Category: BROKERSEDGE

BROKERSEDGE Newsletter

BrokersEDGE Tradable events this week

 

Tradable Events this week

 

 

 

1. U.S. Inflation Data:

 

PPI is due out on Tuesday and CPI (accompanied by Retail Sales) is set to follow on Wednesday. The Fed is expected to hike rates again in December, however, these data points still remain crucial in dictating the Fed’s message/path heading into 2018. Inflation has been arguably the only laggard in a growing economy and this has been well-documented by Janet Yellen and the Fed. For us at Blue Line it is less about the fact that the Fed is hiking and more about the perceived path at which they think they can do so. One year ago, in December, their hawkish hike swung the pendulum of perception; the Dollar traded above 103 and the 10-year treasury traded below 123. These were respectively highs and lows for each market. Treasury prices finished last week on a very weak note and better than expected data would put further pressure on this market heading into the meeting one month away. Furthermore, if you look back to December of 2013, Treasury prices have given traders a great buy opportunity in the latter half of the month and into January. We are looking for a similar setup once again. A miss on these reads does not mean that this trade won’t set up, however, it would immediately support our long term bearish Dollar thesis and further weaken its recent tape.

 

 

 

2. Central Bank Speak:

 

We run into a gauntlet of speak this week and it begins with the Fed’s Harker tonight. The main event is the ECB Panel on Tuesday that will include ECB President Draghi, Fed Chair Yellen, BoJ Governor Kuroda and BoE Governor Carney. The title of the panel is “At the heart of policy: challenges and opportunities of central bank communication”. On Monday the ECB’s Constancio speaks along with Kuroda. On Tuesday Chicago Fed President Evans opens the ECB panel. We also look to a lineup of Fed speakers on Thursday that includes Brainard, Mester, Kaplan, Williams Thursday. Needless to say, there will be an abundance of opinions this week and Tuesday’s panel will be key. The last time we had a panel like this was in July where the Bank of Canada began telegraphing their hike and a tectonic shift began in currency markets. We don’t expect the same type of volatility but the key levels from our FX Rundown should be watched closely.

 

 

 

3. Tax-Reform:

 

Bills from both the House and the Senate remain at the forefront. The House is expected to produce a vote this week. The hurdle remains property tax deductions and the House and Senate are far away; the House wants to leave it at $10,000 while the Senate wants to eliminate it altogether. Another key question mark is the State and Local tax deductions. It is no secret that equity markets have outperformed all expectations. However, if tax-reform fails we expect to see a 3-5% correction at minimum. The reality is though, this correction may not come this year. The S&P has begun to trade in an exhausted fashion and a move below key support at 2561.75-2562.25 should encourage another 20 points. However, look for any pull back to 2539.25-2543 as a buy opportunity and one to ride through the end of the year.

 

 

 

 

 

4. Crude Oil Option Expiration

 

Crude Oil is trading at the highest level since June 2015 and we have not been shy about our bullishness. Still, there is more going on this week than meets the eye. OPEC releases their Monthly Oil Market Report on Monday around 5:00/6:00 am CT and the IEA releases theirs on Tuesday morning. Of course, U.S inventories come into the picture on Tuesday and Wednesday. What some might not be focused on though is the option expiration on Wednesday. The December contract is the most highly traded contract for Crude Oil each year which also means unusually high open interest in the options. After this move, a massive amount of call bets between $50 and $55 have gone in the money. However, there is still large open interest in the $57 calls that are now out of the money and that can keep a lid on price action and open a door for the bears until after expiration. What would hurt the most amount of people is a move down to $55. On the other end, there are large put bets coming into play but the open interest at 55.00, 56.00 and 56.50 does not hold a candle to the call side. What does though is the open interest in the $55 puts; look for weaker price action to stay above here through Wednesday.

 

 

 

5. Big Data:

 

We discussed the inflation data out of the U.S but it does not end domestically. Inflation data from around the world including the Eurozone and the U.K is due on Tuesday. We also have Sentiment data and GDP out of the Eurozone. The EU raised their growth forecast for 2017 last week to 2.2%, this would be the highest in a decade. On Monday night Fixed Asset Investment, Industrial Production and Retail Sales is due out of China. Fixed Asset Investment measures the change in the total spending on non-rural capital investments such as factories, roads, power grids, and property. This is a number that we watch very closely, and we believe that it does not get enough attention. Currencies should see volatility, but traders should also watch the base metals which finished last week on a negative note.

 

 

 

6. Bitcoin:

 

The CME is expected to open trading on Bitcoin futures later this year. Bitcoin was taken to the woodshed this weekend losing about $2000 from its Wednesday high of more than $7700. Earlier in the week another hard fork for the Bitcoin blockchain was called off. The first fork in August created Bitcoin Cash, a now totally different instrument, but one that is more in line with the original vision of Bitcoin. Bitcoin Cash more than tripled over the weekend and overtook the market cap of Ethereum.

 

 

 

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 Newsletter 11-13-17

E-mini S&P (December)

Last week’s close: Settled down 4.50 on the session and down 3.25 on the week at 2579.50.

Fundamentals: There is a lot on the docket this week to shape investor and central bank sentiment. Tomorrow’s ECB panel includes Draghi, Yellen, Carney and Kuroda and it begins just as regional inflation data and GDP is due out of the Eurozone. U.S PPI is also due tomorrow morning. We expect to see some molding of tax-reform and though it is unlikely they will produce a complete flop before the end of the year, investors remain skeptical and this has contributed to a minor pull-back in the S&P. Data out of China is due later tonight at 8:00 pm CT and includes Fixed Asset Investment, Industrial Production and Retail Sales. Do not forget to read our “Tradable Events this Week”.

Technicals: We finished last week incorporating a slight bearish bias for the first time in a while. The factors are not only technical as treasury prices fell sharply to finish out the week as well as the unknown surrounding tax-reform. We have major resistance at 2583-2585.75 and this level has held well coming into this morning. Price action grinded higher throughout Friday’s session but has rejected this level. The bears are in the driver’s seat to start the week but also must be flexible and not married to a position that gets out above this resistance, especially upon more clarity on tax-reform.

Bias: Neutral/Bearish

Resistance – 2583-2585.75**. 2594.50-2596**, 2600*, 2616**

Support – 2573.50-2574.25**, 2561.75-2562.25**, 2555*, 2539.25-2543***

 

Crude Oil (December)

Last week’s close: Gained more than $1 on the week but lost 43 cents on the session Friday, settling at 56.74.

Fundamentals: A big week unfolds out of the gate with OPEC’s Monthly Oil Market Report this morning. Some of the headless are: They revised their 2018 demand up 340,000 bpd from last month. The group’s output fell 150,900 bpd in October. Saudi production increased 83,000 bpd but remains below their target. The IEA releases their monthly report tomorrow and of course, inventories begin to come into the picture later in the day tomorrow. However, our main focus this week is option expiration and how this will ultimately drive the market. The fundamental backdrop has been a major factor in why we have been very bullish. Still, the market remains just as technically driven and the technicals are why we called for higher price action on the breakout above 53.11 and furthermore, above 55.25. December is the most highly traded contract each year and expiration is right around the corner, this means a massive repositioning has already begun. Still, there is tremendous open interest in December options that expire Wednesday and this has kept a lid on price action above the $57 mark.

Technicals: Ultimately, the option landscape opens the door to hurt the most amount of traders on a move back to $55. Now, the 55.02-55.25 level was the breakout and brought tremendous trading volume to a high of 57.92 so the fact that this key support level comes into the picture for multiple reasons makes it that much more attractive. Our first support now comes in at 56.41-56.51 and has held extremely well for the last four sessions but today’s session is working on the third straight lower high and a move below here should open the flood gates.

Bias: Neutral/Bearish

Resistance – 57.92**, 58.97***

Support – 56.41-56.51**, 55.02-55.25***, 54.45-54.54**, 53.76-53.90**, 52.86-53.11***

 

Gold (December)

Last week’s close: The metal gave up much of its gains on the week losing nearly $13 on Friday’s session to finish at 1274.2.

Fundamentals: Though tax-reform is far from achieved, traders are starting to believe that something will be figured out before the end of the year and this has kept a lid on Gold. Furthermore, the prospects of stronger global growth and the EU raising their GDP forecast to the highest in a decade has put pressure on Gold in the face of a weaker Dollar while treasury yields around the world performed very well on Friday. This is a crucial week that is jammed packed with data and Fed speak. Philadelphia Fed President Harker has already spoken and continues to support a December hike, however, he is still using the term “penciled in”. PPI data is due out tomorrow with CPI and Retail Sales on Wednesday. Chicago Fed President gives opening remarks at an ECB panel tomorrow that includes Yellen, Draghi, Carney and Kuroda.

Technicals: Major four-star support has seemingly prevailed once again. We rarely use four stars and regardless of how things play out this week, the level has earned its credence through the month of October. However, it is important to remember that four-stars is only used in a so-to-speak earth-shattering manner; meaning that a close below here would encourage an exodus of longs. The 200 day moving average is grinding higher and now comes in at 1270.3. Key resistance at 1291.3-1292.9 held very well late last week and remains a key hurdle that the metal must close out above in order to squeeze shorts. First, a close back above 1280.5-1281.5 is needed to neutralize Friday’s weakness.

Bias: Bullish

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

Support – 1262.8-1270.3***, 1243.6**

 

Natural Gas (December)

Last week’s close: Settled at 3.213, gaining nearly a quarter on the week.

Fundamentals: Colder temperatures are now the norm and we are in heating season. On the storage report on Thursday, we expect to see levels drawn down from last week. November is typically a turning point for Natural Gas and the bulls are now in the driver’s seat.

Technicals: Price action recovered extremely well last week gaining nearly .25 after the December contract gave up all of its premium to the expired November contact. The technicals turned extremely favorable with a gap higher as the pendulum of perception swung bullishly after pricing in too mild of a winter. A consolidation this week at minimal would be healthy. Resistance at the 3.22 level has kept prices in check and the 3.179-3.198 level will remain critical but ultimately more so on this week’s close. A consolidation lower can be healthy if it stays above first and second support.

Bias: Bullish

Resistance – 3.179-3.198***, 3.22**, 3.297-3.353***, 3.55**, 3.67**

Support – 3.08**, 3.035-3.051** 2.984-2.998***, 2.847-2.861**, 2.753-2.7565***, 2.486-2.522****

 

10-Year (December)

Last week’s close: Lost about half a point on the week, all of which came on Friday as it settled at 124’225.

Fundamentals: Treasuries around the world sold of sharply on Friday ahead of inflation data and the ECB panel this week. The EU raised their growth forecast last week to 2.2% for 2017, the highest in a decade. Eurozone GDP data is due out tomorrow morning. Tax-reform also poses a hurdle to the bull camp; traders do expect something to ultimately be achieved before the end of the year. Getting something done would rev up the growth engine which would theoretically lead to tighter monetary policy. But before we see the growth, there is also likely to be a larger debt burden on the country which means new issues of bonds (a larger supply).

Technicals: Our first support at 124’19 has kept waves of selling in check. We are long term bullish, at least for the next six months, however, we have crafted a very cautious picture in the near term. This price action is exactly what we want to see; for sellers to come in now and into the Fed’s December hike as this is when we expect the buying opportunity to present itself. Don’t forget to read our “Tradable Events this Week” for more details.

Bias: Neutral

Resistance – 124’31-125’015**, 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 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 Newsletter 11/9/17 Grains

Attention: USDA report 11 am CST

CORN (December)

Yesterday’s Close: December corn futures finished yesterday’s session unchanged, spending the day in a 3 ¼ cent range. Funds were estimated buyers of 2,000 contracts.

Fundamentals: Today is the day that many market participants have been waiting for. Will today’s USDA report be the catalyst to give the market new direction? We are trying to temper our expectations but are hopeful like most everyone else that we will start to see more activity. The average estimates for the corn yield are at 172.3 bushels per acre. The average estimate for harvested acres comes in at 83.1. The average estimate for production comes in at 14.323 billion bushels. These are compiled in a convenience table below. Yesterday’s weekly ethanol report showed production was up 1,000 barrels per day to 1,057. This morning’s export sales came in at 2,364,500 mt which was a strong read with Mexico being the top buyer.

Technicals: Todays USDA report could be the catalyst to give the market a break out or a break down. The market has been in a sideways range for the past two months which has sucked volatility out of the market making call/put options compelling here from the speculative and hedge side of things. First technical resistance comes in at 351 ¼, but 355 ¼ will be the more significant level for the bulls to close above. If they can achieve this, we could start to see funds cover their near record short (for this time of year). On the flipside, last week’s lows at 345 ¼ is the first support level, this held by a hair yesterday which keeps higher lows in play. Although we are “neutral”, we are the report to the long side for clients who want to be more aggressive with positioning.

Bias: Neutral

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

Support: 342 ½-345 ¼**, 334-335 ½***

SOYBEANS (January)

Yesterday’s Close: January soybeans closed a pair of pennies higher yesterday, trading in a range of 4 ¾. Funds were estimated to have been buyers of 2,500 contracts on the day.

Fundamentals: Today is the day where we get updated world supply and demand numbers from the USDA. The average analyst estimate for US soybean yields is 49.2, harvested acres at 89.4, and production at 4.404. We have been talking about attention turning towards South America post report, so we will want to monitor their production numbers too. Argentine soybean production is expected to fall 3.mmt to 56.7mmt. The Brazilian soybean production is expected to increase .3mmt to 107.3 mmt. We have a convenience table below for your convenience. Export sales this morning came in at 1,160,600mt, this was on the low end of high expectations with China being the top buyer.

Technicals: The chart has been very constructive over the past two months with prices continuing their trend of higher highs and higher lows. Top end of our technical resistance pocket comes in at 1004 ¾, if the bulls can achieve a close above it will open the door to an extension towards 1021 ½. If we receive a bearish report, we could see prices trade back towards trendline support which has worked its way higher to 991. A break below trendline support will not change the bias as we see significant support all the way down to 979 ¾. So how do you trade such a wide range of technical support? Break your orders up and scale in.

Bias: Bullish

Resistance: 999 ¼-1004 ¾**, 1014**, 1021 ½****

Support: 991**, 979 ¾-980 ¾***, 968 ¼****, 957-963 ¼****

WHEAT (December)

Yesterday’s Close: December wheat futures closed ¾ cent lower yesterday, trading in a 8 ½ cent range. Funds were estimated to have been buyers of 500 contracts on the session.

Fundamentals: We have a USDA report out this morning which will likely confirm ample supplies. US wheat carryout is estimated at .956 with a range of .940-.987. We will also want to be watching price action in corn and beans as it could spill over into the wheat trade. Export sales this morning came in at 781,800mt which was above expectations and the highest read we’ve seen in a while. This goes back to what we talked about the other morning with regards to low prices curing low prices. Wheat bulls will want to see this become a trend not just a one off.

Technicals: Technicals remain bearish, but wheat bulls and bottom pickers can point to a recent sideways trade and nice reversal yesterday as signs that a bottom may be in the process. Yesterday’s lows of 419 will be important to hold going forward. First technical resistance comes in at 431 ¼ today, a break above would mark higher highs on the back of higher lows which would be a start to changing the tide. 438 ¼ remains the significant level we are watching, this represents the 50-day moving average, an indicator we have not closed above since July.

Bias: Bearish

Resistance: 431 ¼**, 438 ¼*** 443***, 462 ¾**, 478-479****

Support: 419**, 415 ¼**, 399-402 ¾****, 390-392 ¼** Range of Estimates Average Estimate Actual
Corn Production 14.127-14.459 14.323
Corn Yield 170-174 172.3
Corn Acres Harvested 83.1-83.5 83.1
Soybean Production 4.340-4.467 4.404
Soybean Yield 48.5-49.9 49.2
Soybean Acres Harvested 88.5-89.5 89.4

 

 

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 Newsletter 11/9/17 Morning

E-mini S&P (December)

Yesterday’s close: Recovered well off session lows and settled at 2591.

Fundamentals: Equity markets are a little lower heading into this morning and tax-reform is on everyone’s mind as the week begins to wind down. The House Ways and Means Committee is working to redraft their bill and Senate Republicans are said to introduce a completely different bill today. The market has taken this in stride and worked off session lows early yesterday. President Trump introduced $250 Billion in China deals which sounds great on the surface but anything that lacks details and is hailed as a ‘miracle’ by the other side does present question marks. Chinese CPI last night was mixed while PPI was better than expected. We have a lot of ECB speak through our hours and comments from Board Member Coeure were hawkish as expected. The EU’s Executive Commission put out its GDP forecast and this year’s raised estimate of 2.2% would be the highest since 2007. However, growth will taper off next year to 2.1%. Initial Jobless Claims are due at 7:30 am CT.

Technicals: Price action traded to a new all-time high of 2594.50 last night around the time of Chinese data, however, the tape has bled lower into this morning. The trend line from the 2541.50 low we discussed yesterday now comes in at 2579 this morning and closely aligns with the 2581.75 as well as yesterday’s session low. This will be the support level to watch on the session and a move below here should encourage a push to 2573.50-2574.50. We are now neutralizing our stance and would like to see consolidation lower before looking to step back in.

Bias: Neutral

Resistance – 2594.50-2596**, 2600*, 2616**

Support – 2579-2581.75**, 2573.50-2574.25**, 2568*, 2561.75-2562.25**, 2555*, 2539.25-2543***

Crude Oil (December)

Yesterday’s close: Settled at 56.81, more than a dollar from new highs.

Fundamentals: Yesterday’s EIA report was more on the bearish side as the headline read showed a build of 2.2 mb of Crude when a draw of 2.9 was expected. However, the products combined for a draw of 6.7 mb when only a draw of 3.4 was expected. Production picked up in the tune of 67,000 bpd and exports which have led headlines fell sharply. There is a geopolitical premium trying to work its way into the market and this coupled with recent momentum has encouraged buyers at every pullback.

Technicals: Support at 56.51-56.79 has worked tremendously to keep the immediate term trend intact. Yesterday’s session low was 56.41 shortly after the EIA read and before a spike to new highs at 57.92. Price action continues to hold well, hugging the $57 mark, but bulls want to begin to exude caution through today’s session and look for a low to come in overnight heading into Friday.

Bias: Bullish

Resistance – 58.97***

Support – 56.51-56.79**, 56.18*, 55.02-55.25***, 54.45-54.54**, 53.76-53.90**, 52.86-53.11***

Gold (December)

Yesterday’s close: Gained almost $8 on the session to settle at 1283.7

Fundamentals: Tax-reform is in the spotlight with the House Ways and Means Committee redrafting their bill and Senate Republicans said to release their own version. A failure to show progress this week will help boost Gold. President Trump’s $250 billion in China deals have grabbed headlines but is doing very little to help equity markets. Traders should keep an eye on the S&P and weakness will bring support to the metal. Initial Jobless Claims are due at 7:30 am CT. Michigan Consumer Confidence is due out tomorrow morning.

Technicals: Price action settled clearly above resistance at the 1280.5-1281.6 level and now eyes the 1291.3-1292.9 level in order to begin to squeeze shorts ahead of the weekend. The session high comes in at 1289 and we want to see follow through on the session in order to hold this positive momentum. The bears look to reject resistance and suppress price action back below 1280.5-1281.2, which includes the 100-day moving average, to regain an edge.

Bias: Bullish

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

Support – 1280.50-1281.2**, 1262.8-1269***, 1243.6**

Natural Gas (December)

Yesterday’s close: Settled at 3.175

Fundamentals: Storage data comes squarely in the picture today as price action battles against major three-star resistance. Estimates have edged higher and at +15 bcf. We are at that time of year and price point (not to mention on resistance) where a surprise draw would be a huge catalyst to the upside. Among President Trump’s China deals is natural gas project in Alaska, this shows a strong commitment to the sector and regions (the struggling Alaskan state and doing business with China).

Technicals: Major three-star resistance at 3.179-3.198 is working to keep price action in check ahead of today’s data read. We maintain our bullish bias but a close above here is needed to ignite a move to 3.297-3.353. A close on the week back through the gap and below major three-star support will signal a failure. Price action must continue to build a shelf above 3.033-3.05 in order to remain constructive on the week at a bare minimum.

Bias: Bullish

Resistance – 3.179-3.198***, 3.22**, 3.297-3.353***

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 lower at 125’08

Fundamentals: Prices grinded lower through yesterday’s session and after the 10-year auction produced a bid-to-cover ratio of 2.48. Other safe-haven assets are performing much better in the last to 12-24 hours. Tax-reform will be front and center to finish out the week and hurdles here would help the 10-year against support. Initial Jobless Claims are due at 7:30 am CT and tomorrow brings Michigan Consumer data to round out the week.

Technicals: Yesterday we spoke of staying nimble and that the market is showing signs of exhaustion. Price action is testing first key support this morning and traders should keep an eye on a weaker U.S dollar to help bring support against this level. However, a close below this level to finish out the week could easily begin a grind back to recent lows and into the Fed meeting one month away.

Bias: Neutral/Bullish

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 Newsletter 11/9/17 Recap

Euro (December)

Session close: Gained more than one third of a percent on a session.

Fundamentals: The day started with a solid read on German Trade Balance and an EU Forecast that revised GDP up to 2.2% on the year, the highest since 2007. ECB Board Member Coeure spoke hawkishly and all of this kept a floor under the Euro trade. However, as the session unfolded the real driver for today’s move became tax-reform in the U.S. as the Senate released their version of the bill. The Dollar gave up recent gains with the Index trading at the lowest level of the week. The S&P was down 1% before lunch but ultimately recovered as worries subsided ahead of the close. There is nothing out of the Eurozone to finish out the week and the trade will be dependent on Washington and Michigan Consumer Confidence due at 9:00 am CT.

Technicals: The session high came in at 1.16775 and resistance at the 1.1671 level will be key to watch to finish out the week. Ultimately, the real level the bulls need to achieve a close out above is three-star resistance at 1.1705-1.1722 which would more than neutralize recent weakness and begin to spark a short covering rally, and every rally starts with a short cover. The session low was 1.16085 and this is the second higher low in a row. We will continue to watch the 1.1622-1.1639 level and a close back into here would be very disappointing to finish out the week. We are getting more bulled up and in line with our longer term bullish thesis now that the market is back above this level.

Bias: Bullish

Resistance – 1.1671**, 1.1705-1.1722***, 1.1772**, 1.1837-1.1850**, 1.1921-1.1933***

Support – 1.1622-1.1639**, 1.15785*, 1.1481-1.15***

Yen (December)

Session close: Gained 43.5 ticks on the session and finished at .88475

Fundamentals: The Yen was supported by the weaker Dollar and uncertainty surrounding tax-reform. The Bank of Japan will stay the course with their easy money policy, but this is already known and for the most part, all priced in. The wild-card remains a weaker Dollar, which we believe in, and a geopolitical event that sparks safe-haven buying.

Technicals: Price action has settled above the key three-star level at .8800-.8828 and is beginning to round out a bottom; it needs to stay above the 21-day moving average at .8837 in order to continue to do so. Speculators have already established their short position so if the Yen can continue to grind higher we could see a short-covering rally here bigger than any other currency paired against the Dollar. We now have two levels noted as major three-star resistance, the first is at .8971-.8980 and the second encompasses the 200-day moving average at .9023-.9045; it is hard to decipher which will be stronger but a above here should do the trick.

Bias: Bullish

Resistance – .8868-8879**, .8971-.8980***, .9023-.9045***

Pivot- .8800-.8828***

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

Aussie (December)

Session close: Gained 5 ticks

Fundamentals: The Aussie was a laggard on the session and this could also be seen in the base metal complex. Nickel was hit hard today and Palladium traded to a new swing high, the highest level since 2001 before reversing gains to settle nearly 2% from here. The RBA policy meeting minutes are due out at 6:30 pm CT tonight.

Technicals: Price action traded to a high of .7690 but the lack of follow through today is disappointing and begins to neutralize our outright Bullish shift yesterday as major three-star resistance at .7717-.7725 remains a clear headwind. It is important to stay nimble.

Bias: Neutral/Bullish

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

Pivot – .7673

Support – .7622***, .7550**, .7390****

Canadian (December)

Session close: Gained 33 ticks and finished three ticks from the high of the session at .78935.

Fundamentals: The Canadian is strengthening off over-emphasized poor fundamentals over the last two months and has quickly become the prime beneficiary of a weaker Dollar. The currency is also seeing strong support due to gains in Crude Oil. We remain bullish.

Technicals: Let’s take a look at some of the negatives at the moment as it is best to do so when the position feels rosy. The RSI is now at the highest point since the end of September and this can signal that the rally may be due for a stalling consolidation. Furthermore, though the net long position has been reduced from its 5:1 ratio, it is still slightly greater than 3:1 and you only have to go back to August 22nd to find this few longs. To be clear, we are playing devil’s advocate here and remain bullish. Major three-star resistance comes in at .7920-.7954 and is our intermediate term target.

Bias: Bullish

Resistance –.7920-.7954***, .8019-.8035**, .8293****

Support – .7851-.7856**, .7745-.7790***, .7671**, 7550***

 

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 Newsletter 11/10/17 Morning

E-mini S&P (December)

Yesterday’s close: Lost 8 ticks on the session but recovered nearly 1% from lows yesterday to settle at 2584.

Fundamentals: Tax-reform remains front and center to finish out the week and the House Ways and Means Committee advanced a bill that the full House will vote on next week. The Senate is still on their own track with a bill introduced yesterday and is expected to be marked up Monday. For traders, the process is dizzying and ultimately has encouraged profit taking, not to say there are not buying opportunities intraday. Treasury yields have edged up firmly to into this morning and yields in China remain at three-year highs. The Chinese central bank had to again inject liquidity to loosen monetary conditions. Yields in the U.S began climbing after the 30-year bond auction yesterday but have risen well overnight. This could simply be an overreaction/repositioning to the long-side (of prices) following the Fed meeting and an ensuing relief of a potential geopolitical flare-up (Saudi and Trump in Asia). Whatever the reason might be, this is something to watch closely. Michigan Consumer data is due at 9:00 am CT today.

Technicals: Price action traded to a low of 2563.25 yesterday and with each test to this key support, the level itself gains importance. However, we are not ready to make it a major three-star level, but understand that a move below here should open the door to 2539.25-2543. Session highs come in at 2585.75, yesterday’s settle at 2584 and the trend line we have discussed the last two days is now at 2583; major resistance now clearly comes in at 2583-2585.75 and the bulls must achieve a close above here in order to regain the upper-hand. The bears have a slight edge but must keep price action depressed below 2573.50-2574.25 in order to clearly see this. We neutralized our bias yesterday and now that price action could not maintain yesterday’s close among other factors we give a Neutral/Bearish bias.

Bias: Neutral/Bearish

Resistance – 2583-2585.75**. 2594.50-2596**, 2600*, 2616**

Support – 2573.50-2574.25**, 2561.75-2562.25**, 2555*, 2539.25-2543***

Crude (December)

Yesterday’s close: Gained 37 cents on the session to 57.17

Fundamentals: Crude remains constructive heading into the weekend and on the surface we do not see the picture painted this week to change ahead of it. The November 30th OPEC meeting is on everyone’s calendar, but we must not forget that OPEC’s Monthly Oil Market Report is due out Monday morning and the IEA’s is due out Tuesday. Furthermore, Chinese data is not through yet and comes into the picture Monday evening and December option expiration is Wednesday. December is the most active of any contract and large open interest could work to tighten up price ranges barring any fundamental surprises. Oil rigs have dropped 39 since recovering to a peak in August, today’s data is due at noon CT.

Technicals: We remain bullish ahead of the weekend but are becoming more cautious after a strong run and as RSI has remained above 70 for more than a week now. In the near-term, we could now actually make the argument to sell to go short against 58.97, though not before Sunday’s reopen. Key support at 56.51-56.79 is holding tremendously but a move below here would encourage profit taking from the longs. We also long forward to today’s CoT report, especially since price action has been rangebound since Tuesday’s cutoff.

Bias: Bullish/Neutral

Resistance – 58.97***

Support – 56.51-56.79**, 56.18*, 55.02-55.25***, 54.45-54.54**, 53.76-53.90**, 52.86-53.11***

Gold (December)

Session close: Settled at 1287.5, the highest since October 19th.

Fundamentals: The problem with Gold right now is that there is no real catalyst. Don’t get us wrong, the potential for a catalyst is literally right around the next corner. The Dollar has retreated nearly 1% from recent highs and the catalyst that we lean on most, for the long-run, is a weaker Dollar. We may not see the Dollar take out the 92 level again this year, but we anticipate this feat in the first quarter of next. Michigan Consumer data is due at 9:00 am CT and ‘tax-from’ is today’s happy hour drinking work.

Technicals: Key resistance at the 1291.3-1292.9 level has kept price action in check and the bulls must achieve a close out above here in order to begin to squeeze shorts. It will be key to keep the tape above support at the 1280.5-1281.2 level which would leave the door open for strong price action to start next week.

Bias: Bullish

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

Support – 1280.50-1281.5**, 1262.8-1270***, 1243.6**

Natural Gas (December)

Yesterday’s close: Settled at 3.20

Fundamentals: Yesterday’s inventory report was in line with expectations showing a +15 bcf. This is expected to be peak storage and going forward inventories would be drawn down. Prices might have gotten a little out in front of themselves with this turn expected but a healthy consolidation would be a great appetizer to a colder than expected winter.

Technicals: We remain bullish and yesterday’s close above major three star resistance was important, however, it was not convincing. We would like to see a green day to finish out the week. Resistance at the 3.22 level is working to keep the tape in check. Bulls must be careful because a very healthy consolidation here could lead to a test of 3.08 before bouncing back firmly.

Bias: Bullish

Resistance – 3.179-3.198***, 3.22**, 3.297-3.353***, 3.55**, 3.67**

Support – 3.08**, 3.035-3.051** 2.984-2.998***, 2.847-2.861**, 2.753-2.7565***, 2.486-2.522****

10-Year (December)

Yesterday’s close: Settled at 125’06

Fundamentals: Yields (inverse to price) are mostly higher across the world this morning. The 10 year (price) put in a high yesterday after the 30-year auction and it has continued to bleed into this morning despite a weaker Dollar and equity market. China’s 10-year yield remains at three year highs as monetary conditions have tightened (and countered with liquidity injections). Michigan Consumer data is due at 9:00 am CT today.

Technicals: We moved closer to Neutral yesterday with a Neutral/Bullish and today are outright Neutral. Price action took out first key support at 125’02-125’35 and the bulls must achieve a close back above here to neutralize weakness. First key support comes in at 124’19 and this appears to be in reach early next week.

Bias: 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 Newsletter 11/10/17 Grain

 

CORN (December)

Yesterdays Close: December corn futures closed 5 ½ cents lower, trading in a range of 9 cents on the day. Funds were estimated sellers of 26,000 contracts.

Fundamentals: The USDA report has come and gone leaving the perma-bulls in a dark place. Yesterday’s USDA report showed a projected yield of 175.4 bushels per acre, this was not only above the top end of analyst estimates, but would also be a new record yield. Nebraska and Michigan were the only states that saw a revision lower from the October estimates. 14 out of the top 20 producing states are set to out yield last year’s crop. Keep in mind that though harvest is nearly complete, these are not final and subject to change in the coming months. In fact, we have seen revisions lower from November to January each of the last four years. Corn production came in at 14.578 billion bushels, above the high end of estimates at 14.459. US ending stocks came in at 2.487 billion bushels, also above the high end of estimates at 2.438 billion bushels. Attention will start to turn towards South America where they continue to plant. Their production estimates were in line with expectations. Argentina is 35% planted, this is slightly behind their average pace.

Technicals: The market had been looking for a fundamental catalyst for a break out or a break down for the past two months. There is no disputing that yesterday’s report was bearish, but the price action was certainly interesting. If you were just watching the tap for 10 minutes following the report you would have thought it was a neutral number with prices dipping but then trading back to pre-report prices. Many read this as: if they cant break the market on such a bearish number the funds are out of powder. Anxious and impatient got sucked into the market only to watch prices bleed lower throughout the afternoon. New contract lows and new closing lows could lead to more pressure down to 335. Lower highs and lower lows keep the bears in control. Remember: The only thing you get from picking bottoms is stinky fingers.

Bias: Bearish

Resistance: 350 ¾**, 355¼***, 360-362***

Support: 334-335 ½***, 323-325 ¼**

SOYBEANS (January)

Yesterdays Close: January soybeans closed 12 cents lower, trading in a range of 24 ¾ cents on the day. Funds were estimated sellers of 12,000 contracts on the session.

Fundamentals: Yesterdays USDA report was more neutral than price would lead you to believe. Yield estimates pre-report were from 48.9-49.9, USDA came in at 49.5 bushels per acre. Of the 20 top producing states, eight states saw a decline in yields, five states saw increase in yields, and seven were left unchanged; bringing the net to unchanged from last month. Production came in at 4.425 billion

bushels, this was also within the range of estimates from 4.375-4.467 billion bushels. Ending stocks came in at 425 million bushels, this compares to the range from 377-461 million bushels (average estimate of 420). South American production numbers were relatively neutral. Weather conditions and crop development in Brazil and Argentina will be the main focus over the intermediate term.

Technicals: The chart has been a compared to a modern-day Picasso as of late, holding trendline support from the August lows multiple times over the past several months. Yesterday’s price action did do some damage, but the bulls remain in control. As mentioned in yesterday’s report, we see good support in the market from 980-984 ½. This pocket represents the 50% retracement from the June lows to the July highs; it also contains the 50, 100, and 200 day moving average. If the market closes below this support pocket, we could see a flush down to 968 ¼. If you are interested in the long side this is the spot to look at working orders. If you are in the bear camp, this is will you will want to reduce. If you have questions with regards to how to use the technical levels, we publish please let us know.

Bias: Bullish

Resistance: 999 ¼-1004 ¾**, 1014**, 1021 ½****

Support: 980-984 ½***, 968 ¼****, 957-963 ¼****

WHEAT (December)

Yesterdays Close: December wheat futures closed 3 ¼ cents higher, trading in a range of 8 ¼ cents on the day. Funds were estimated to have been buyers of 4,000 contracts on the session.

Fundamentals: Wheat futures held well considering the heavy pressure in corn and beans following yesterday’s USDA report. Ending stocks for wheat came in at .935 billion bushels, this was a hair below the low end of estimates from .940-.980. World ending stocks came in at 267.53 million metric tons, this was within the estimated range from 261-269 million metric tons. On top of that, we saw good export sales in the morning! Export sales came in at 781,800 metric tons, this was a marketing year high and topped the high end of (low) expectations with Iraq being the top buyer. Wheat bulls will want to see higher exports become a trend in order to put a floor in this market.

Technicals: We have posted higher lows on the week and look to be on the verge of higher highs if we can see follow through above 431 ¼. This will be a start in forming a sturdy base, but the bears will remain in control until we start seeing consecutive closes above resistance from 438 ¼-443. A failure to breakout could lead to new contract lows over the intermediate term. If the market is able to get back out above resistance in the near future, we could see funds start to reduce some of their short position.

Bias: Bearish

Resistance: 431 ¼**, 438 ¼*** 443****, 462 ¾**, 478-479****

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

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 Newsletter 11/8/17 Grains

CORN (December)

Yesterday’s Close: December corn futures closed ½ cent lower yesterday, spending the entire session in a 2-cent range.

Fundamentals: We saw an export sale of 130,000 metrics tons for delivery to “unknown destinations” yesterday, this is for shipment in the 2017/2018 marketing year. Today is Wednesday which means we will get our weekly EIA ethanol report, we will have those numbers in tomorrow’s report. A Ukrainian analyst lowered their domestic production for 2017 due to weather affecting yields. Their estimate is for production to be at 25.5 million metric tons, this is a decrease of 500,000 metric tons. The focus for the remainder of the week will likely be on Thursdays USDA report which will be released at 11 am cst. With volatility so low, this may be an opportunity to look at some different option strategies for hedging or speculating, get a hold of us to discuss this in more detail. The average analyst estimates for yields come in at 172.4 bushels per acre, this is up .6 from the last WASDE report (World Agricultural Supply and Demand Estimates). Post report, attention will move to South America where planting rolls onwards and the crop starts to develop.

Technicals: The 50-day moving average is starting to flatten out but still subtly drifting lower. This has been a big resistance indicator for us over the past two months and will continue to be. This comes in at 351 this morning, but the significant resistance level we are now eyeing is 355 ¼. A close above 355 ¼ could encourage funds to reduce a portion of their very large net short position. On the support side of things, last week’s lows will be pivotal for chart watchers. Last week’s lows come in at 345 ¼, a break and close below will likely lead to new contract lows. Market participants are hopeful that this week’s USDA report could be the catalyst for a breakout or a breakdown, anything but a continued sideways trade.

Bias: Neutral

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

Support: 342 ½-345 ¼**, 334-335 ½***

SOYBEANS (January)

Yesterday’s Close: January soybean futures closed up 2 ¼ cents yesterday, trading in a range of 7 ½ cents on the session.

Fundamentals: Thursdays USDA report will be the focus for the remainder of the week. With volatility so low, this may be an opportunity to look at some different option strategies for hedging or speculating, get a hold of us to discuss this in more detail. The average analyst estimate is for yields to come in at 49.3 bushels per acre, this would be a decrease of .6 bushels per acre from the October WASDE report. We will have a convenience table for you before and after the report. After the report is released, will continue turning towards South America where they continue to plan and start to enter their crop developmental stages. Weather will be the hot topic for Argentina and Brazil.

Technicals: January soybeans are seeing some follow through in the early morning trade but are right up at our resistance pocket from 999 ¼-1004 ¾. As mentioned in yesterdays “Closing Comments”, this is an opportunity to reduce some long exposure; if you’re a producer that means looking at some hedges knowing that there is a USDA report on Thursday this is the prudent thing to do. If the market can achieve a close above, we could make a run towards 1021 ¼. If we get a bearish report, we could see long liquidation from funds press us back towards technical support. Bulls will remain in control so long as 979 ¼ holds on a closing basis, a break and close below will change our bias.

Bias: Bullish

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

Support: 989**, 984 ¾**, 979 ¼-980 ¾***, 968 ¼****, 957-963 ¼****

WHEAT (December)

Yesterday’s Close: December wheat futures closed 3 ¾ cents lower yesterday, trading in a 7-cent range on the session.

Fundamentals: Improving crop conditions put some pressure on prices yesterday on thoughts that we could get better than expected yields. This would come on top of a well-supplied global market with dismal demand. Export sales will need to come in much better in an order to stop the slow bleed lower. Low prices cure low prices so at some point one would think that lower prices would stoke up some global demand. We are by no-means suggesting the bottom is in, just pointing out a silver lining in market where there hasn’t been much good to say.

Technicals: Technically the market remains weak, the bears will remain in control until the bulls can achieve consecutive closes above technical resistance represented by the 50-day moving average. The 50 day comes in at 438 ¼ this morning, this is an indicator we have not seen the market close above since July. 422 ½ is first technical support this morning, a break and close below could lead to yet another new contract low.

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 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 11/8/17 Morning

E-mini S&P (December)

Yesterday’s close: Finished down 2 ticks at 2586.75

Fundamentals: Equity markets began to slip from record highs yesterday afternoon as President Trump’s Asian trip heated. Heading into today investors should be concerned with a potential slowdown of tax-reform; it is said that Senate Republican Leaders were considering holding cuts back one year. We must not forget that much of the last couple innings in this stock market bull rally are on prospects that tax-reform will get passed before the end of the year; though a delay might not hit the market before the end of the year, we could see a mass exodus in January. Geopolitical tensions are also on the rise after President Trump spoke in South Korea and targeted North Korea in some of his toughest language yet, calling for unification by denying them “any form of support, supply or acceptance”. He arrived in China today. The FANG Index on ICE launches today and when we see this at such a late stage in a bull market we must ask ourselves is it arriving late to the party?

Technicals: Price action traded to a low of 2579.75 and has battled against first support at 2581.75. We will still watch this level on a closing basis and the bulls want to keep it marked above here in order to remain in the immediate-term driver’s seat. However, there are two levels we are watching below here, the first is a trend line from the 2541.50 level and is rising but comes in this morning at 2576.50. This level will align with 2581.75 by the end of the session and if it holds will give the bulls an edge into tomorrow. Below here is another key support level at 2573.50 and price action must remain above here in order to keep its near-term uptrend; a close below here will likely open the door to further selling.

Bias: Bullish/Neutral

Resistance – 2596-2600**, 2616**

Support – 2581.75**, 2576.50**, 2573.50**, 2567.50*, 2561.25-2562.25**, 2553.75*, 2539.25-2543***

Crude Oil (December)

Yesterday’s close: Settled down 15 cents at 57.20

Fundamentals: Oil grinded lower through much of a quiet session yesterday after extending to a new high of 57.69 overnight. It came under pressure after the API released their report at 3:30 pm CT and did not show as big of a build as expected coming in at -1.562 mb. Gasoline built about half a million barrels when expectations were for -2.25 mb though Distillates declined 3.133 mb against expectations of -1.8 mb. Chinese Trade Balance data last night showed that imports fell to a one year low and this has kept prices under a little pressure coming into today. Still, caution around the Saudi situations is working to offset negativity. The official EIA report due today expects -2.876 mb Crude, -1.372 mb Distillates and -1.938 mb Gasoline. Production data will be key but imports and exports which respectively set all times lows and highs on last week’s data will be just as important.

Technicals: Price action is testing into first key support at 56.51-56.79 and if you have capitalized on this run it is prudent to take something off table ahead of inventories if you have not already ahead of yesterday’s API. Our upside target is still 58.97 but we are traders, but this is just simple risk management.

Bias: Bullish

Resistance – 58.97***

Support – 56.51-56.79**, 56.18*, 55.02-55.25***, 54.45-54.54**, 53.76-53.90**, 52.86-53.11***

 

Gold (December)

Yesterday’s close: Gold lost almost $6 and settled at 1275.8

Fundamentals: The Dollar was strong to start the session and better than expected JOLTs put pressure on the metal. However, President Trump’s Asian trip heated up with when he spoke in South Korea parliament and made some of his toughest comments against North Korea yet and asked for unity against them. Tax-reform has also seemingly hit a road block as Senate Republicans might delay implementation one year. And before you know it Gold was revived from an extremely disappointing session, one that came on the heels of a great start to the week.

Technicals: We remain long term bullish as Gold builds a very constructive pattern above major four-star support, however, we still must see the catalyst that gets this thing above 1291.3-1292.9 to force short covering and spark a run through 1300. The Dollar Index stuck its head above the 95 mark but has shown signs of fizzling, this would be a great catalyst. First, we must see Gold regain resistance at the 1280.5-1281.6 level to neutralize yesterday’s weakness.

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 3.152

Fundamentals: Storage estimates this week show a build of 8 bcf. We still believe that winter forecasts are too moderate and underestimate its potential. If tomorrow’s number proves to be correct or even below here, this would be a strong catalyst to buy as this should be the last week that inventories build.

Technicals: Price action is running into major three-star resistance at 3.179-3.198 and traded to a swing high of 3.176 yesterday. Also to note is the 100 day moving average comes in at 3.161. The 50 day moving average comes in just below here at 3.133 and for the December contract the 50 has not traded above the 100 since June. We would not be surprised to see a little profit taking ahead of tomorrow’s data but believe the bulls are ultimately in the driver’s seat for this one.

Bias: Bullish

Resistance – 3.179-3.198***, 3.22**, 3.30-3.36***

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 125’135

Fundamentals: While other safe-haven assets began to see pressure early yesterday, the 10-year stayed steady. Still the market is stalling below resistance but a reinvigorated geopolitical premium after Trump’s address in South Korean parliament directed at North Korea and a building wall of worry around tax-reform the 10-year bulls have a slight edge.

Technicals: We remain long term bullish though staying nimble for now is the more prudent trade. With downward pressure each of the last two years in December following a rate hike, patience for the bull camp should prove to be a smart play. First major resistance comes in at 125’19 and this has proved to be a tough level to crack. However, the 50 and 100 day moving averages come in between first and second resistance and build a strong and tough pocket between first and second resistance, trade accordingly.

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 11/7/17 Recap

Euro (December)

Session close: Finished down 20.5 ticks at 1.1612

Fundamentals: Weakness in the Euro has persisted since the ECB and the second wave began Friday. The currency saw further pressure early this morning after German Industrial Production came in very poorly. Eurozone Retail Sales was a bright spot, but technical selling took precedent and price action traded below 1.16 and to the lowest level since July 20th. Fed Chair Yellen spoke this afternoon and didn’t say anything of note to the currency trade. Hopes on tax-reform have added strength to the Dollar though the Index struggled to hold session highs.

Technicals: The Euro traded to a session low of 1.15785 but parred more than half its losses before the end of the session. To us, this is not a convincing close below key support at 1.1622-1.1639. We would be lying to ourselves by denying relevant weakness, so traders must remain nimble and ultimately it would be prudent to wait until a close back above 1.1639 before repositioning bullishly for the long haul. A continued close below this level will give the bears the opportunity to remain in the driver’s seat.

Bias: Neutral/Bullish

Resistance – 1.1655*, 1.1671**, 1.1705-1.1722***, 1.1772**, 1.1837-1.1850**, 1.1921-1.1933***

Pivot – 1.1622-1.1639**

Support – 1.15785*, 1.1481-1.15***

Yen (December)

Session close: Settled down 7.5 ticks.

Fundamentals: There was not a lot of new news today on the Yen front. President Trump continues his Asian trip and is pushing for a nuclear deal against North Korea, this along with progress on tax-reform has continued to support the Dollar. Weakness in the Yen has persisted due to the Bank of Japan’s commitment to easing.

Technicals: Today was somewhat of a disappointment for the bull camp as price action failed to follow through on yesterday’s reversal, however, price action did manage to finish on the top end of its daily range. After a swift move below major three-star support at the .8800-.8828 level, price action has continued to cling to this level without completely failing nor closing back out above it. We must continue to watch this level on a closing basis for a nod to the bull or bear camp.

Bias: Neutral/Bullish

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

Pivot- .8800-.8828***

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

 

Aussie (December)

Session close: Finished unchanged

Fundamentals: The RBA left rates unchanged last night which was expected. However, the Aussie has been under pressure since a knee jerk reaction higher on the announcement. Traders brace for Chinese Trade Balance overnight.

Technicals: Major three-star resistance continues to stand strong and last night’s spike following the RBA decision was rejected by this level with a high of .7698. The session low comes in at .7624, three ticks above the October 27th low and a retest to major three-star support at .7622. The bears have a clear edge right now but must achieve a close below support to open the door for further waves of selling.

Bias: Neutral/Bullish

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

Pivot – .7673

Support – .7622***, .7550**, .7390****

Canadian (December)

Session close: Lost 40 ticks on the session.

Fundamentals: Bank of Canada Governor Poloz remained neutral on rates this afternoon by signaling the central bank is monitoring wage gains and inflation and how the economy is adjusting to back to back hikes. The extremely negative data has recently begun to show a light at the end of the tunnel and if this continues, the Canadian will prove to be a strong buy at this level as a hike could come into the picture in the first quarter of next year.

Technicals: This was a disappointing session for the bull camp, but price action has seemingly stabilized against major three-star support. A reversal into tomorrow should prove to pick up steam and help solidify a longer-term bottom. If price action gets out above .7918-.7939 we believe all the longs that jumped ship over the last month will be chasing back in and create a strong bullish leg higher. However, buyers must be nimble on a close below major three-star support.

Bias: Bullish

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

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

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