. The crackdown is said to widen this morning as more bank accounts are frozen. Now in November, the OPEC meeting is nearing, and this has added to the bullish momentum. On Monday Nigeria and Iraq both commented on support of a deal to extend production cuts. Inventories come into the picture today and a three day stretch of data out of China begins later tonight with Trade Balance.

Technicals: The technical picture remains very strong and the only resistance level we had between Friday’s breakout above major three-star resistance at 55.02-55.25 and the upside target of 58.97 was taken out at 56.51-56.79; as long as price action remains above here intraday the tape is very bullish.

Bias: Bullish

Resistance – 58.97***

Support – 56.51-56.79**, 55.02-55.25***, 54.45-54.54**, 53.76-53.90**, 52.86-53.11***

 

Gold (December)

Yesterday’s close: Settled at 1281.6

Fundamentals: The Dollar is strengthening this morning, and this began on the European open. Gold opened up the evening flat but has trickled lower into this morning down about $4. Dollar strength comes after an awful read on German Industrial Production data this morning though Eurozone Retail Sales followed it up with a better than expected results. Momentum in the currency market still is carrying over from Friday’s ISM Non-Manufacturing despite a breather yesterday and as President Trump rallies support for a North Korean nuclear deal during his trip in Asia. JOLTs Job Openings are due at 7:30 am CT and Janet Yellen speaks at 1:30 pm.

Technicals: Gold closed above resistance at 1280.3-1280.8 which now comes in at 1280.5-1281.6, however, given the early strength the tape was disappointing last night. Yesterday brought another hold against major four-star support and metal remains very constructive over the long-haul. However, the Dollar is risking and massive long-term level in the Dollar Index comes in at 95.80; this must be on everyone’s radar.

Bias: Bullish

Resistance – 1280.5-1281.6**, 1291.3-1292.9**, 1298.4-1300**, 1308.4-1312.6**

Support – 1262.8-1269***, 1243.6**

 

Natural Gas (December)

Yesterday’s close: Settled at 3.134, the highest since 10/24/17

Fundamentals: Colder temperatures are across the Midwest, but the east coast remains mild. The United States is exporting and the bullish picture is molding together.

Technicals: Price action got out above resistance at the 3.103 level and it will be key for the market to hold above here in order to maintain immediate-term momentum. Today’s session traded to a new swing high of 3.148 before retreating. Price action built a shelf above 3.05 throughout yesterday before pushing higher. First major support now comes in at 3.033-3.05 and a move below here will neutralize the strength from late last week and into Sunday. The gap support is now our three-star level at 2.984-2.998 and a close below here will encourage selling. The bulls must achieve a close out above 3.179-3.198 resistance to ignite a bullish leg higher.

Bias: Bullish

Resistance – 3.179-3.198***, 3.22**, 3.323-3.36***

Support – 3.103*, 3.033-3.05**, 2.984-2.998***, 2.847-2.861**, 2.753-2.7565***, 2.486-2.522****

 

10-Year (December)

Yesterday’s close: Settled at 125’11

Fundamentals: Prices are holding hell despite a another session of new all-time highs in the equity market. JOLTs Job Openings come into the picture at 7:30 am CT and Janet Yellen speaks at 1:30 pm. Traders should keep an ear to the ground on Trump’s trip in Asia and the ongoing discussion of a nuclear deal for North Korea. However, the tax-reform debate heats up this week and might be a more imminent factor in the treasury market. The 10-year seems to be holding the better of the other safe-haven assets between Gold and the Yen, though given the Dollar strength traders should look to pare back longs and be prepared for a lower tape.

Technicals: We have become more neutral today on Dollar strength. This rally that began after the ECB a week and a half ago might have run its course. We still believe in a long position, but traders might want to be patient at the moment. Furthermore, we have discussed the more intermediate-long term trade to set up after the Fed hike in December and into January. Resistance comes in at 125’19 and the tape feels to be running out of steam into here. However, traders who want to stay long can look to manage risk with a stop just below first key support.

Bias: Bullish/Neutral

Resistance –125’19**, 125’255**, 126’01**, 126’15***

Support – 125’02-125’035**, 124’19**, 124’00**, 122’22 – 122’29***

 

For more information please contact DAW Trading at brokersedge@dawtradingdiv.com or at 877-329-0006 and visit us at http://dawtradingdiv.com/brokers-edge/

 

 

Disclaimer:

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. DAW Trading (“DAW”) uses various outside sources for research material regarding futures and options on futures trading therefore the views and opinions expressed in this letter may not necessarily reflect the view of DAW or its staff. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to DAW.

BrokersEDGE 11/6/17 Recap

Recap

 

Euro (December)

Session close: Finished down 1.5 ticks.

Fundamentals: It was not Nonfarm Payroll on Friday that put pressure on the Euro, but the strongest ISM Non-Manufacturing read in 12 years. This morning the overall Services PMI data out of the Eurozone was better than expected along with PPI, but every region missed their mark. Ultimately, a weak tape from Friday carried over in through today in what was a quiet session. We have a lot on the docket tomorrow with Industrial Production data out of Germany is due at 1:00 am CT tomorrow, ECB President Mario Draghi is scheduled to speak at 3:00 am, Retail Sales is due at 4:00 and the EU Finance Ministers also meet around that time. Traders should also look to volatility from U.S JOLTs Job Openings at 7:30 am CT. Janet Yellen also speaks at 1:30 pm CT.

Technicals: The Euro initially spiked after Nonfarm Payroll to a high of 1.1722 and that extension ultimately spent little time above first resistance. Price action is now holding first support at 1.1622-1.1639 and the closing low from October 27th, the lowest since July. We remain long term bearish the Dollar, but traders need to be cautious against key support in the near term; a close below here will open the door to further selling.

Bias: Bullish/Neutral

Resistance – 1.1705***, 1.1736*, 1.17595-1.1767*, 1.1837**, 1.1860-1.1879**, 1.1921-1.1933***,

Support – 1.1622-1.1639**, 1.1604*, 1.1481-1.15***

 

Yen (December)

Session close: Settled up 30.5 ticks

Fundamentals: The Yen sold off after the release of the BoJ Minutes and bottomed around the time that Kuroda spoke; he noted that the global economy is in good shape, but uncertainties remain and that there is still distance to achieve the 2% target. Risk assets were on demand today with Gold and treasuries both trading higher along with the Yen despite the S&P trading and closing at a new all-time high.

Technicals: Price action ran stops below first support last night before reversing sharply from the lowest level since March. The session’s range was nearly one point. We neutralized our long-term bullish stance last week on weak technicals, however, today’s price action reinvigorates our bullishness. We will continue to watch the crucial .8800-.8828 level on a closing basis and want to see price action maintain a close above here in order to stay bullish in the near-term.

Bias: Bullish/Neutral

Resistance – .8868**, .8894**, .8980**, .9028-.9029**, 9057***

Pivot- .8800-.8828***

Support – .8755-.8764**, .8639**, .8427***

 

Aussie (December)

Session close: Settled up 39 ticks.

Fundamentals: We are seeing short covering ahead of tonight’s RBA meeting and an announcement due at 9:30 pm CT. Traders must stay nimble as we await more news. Higher commodity prices today also helped keep a firmer footing on the trade.

Technicals: Price action double bottomed against Friday’s low early last night at .7635. This is right above major three-star support and this level is also a key factor in us bringing keeping a bullish bias in the face of weakness last week. The market played off this level tremendously through today’s session, but the key will be a close above .7717-.7725 following tonight’s RBA; this will neutralize the weakness and put the bulls in the driver’s seat with momentum.

Bias: Neutral/Bullish

Resistance – .7717-.7725***, .7780**, .7872-7902**, .7964**, .8096-.8115***

Pivot – .7673

Support -.7622***, .7550**, .7390****

Canadian (December)

Session close: Finished the session up 26 ticks.

Fundamentals: The Fundamental picture has seemingly taken a sharp turn since last week’s GDP data with Friday’s employment report showing much strong gains than expected and todays Ivey PMI coming in well above expectations as well. The Bank of Canada’s Poloz speaks tomorrow at 11:55 am CT.

Technicals: We became outright bullish the Canadian on Friday due to a combination of fundamentals and technicals. Price action faces major three-star resistance at .7918-.7939, and among other levels brings the 100-day moving average and a trend line from the September highs; a close out above here will be very bullish. Major three-star support now comes in at .7745-.7790 and a close below here will signal a failure.

Bias: Bullish

Resistance – .7856**, .7918-.7939*** .8035-.8046**, .8293****

Support – .7745-.7790***, .7671**, 7550***

For more information please contact DAW Trading at brokersedge@dawtradingdiv.com or at 877-329-0006

 

 

Disclaimer:

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. DAW Trading (“DAW”) uses various outside sources for research material regarding futures and options on futures trading therefore the views and opinions expressed in this letter may not necessarily reflect the view of DAW or its staff. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to DAW.

BrokersEDGE 11/6/17 Grains

CORN (December)

Last week’s close: December corn futures squeaked out a ¾ cent gain on the week, trading in a narrow 6 ¾ cent range as the market continues to consolidate within tighter technical levels ahead of this week’s USDA report. Fridays commitment of trader’s report showed that funds increased their net short position by 28,369 futures and options contracts. This puts their net short at 202,763 contracts which is a record short position for this time of year.

Fundamentals: We probably sound like a broken record saying that the market is searching for a fundamental catalyst to give this market new direction. This Thursdays USDA report which is due out at 11am cst could be that catalyst to put some volatility back in the market. Yield estimates have been increasing over the past few months as the weather concerns early in the year have to been as worrisome as previously thought. FC-Stone released their estimates last week and they are looking for a yield of 173.7 bushels per acre, this compares with their estimates of 169.2 bushels per acre last month and 162.8 bpa in August. Informa Economics released and raised their estimates last week too, they are looking for a yield of 173.4 bushels per acre, up nearly three bushels from their previous estimate. Their increased yield projections led to an increase in final production from 14.182 billion bushels to 14.41 billion bushels.

Technicals: Corn prices are continuing to resemble that of a stick in the mud, trading in a tight narrow range for two months straight. The 50-day moving average has been a key level of resistance for us, this comes in at 351 ¼ this morning and is continuing to work lower. If the bulls can achieve a close above this level it would be the first time since July and certainly a step in the right direction. In order to encourage short covering from funds, we will need to see a break and close above 355 ¼ to mark higher highs for the second time since posting a low on October 12th. On the support side of things, 345 ¼ is the first line in the sand. This was a higher low that we put in last week, if it holds it would be the second higher low from the October 12th lows of 342 ½. Tops and bottoms are a process not a point, these technical levels mentioned are important in attempting to form a sturdy base in the market.

Bias: Neutral

Resistance: 351 ¼**, 355¼***, 360-362***, 372-375**

Support: 342 ½-345 ¼**, 334-335 ½***

 

SOYBEANS (January)

Last week’s close: January soybean futures saw a disappointing session on Friday where we saw all of the week’s gains given up, finishing a penny lower for the week; funds were estimated sellers of 9,000 contracts Friday. Fridays commitment of trader’s report showed a net long position of 39,016 contracts, this is down roughly 8,000 contracts from the previous week. Volatility did pick up slightly as the trading range was 18 ½ cents wide. Fundamentals: As harvest is nearly complete here in the states (looking for 90% complete in today’s progress report) attention will continue to turn and give more weight to South American weather as they continue to plant and go through their crop development stage. However, before shifting all the focus, you will still want to keep a close eye on this week’s USDA report which will be released Thursday at 11am cst. FC-Stone has come out with yield estimates at 47.7 bushels per acre. We also so Informa Economics publish an estimate of 49.7, down slightly from 50 bushels per acre in the previous month. We will continue to compile analyst estimates and provide a convenience table for you before and after the release of the report.

Technicals: The market has been trading technically sound over the past two months, holding key support levels defined by the trendlines and moving averages we have been writing/talking about nearly every day. Last week’s failure at technical resistance led to some profit taking which brought prices right back to trendline support and the 50% retracement from the June lows to the July highs. We see technical support from 984 ¾ down to 979 ½. Aside from important trendlines and Fibonacci retracements, we also have the 50,100, and 200 day moving average. If the market does break and close below, we could see long liquidation from the funds but until then we will continue to have a bullish bias.

Bias: Bullish

Resistance: 999 ¼-1004 ¾**, 1014**, 1021 ¼****

Support: 984 ¾**,979 ½***, 968 ¼**, 957-963 ¼****

 

WHEAT (December)

Last week’s close: December wheat futures were under a lot of pressure to start the week but short covering elevated prices to finish the week just a penny lower after trading in a 12 ¾ cent range. Funds were estimated to have been sellers of 1,000 contracts on the week. Fridays commitment of trader’s report shows the funds have a net short position of 110,875 futures and options contracts, this is an increase of 26,910; keep in mind that this data is compiled through Tuesday and does not reflect Thursdays short covering rally where funds were estimated to have been buyers of 7,000 contracts.

Fundamentals: The wheat market has been looking for new fundamentals to get prices out of their downward slide. Exports are something we have been continuing to keep a close eye on and that is likely what needs to change. With ample global supply we will need to see an increase in export demand, something we have not been able to find over the past several weeks. Export inspections will be out later this morning, we will have those figures in tomorrow’s report. Crop progress is this afternoon at 3pm cst. The most important event of the week will be Thursdays USDA report, we will have our estimates out in tomorrow’s report.

Technicals: The market saw short covering on Thursday which has a lot of armature analysts/traders deciding to be a hero and saying a bottom is in. Although it could be it is not confirmed, and we would rather step back in on the short side against technical resistance. Technical resistance comes in at 438 ¼ this morning, this represents the 50-day moving average, as with corn this is an indicator we have not closed above since July. The trend is your friend until the end when it bends, and we have been seeing lower highs and lower lows, there’s just no need to fight it just yet. Bias: Bearish

Resistance: 438 ¼** 443***, 462 ¾**, 478-479****

Support:422 ½**, 415 ¼**, 399-402 ¾****, 390-392 ¼**

 

For more information please visit us at www.dawtradingdiv.com or contact DAW Trading at info@dawtradingdiv.com

 

 

Disclaimer:

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. DAW Trading (“DAW”) uses various outside sources for research material regarding futures and options on futures trading therefore the views and opinions expressed in this letter may not necessarily reflect the view of DAW or its staff. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to DAW.

BrokersEDGE 11/6/17 Morning

E-mini S&P (December)

Last week’s close: Settled at a new all-time high out above resistance at 2582.75.

Fundamentals: Global equity markets are unchanged to marginally lower in a cautious start to the week due to turmoil in the Middle East and ahead of a critical week for the new tax-reform bill. Saudi Arabia captured headlines throughout the weekend as their military shot down a ballistic missile over Riyadh fired by Yemen-rebels and the future king tightened his grip on power by arresting and freezing the assets of several prominent figures. Added to all of this, the Lebanese Prime Minister resigned his post while in Riyadh and has returned to the city as he fears an assassination attempt; it is believed that this might not be voluntary. The missile by Yemen-rebels backed by Iran is the closest to such a populated area and a massive blow to Saudi-Iran relations. The house cleaning by the current prince and future king included the popular Prince al-Waleed whose holdings include Citi, Twitter and Lyft. All of this deflates the enthusiasm the back half of last week saw to close out. The tax-reform bill was received warmly last week but faces tough criticism and quite a few hurdles, it begins debate today with a potential vote next week. We are in the later innings of earnings season with SYSCO and CVS this morning and Priceline Group after the bell. Eurozone Services PMI and PPI were better than expected this morning, but the Euro has not reacted much. New York Fed President Dudley speaks at 11:30 am CT. Tomorrow ECB President Mario Draghi speaks at 3:00 am CT and Janet Yellen follows later in the afternoon, we also have JOLTs Job Openings.

Technicals: Friday’s session finished the week out above major resistance at 2581.75 for a record close but as we discussed in our Tradable Events update yesterday, we cannot bank on technicals due to the news over the weekend. Price action on Friday could only match the all-time high of 2585.50 and today’s session has a lower high of 2584.75; there is resistance building up here and we are a little more cautious than Friday’s enthusiasm would lead you to believe. First key support comes in at 2571.75-2573.50 and as long as price action stays above here, the bulls will have an edge in the very immediate-term.

Bias: Bullish/Neutral

Resistance – 2581.75**, 2585.50*, 2595-2600**

Support – 2571.75-2573.50**, 2561.25-2563.25**, 2555.50**, 2539.25-2543***, 2523.25**, 2507.75***

 

Crude Oil (December)

Last week’s close: Broke out above major three-star resistance at 55.02-55.25 and settled at 55.64

Fundamentals: The news out of Saudi Arabia over the weekend adds a geopolitical element that the market has lacked for quite some time. Instability in the region will keep a bid under the market. In the attempt to tighten his grip on power, Crown Prince Mohammad Bin Salman arrested the head of the National Guard and this is said to be a sign that struggle is much bigger. The addition of Iran through Yemen-rebels and the Lebanese crisis is yet another major wild card. This further supports our bullish thesis we hammered home last week, and Crude is now trading at the highest level since July 2015. Adding support on Friday was the Baker Hughes rig count, Oil rigs dropped eight, the largest drop this year.

Technicals: Price action traded to a high of 56.28 overnight and the next major resistance level comes in at 56.51-56.79. The Gold Cross last week with the 50-day moving average now above the 200-day came on strong volume and this along with other supportive factors ultimately should point to a test to the next major three-star level at 58.97. Bulls need to see a continued close above 55.02-55.25 which is now three-star support.

Bias: Bullish

Resistance – 56.51-56.79**, 58.97***

Support – 55.02-55.25***, 54.45-54.54**, 53.76-53.90**, 52.86-53.11***

 

Gold (December)

Last week’s close: Settled at 1269.2

Fundamentals: Gold finished last week at the lowest level since August 8th. Nonfarm Payroll was surely nothing to write home about as Average Hourly Earnings showed no gain and job creation missed the mark (though revisions put this number more or less in line). However, it was the ISM Non-Manufacturing read which reached a 12-year high coupled with a record close in equity markets that put pressure on Gold. The Dollar also left a large tail due to the ISM read and traded to a one week high. The geopolitical barometer which registered close to zero on Friday ticked up over the weekend with the missile over Riyadh and the uncertainty that now throttles Saudi Arabia. Gold is reacting accordingly this morning trading back above 1270. New York Fed President Bill Dudley speaks later today at 11:20 am CT and tomorrow we have JOLTs and Yellen.

Technicals: Major four-star support has appeared to win once again. Price action traded to a low of 1265.9 on Friday, but this is a second higher low since early October and we now have a trend line within this rare four-star level. We remain bullish and are very upbeat on this constructive price action to start the week. Resistance remains at 1280.3-1280.8 and a close out above here is needed to neutralize recent weakness.

Bias: Bullish

Resistance – 1280.3-1280.8**, 1286.1*, 1291.3-1292.9**, 1298.4-1300**, 1308.4-1312.6**

Support – 1262.8-1269***, 1243.6**

 

Natural Gas (December)

Last week’s close: Settled at 2.984

Fundamentals: Prices worked well of the lows of the week ahead of the weekend. The key here is that two weeks ago weather models began to forecast a milder winter, and this exacerbated the selling, however, we just don’t see a winter that would justify prices below 3.30 nonetheless 3.00. It is key that the U.S is now an exporter of Natural Gas and last week’s court ruling favored prices more than one would think. Temperatures and forecasts remain mild through much of the country and this could work to subdue rallies. We remain long term bullish.

Technicals: Prices are up strongly this mornings, gapping through major three-star resistance at 3.012-3.0225 on the open last night. On Friday we called the 2.981 level a hurdle that we think we can achieve and it did with a settle at 2.984, this price action neutralized weakness and encouraged short covering and fresh buying. We are now watching the 3.054-3.064 level on a closing basis for the market to gain further footing. Resistance comes in above here at 3.103 and price action traded to a high of 3.095 on the open, the last Sunday night gap open left the open as a high; the bulls must take this level out this week or face waves of selling.

Bias: Neutral/Bullish

Resistance – 3.054-3.064**, 3.103**, 3.179-3.198***, 3.22**, 3.323-3.36***

Pivot – 3.012-3.0225***

Support – 2.984**, 2.847-2.861**, 2.753-2.7565***, 2.486-2.522****

 

10-Year (December)

Last week’s close: Settled at 125’05

Fundamentals: Prices stayed higher for most of the session despite a stronger Dollar and weaker Gold. The Nonfarm Payroll Report missed the mark, but the flat Average Hourly Earnings is concerning. Inflation as a whole is not rising but gas and food prices are, and this is concerning for economic growth when or if earnings cannot keep up with this. We also have discussed the reduction of risk by holders of large long positions in the treasury market, these holders likely began to step back in after Wednesday and have contributed to this move higher.

Technicals: Price action finished the week out above first resistance which neutralized recent weakness. We have the next key resistance level to watch at 125’19. Today’s session has been inside of Fridays so far and tomorrow should bring more volatility than today. The bulls look to maintain a close above the 125’02-125’035 mark.

Bias: Bullish/Neutral

Resistance –125’19**, 125’255**, 126’01**, 126’15***

Support – 125’02-125’035**, 124’19**, 124’00**, 122’22 – 122’29***

 

 

For more information please contact DAW Trading at info@dawtradingdiv.com

 

 

Disclaimer:

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. DAW Trading (“DAW”) uses various outside sources for research material regarding futures and options on futures trading therefore the views and opinions expressed in this letter may not necessarily reflect the view of DAW or its staff. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to DAW.

BrokersEDGE 11/2/17 Morning

11/2/17

E-mini S&P (December)

Yesterday’s close: Finished at 2574.75

Fundamentals: The Fed stayed pat yesterday as expected and left the curveballs to the World Series Champs the Houston Astros. The Dodgers played a great season and series as well, but this is also so great for the city of Houston that has been through so much this year. Back to the market. There was no Yellen presser after this one yesterday, but the statement continued to show concerns on inflation and gave a nod to higher gas prices for pulling more than its weight this last quarter. The S&P reached a new all-time high of 2585.50 yesterday before a somewhat disappointing session unfolded. Equity prices pared gains as the Washington postponed the unveiling of the tax-reform bill to today. Whether it gets released today and its reception will play a critical role in this market. Facebook released solid earnings but is under pressure due to the Russia issue. We come into a huge day of earnings and an even bigger back half of the week. Companies from massive to simply $1B are due ahead of the bell; Alibaba, AmerisourceBergen, CIGNA, Exelon and Yum! Brands to name a few. Of course, all eyes will be on Apple after the bell. President Trump is expected to announce Powell for the Fed Chairmanship today. The Bank of England is expected to raise interest rates at 7:00 am CT. We have Jobless Claims at 7:30 am CT along with Nonfarm Productivity. Fed official Dudley is expected to speak at 11:20 am CT. And of course, tomorrow we have Nonfarm Payroll and ISM Non-Manufacturing.

Technicals: Price action is consolidating back into the middle of its range after trading to a low of 2563.50 overnight. Yesterday’s open was disappointing to the momentum players as the market has lost more than 20 points. Strong support is building at the 2561.25-2563.25 and buying the first test into here overnight proved to be a strong setup. The 2571.75-2572.75 level will be crucial to watch on a closing basis, back above here and the bulls can remain in the driver’s seat. Below here though the bulls must continue to defend first support. The bears look to achieve a close below 2561.25-2563.25 in order to encourage increased volume on further selling.

Bias: Bullish/Neutral

Resistance – 2581.75**, 2595-2600**

Pivot – 2571.75-2572.75

Support – 2561.25-2563.25**, 2555.50**, 2539.25-2543***, 2507.75***

 

Crude Oil (December)

Yesterday’s close: Settled at 54.30, early a dollar from the high of 55.22 Fundamentals: Yesterday’s EIA report was nowhere near as bullish as Tuesday’s API with an overall draw of Crude and the products coming in at about 8 mb, half of API’s overall draw of about 16 mb. The Import and Export numbers did steal the EIA headlines though with both coming in at record lows and highs respectively. The large divergence not only shows Oil independence here in the U.S but also is the key driver in tightening supply. We have a news heavy schedule to finish out the week and with tension picking up once again in Iraq we can look for Crude to put in its common Thursday night low around midnight.

Technicals: The longer term technicals are pointing onwards and upwards with this week’s Golden Cross, the 50-day moving average moving out above the 200 dma, coming on record volume. This is a strongly bullish technical indicator when combined. However, price action has clearly struggled to get out above the high of the year that came on the first week at 55.24. The good news for the bull camp is a close out above here should encourage similar price action as we saw with a close out above 53.11. This means you do not have to pick a bottom, but look for a low to come in overnight tonight and for momentum to push higher through tomorrow’s session.

Bias: Bullish/Neutral

Resistance – 55.02-55.25***, 56.51-56.79**, 58.97***

Pivot – 54.30-54.45

Support – 53.76-53.90**, 52.86-53.11***, 52.07**

Gold (December)

Yesterday’s close: Finished at 1277.3

Fundamentals: Gold did not perform as well as other metals in the complex yesterday but buying interest remains constructive. The fundamental backdrop remains constructive with the Fed expressing concern over soft inflation and furthermore eluded to transitory factors really helping recent inflation data. President Trump is expected to nominate Powell for the Fed Chair today which is expected and shouldn’t stir things up much. The looming question mark is tax-reform and we are expecting to see a bill today, further delays should put pressure on equities and support safe haven assets. Jobless Claims are due at 7:30 am CT along with Nonfarm Productivity. NY Fed President Bullard is set to speak at 11:20 am CT and new Atlanta Fed President Bostic at 5:15 pm CT. Traders Ultimately, traders are waiting on Nonfarm Payroll tomorrow morning.

Technicals: The tape remains constructive as four-star support continues to stand strong but is struggling to get out above first key resistance at 1280.3-1280.8; a close out above here is really needed to extend away from major four-star support. The bulls look to achieve a close out above 1291.3-1292.9 on the week to encourage further buying while the bears look to close into and below four-star support to signal a failure.

Bias: Bullish Resistance – 1280.3-1280.8**, 1286.1*, 1291.3-1292.9**, 1298.4-1300.7**, 1308.4-1312.6**

Support – 1262.8-1269***, 1243.6**

 

Natural Gas (December)

Yesterday’s close: Settled down .003 after paring loses from a fresh low of 2.847.

Fundamentals: Today’s storage report expects a build of 60 bcf. Mild temperatures continue to be the primary enemy of the bull camp. But heating season is right around the corner and storage levels at 3.71 tcf remain below last year and the five-year average. Still, this number can be a little off-beat since last year’s injection season ended at a record level. We are getting so close to heating season and the final storage numbers remain crucial, builds lower than expected over the next two to three weeks will be bullish.

Technicals: Price action has perked up a little on short covering ahead of today’s report from the lowest level in the December contract since March 2016. First minor resistance comes in at 2.93. The bulls truly need to close back above major three-star resistance at 3.012-3.0225 in order to neutralize this weakness and step back into the driver’s seat.

Bias: Neutral/Bullish

Resistance – 2.93*, 2.981**, 3.012-3.0225***, 3.054-3.064**, 3.103**, 3.179-3.198***, 3.22**, 3.323-3.36***

Support – 2.961**, 2.753-2.7565***, 2.486-2.522****

 

 

 

 

10-Year (December)

Yesterday’s close: Lost 1 tick at 124’29

Fundamentals: Support was brought to the 10-year as equity markets weakened off all-time highs yesterday morning. The Fed did not bring any surprises yesterday though their concerns on soft inflation can potentially be a great catalyst to higher prices if data between now and the end of the week miss. If the unveiling of the tax-reform bill gets pushed back further this should continue to support prices. Jobless Claims and Nonfarm Productivity is due today at 7:30 am CT. Tomorrow truly brings the heat with the all-expected Nonfarm Payroll Report at 7:30 am CT. ISM Non-Manufacturing is to follow at 9:00 tomorrow.

Technicals: Resistance at 125’02-125’035 is holding strong. Traders need to keep an eye on equities and weakness here into the end of the week should push the 10-year out above resistance. It feels as if price action in the 10-year is attempting a bottom and it no doubt at a critical inflection point. We remain longer term bullish but have begun to lift some near-term caution.

Bias: Neutral/Bullish Resistance – 125’02-125’035**, 125’19**, 125’255**, 126’01**, 126’15***

Support – 124’19**, 124’00**, 122’22 – 122’29***

 

For more information please contact DAW Trading at info@dawtradingdiv.com

 

 

Disclaimer:

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. DAW Trading (“DAW”) uses various outside sources for research material regarding futures and options on futures trading therefore the views and opinions expressed in this letter may not necessarily reflect the view of DAW or its staff. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to DAW.

BrokersEDGE 11/2/17 Grains

CORN (December)

Session Close: December corn futures closed 2 ¾ cents higher yesterday, trading in a range of four cents. Funds were estimated to have been buyers of 5,000 contracts.

Fundamentals: Corn managed to trade higher yesterday on some concerns over the back half of harvest. Weather has been less than ideal for the areas that are lagging the five-year average with rain, wind, and snow adding some stress to an already stressful time of year. Yesterday’s weekly ethanol report from the EIA showed ethanol production rose by 17,000 barrels per day but total stocks were up 400,000 to 21.5 million barrels. Export sales this morning came in at 811,400 metric tons, this compares with the expected range from 800,000-1,100,000 metric tons. FCStone released their yield estimates yesterday and have the corn pegged at 173.7 well above the 162.8 they had published in August. Informa Economics will be releasing their estimates today

Technicals: Yesterdays price action was very constructive as the market managed to make a second higher low from the August 12th low. If the bulls can achieve a close back above the 50-day moving average a post a second higher high above 355 ¼, we could see funds start to cover. Whether you are a bull or a bear, you have an opportunity here as we linger in the middle of a well-defined trading range which means well defined risk. We are shifting our bias from bearish to neutral and would not be opposed to looking long so long as yesterday’s lows can hold. We will need to see more confirmation to change that to outright bullish.

Bias: Neutral

Resistance: 351 ½**, 355¼***, 360-362***, 372-375**

Support: 342 ½-344 ¼**, 334-335 ½***

 

SOYBEANS (November)

Session Close: November soybean futures closed 6 cents higher yesterday, trading in a range of 11 ¼ cents on the session. Funds were estimated buyers of 6,000 contracts.

Fundamentals: Yesterdays crush report came in at 145.37 million bushels, this was in line with the consensus from analysts which is up just over 5% from last year. This morning’s export sales came in at 1,967,000 metric tons, this came in above the top end of the expected range from 1,45,000-1,850,000 metric tons. FCStone released their updated yield projections yesterday, that came in at 49.9 which is in line with average estimates; this compares with their August estimate of 47.7 bushels per acre. Informa economics will be releasing their estimates today and we will get a USDA update next Thursday. We will continue to keep an eye on South America as they continue to plant and enter the crop development stages. Due to early delays, producer selling has been slow with only 17.7% of their crop sold, this compares with their five-year average of 30%.

Technicals: The market has held technical support nearly perfectly which keeps the bulls in control. The market is using that momentum to trade higher this morning, but market participants will want to see volume confirm price on the open. Technical resistance was tested early this morning, that has come in from 999 ¼-1004 ¾ for us. If the market can chew through this pocket, we could see funds extend their long position and press prices to 1021 ¼. The trend is your friend until the end when it bends and the trend over the last two and a half months has been higher lows and higher highs.

Bias: Bullish

Resistance: 999 ¼-1004 ¾**, 1014**, 1021 ¼****

Support:981 ¾-984 ¾**,977***, 968 ¼**, 957-963 ¼****

 

WHEAT (December)

Session Close: December wheat futures closed 1 ¾ cents lower yesterday, trading in a range of 5 ½ cents. Funds were estimated to have been even on the day.

Fundamentals: Finding new news and bullish tidbits has been like finding a needle in a haystack as of late. Export sales this morning came in at 347,800 metric tons, this compares with the expected range from 250,000-450,000 metric tons. The market really needs to see export demand pick up to help provide a fundamental floor in the market. The dollar may have run out of steam fundamentally and technically, if the dollar continues to retreat off of technical resistance we could see that offer minor support to the wheat market.

Technicals: The wheat market is trading higher this morning, the good news along with that is that it appears the sun is going to come up too (although foggy). Yesterdays close marked the sixth consecutive close lower as the bears continued to add to short positions. Even with the long string of negative closes, the RSI (relative strength index) did not breach 30. A reading below 30 typically indicates that the market has exhausted itself on the sell side. Technical support remains at 415 with resistance at 422 ½, this was previous support.

Bias: Bearish

Resistance:422 ½***, 438 ¾-441***, 462 ¾**, 478-479****

Support: 415 ¼**, 399-402 ¾****, 390-392 ¼**

 

For more information please contact DAW trading at info@dawtradingdiv.com

 

 

Disclaimer:

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. DAW Trading (“DAW”) uses various outside sources for research material regarding futures and options on futures trading therefore the views and opinions expressed in this letter may not necessarily reflect the view of DAW or its staff. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to DAW.

BrokersEDGE 11/1/17 Morning

11/1/17

E-mini S&P (December)

Yesterday’s close: Finished the session at 2572.75.

Fundamentals: The S&P is up 10 points this morning and breaking out to new all-time highs ahead of today’s Fed meeting. November has started off with a bang as major indices across the globe are all largely in the green. The Nikkei is up nearly 2% and the German DAX has extended new all-time highs while the Euro STOXX 50 and 600 are both trading at two-year highs and breaking out. Fresh money is pouring in to start the month with strong earnings and a calming of the Catalonian crisis greasing the wheels. The S&P has followed suit despite House Republicans delaying the release of the tax-reform bill by a day. We also have a huge day ahead with ADP Payrolls due at 7:15 am CT, Manufacturing PMI at 8:45 and ISM Manufacturing at 9:00. The Fed will release a policy statement at 1:00 pm CT and is expected to lay the ground work for a December hike which is already priced in by nearly 100%. We also have Facebook earnings after the bell. Equity markets are moving higher this morning with such conviction it is hard to image what could throw them off and we do not see the Fed pitching a curveball. The bigger wild card remains the tax-reform bill which has clearly bought itself time.

Technicals: There is nothing to fight in this market, the S&P is now attempting to breakout above resistance at the 2581.75 level and eyes its next round number. There are hurdles between now and the end of the week, and we must see a close above 2581.75 in order to maintain an immediate term Bullish bias.

Bias: Bullish

Resistance – 2581.75**, 2595-2600**

Support – 2571.75-2572.75**, 2561.25-2563.25**, 2555.50**, 2439.25-2443***, 2507.75***

 

Crude Oil (December)

Yesterday’s close: Crude settled yesterday at 54.36 but extended gains above 54.45 to a high of 54.86 before the close of the electronic session.

Fundamentals: Yesterday’s API report is about as bullish as you can get; they reported a -5.087 mb of Crude vs -2.1 mb expected, -7.697 mb of Gasoline vs -2 mb exp and -3.1 mb of Distillates vs -2.5 exp. Crude is at the highest level since it opened the year trading to 55.24, price action reached 55.22. Let’s get something clear, this is not just a Crude Oil story, though Crude has its clear catalysts, but this is a global growth story and we can see that with the base metals as well. One of those catalysts from Crude is exports; Brent Crude is trading at a more than $5 premium to WTI and this has allowed for an

arbitrage situation and a higher demand for US Crude abroad. Official numbers from the EIA are due out today at 9:30 am CT and the expectations are for -1.756 mb Crude, -2.128 mb Distillates and -1.506 mb Gasoline. However, it is important to remember the markets true expectations are much higher than this as buyers have already bought because of last night’s API. We must see data from the EIA that is much more in line with last nights in order to break out to new highs on the year.

Technicals: Crude Oil is on a mission to take out this year’s high once it broke out above 53.11 on Friday. We have been calling for this level to be achieved but it is also important to realize how bullish this backdrop is as we now have the Golden Cross with the 50-day moving average above the 200 dma. Furthermore, the market is in backwardation going out to 2022 and this should bring additional support. A close above 55.02-55.25 will encourage the next leg to 58.97. We only remain Bullish/Neutral instead of outright Bullish due to inventory data volatility.

Bias: Bullish/Neutral

Resistance – 55.02-55.25***, 56.51-56.79**, 58.97***

Support – 54.45-54.65**, 53.76-53.90**, 52.86-53.11***, 52.07**

 

Gold (December)

Yesterday’s close: Settled at 1270.5.

Fundamentals: Gold is higher this morning ahead of today’s Fed meeting and as the entire metal complex is seeing a surge. Gold’s support comes from a combination of fundamental and technical forces, but we must not ignore our key four-star support level when looking at the underlying fundamental backdrop. Buyers are stepping in at a key level ahead of today’s Fed meeting but also as uncertainty looms for tax-reform and what develops from the Mueller investigation. Investors are clearly not ok with cutting long equity positions and adding Gold to a portfolio until the metal is no longer constructive has proven to be a great strategy this year, why not continue. We remain long term bullish and the Dollar Index has soared over the last week, but we do not see the Dollar staying higher for longer and expect this to be a key catalyst for Gold’s next leg higher; whether this comes today, this week or a later remains to be seen. ADP Payrolls are due at 7:15 am CT and expectations are at 200k, Manufacturing PMI is due at 8:45 and ISM Manufacturing at 9:00. These will all play a key role for Gold today ahead of the Fed meeting.

Technicals: Four-star support, four-star support, four-star support. We cannot emphasize this rare level enough. Gold has traded to a new high on the week, sticking its head above resistance at the 1280.3-1280.8 level, we want to see a close above this level in order to neutralize the price action over the last week. It is important to remember that all bets are off on a move and close below 1262.8-1269 and the sellers are due to come in.

Bias: Bullish

Resistance – 1280.3-1280.8**, 1286.1*, 1291.3-1292.9**, 1298.4-1300.7**, 1308.4-1312.6**

Support – 1262.8-1269***, 1243.6**

Natural Gas (December)

Yesterday’s close: Settled yesterday at 2.896

Fundamentals: As many commodity sectors are benefiting from the prospects of better global growth, Natural Gas is one that is not. Weather remains a massive headwind and temperatures here in Chicago are supposed to hit 60 degrees for at least one day over the next three. New York City is expected to be in the 70s with a low of 60 heading into the weekend. Prospects of colder weather are around the corner, but the pendulum has swing back and is pricing in a very mild November.

Technicals: Price action took out the Sunday night low and as we discussed yesterday this opened the door for the sellers. We remain long term bullish but cannot defend this position in the near term until we see more clarity or a test into major three-star support at 2.753-2.765.

Bias: Neutral/Bullish

Resistance – 3.012***, 3.051-3.054**, 3.103**, 3.179-3.198***, 3.22**, 3.323-3.36***

Support – 2.961**, 2.753-2.7565***, 2.486-2.522****

 

10-Year (December)

Yesterday’s close: Settled yesterday at 124’30

Fundamentals: Today is what Treasury traders have been waiting for as we kick off with Manufacturing data this morning before the Fed later today. Global equity prices are on a tear this morning with fresh money buying anywhere and everywhere, this has put pressure on Treasury prices. The release of the tax-reform bill has been delayed until tomorrow and this along with any further developments from the Mueller investigation could bring the bulls out of the woodwork. This week is truly just getting started and we know no one has forgotten the announcement of the next Fed Chair as well as Nonfarm Payroll Friday and ISM Non-Manufacturing Friday. We remain neutral until we get through the gauntlet this week and if price action is stable, you can expect us to begin to turn bullish.

Technicals: Resistance at the 125’02-125’035 level is working to keep prices in check, but the real heavy lifting is being down by breakouts in equity indices around the globe. First support comes in today at 124’19 and we are watching this level today because a move below here could accelerate the selling.

Bias: Neutral

Resistance – 125’02-125’035**, 125’19**, 125’255**, 126’01**, 126’15***

Support – 124’19**, 124’00**, 122’22 – 122’29***

 

 

For more information please contact DAW Trading at info@dawtradingdiv.com

 

 

 

Disclaimer:

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. DAW Trading (“DAW”) uses various outside sources for research material regarding futures and options on futures trading therefore the views and opinions expressed in this letter may not necessarily reflect the view of DAW or its staff. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to DAW.

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