Tag: ice exchange

Breaking Grain market new- BrokersEDGE 2-16-18

CORN (March)

Yesterday’s Close: March corn futures finished the day up 1 ½ cents, trading in a range of 3 ¼ on the day. Funds were estimated buyers of 5,500 contracts.

Fundamentals: Export sales yesterday morning came in at 1,974,400 metric tons, well above the top end of expectations which ranged from 1,000,000-1,500,000 metric tons; last week’s read was 1,769,595 metric tons. If we continue to see these type of export numbers become a trend, that will help offer support to the market. It is a three-day weekend, so we may see some weather premium linger through the session, leaving the possibility (probability) of a gap move come next week. March options go off the board next week, there are a significant amount of ITM (in the money) calls; this may keep a lid on a breakout move for the next week.

Technicals: March corn futures are testing the top end of the range that was developed back in September and October. Our resistance pocket remains at 366 ½-369. If the bulls can chew through this we would expect prices to grind higher towards 373-374; not the most exciting thing to report but it is what it is, the corn market. The charts have been very constructive, and we would welcome a pull back as a buying opportunity. The most opportunistic spot would be 357-358 ½, this pocket represents recent lows as well as the 100-day moving average. Funds have been covering for several weeks, and we expect to see that reflected in this afternoons Commitment of Traders report.

Bias: Neutral

Resistance: 366 ½-369****, 373-374***, 379 ½**

Support: 357-358 ½**, 350-352 ½***, 345-346 ½***

 

SOYBEANS (March)

Yesterday’s Close: March soybeans finished the session up 7 cents, trading in a range of 9 ¼ cents. Funds were estimated buyers of 9,000 contracts on the day.

Fundamentals: Yesterdays export sales came in at 640,400 metric tons, this was within the expected range from 450,000-750,000 metric tons; last week’s read was 743,223 metric tons. Yesterday’s NOPA crush report came in at 163.11 million bushels, this was below the expected 165.511 million bushels. Nonetheless it was a record for the month and cracked the top 10 on record. Weather continues to be a key catalyst in price action. Meal has been a leader on the back of those weather concerns as Argentina accounts for nearly half of world shipments. With a three-day weekend, we expect to see a gap come next week’s open.

Technicals: The market has taken advantage of the breakout above resistance at 1006, the buying accelerated and now has prices towards the top end of our next pocket which we have outlined as 1020-1027. If the bulls can achieve a conviction close above this level, there is not a lot from stopping it from extending towards 1044 ½-1050 ½. The funds have been reducing short positions for a while now and are likely net long, we should see that confirmed in this afternoons Commitment of Traders report. The RSI (Relative Strength Index) is currently at 69.55, the highest read since July. Shorts have been swinging at a piñata and falling short while the bulls remain in full control.

Bias: Neutral

Resistance: 1020-1027***, 1044 ½-1050 ½****

Support: 1013**, 1001-1006***, 986 ¼-989 ¾***

 

WHEAT (March)

Yesterday’s Close: March wheat futures closed down 4 ½ cents yesterday, trading in a range of 7 for the day. Funds were estimated sellers of 4,500 contracts.

Fundamentals: Export sales yesterday morning came in at 311,100 metric tons, this was within the expected range from 200,000-450,000 metric tons; last week’s report showed 393,437 metric tons. Bulls need to see better exports to see this market extend its rally. Weather has been a key driver with KC wheat being the leader on that front. Some areas are expecting rain in the near future which could put pressure on prices if they are realized. Currency volatility continues to be something we are watching as it has spill over effect on commodities.

Technicals: Consolidation has been the word of the week as prices have traded sideways for the last week and a half. There’s going to be a lot of resistance from 470-472 ¾, if the bulls can pac-man through this pocket we expect to see another 10-15 cents in the rally. A failure to get that breakout sends us back towards 438 ¾-441 ¾. This pocket represents last week’s lows as well as the 100-day moving average. Bulls are in control as the market has managed to make higher lows and higher highs over the past two months.

Bias: Neutral

Resistance: 470-472 ¾***, 481 ¼-484 ¾****, 507 ¾**

Support: 452 ¼**, 438 ¾-441 ¾***, 427 ¼-429 ¾***

 

 

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.

 

E-mini S&P (March)

Yesterday’s close: Settled at 2734

Fundamentals: The 10-year treasury yield hit a high of 2.944 early yesterday and has backed off since. On the flip side we have a rare major four-star support in the 10-year treasury futures at 119’20-120’00 and yesterday’s low was 120’01 before bouncing. The relief in yields has helped equity markets find a path of least resistance higher. Additionally, Asian markets stopped bleeding lower on Wednesday. Earlier in the week we discussed how the Nikkei was down 12% from its high and the delay in BoJ chief Kuroda’s reappointment has encouraged a path of least resistance higher in the Yen; a stronger currency will hold back domestic equities. Overnight, the reappointment was made official and to no surprise the Yen began paring gains. Also to no surprise, the Yen turned around after achieving our rare major four-star resistance. To finish out the week Build Permits and Housing Starts are due at 7:30 am CT and the first look at February’s Michigan Consumer data is due at 9:00 am CT.

Technicals: Yesterday morning we called for a test into major three-star resistance at 2726.75-2733 and that is exactly what we got by the day’s end. We also noted that if you have not been in, don’t force a trade, it is important to protect your capital. After a strong close, the overnight high was 2746.75 and our next key level at 2745 has so far held strong. We would imagine the market is getting a bit tired at this point and we are completely Neutralizing our Bias ahead of the weekend. There is a trend line from the lows that is rising sharply and comes in this morning at 2595.50, we would reconsider a long position upon a test into here.

Bias: Neutral

Resistance: 2745**, 2763***. 2794.50-2796***

Pivot – 2726.75-2733

Support: 2595.50-2701.75**, 2686.50-2688**, 2764**, 2738**, 2712-2719***

 

Crude Oil (April)

Yesterday’s close: Settled at 61.17

Fundamentals: Another session of Dollar weakness yesterday extended overnight to put the Dollar Index at the lowest level since December 2014. This continues to be a very supportive story for Crude Oil. Another major catalyst this week is not only jawboning from Saudi Arabia but some action. They have stepped up to defend the $60 level by saying they would rather see an undersupplied market while announcing a reduction of 100,000 bpd in production next month coupled with capping exports. Furthermore, it would seem they are working on new acronyms to bring fear to the bear camp.

Technicals: Price action in the April contract traded to a session high of 61.73 before peeling back slightly into this morning. We are watching the 61.14 level on a closing basis and we must see a close below here to keep the bulls from maintaining an edge on yesterday’s reversal. The March contract does not fall off the board until Tuesday, at this point we believe the market could see renewed selling pressure.

Bias: Neutral/Bearish

Resistance: 61.75*, 62.15**, 62.63-63.15***, 64.39**, 66.00**, 66.66-66.87***

Pivot – 61.14

Support: 59.85**, 58.99-59.03**, 57.26-57.95***

 

Gold (April)

Yesterday’s close: Settled at 1355.3

Fundamentals: Gold’s rise is as much a Dollar story as it is anything else. But let’s not underestimate the power of inflation in this rise. You don’t have to look further back than the summer of 2016 to see the last time Gold truly put the $1400 barrier to the test with a high if 1377.5. Yes, the Brexit was a crucial geopolitical uncertainty driving price action, but it was not coincidence that U.S Core CPI also peaked that summer. Gold’s trend is very healthy, and we maintain that we believe the metal will breakout above $1400 in the next three to six months; just as we said last week when Gold was nearing $1300. As for the Dollar, it is important to note that the Yen, which has been a driving force in Dollar weakness, hit and reversed from our rare major four-star resistance level detailed in our FX recap. In the short-term, U.S data will drive swings, Building Permits and Housing Starts are due at 7:30 am CT and the first look at February Michigan Consumer data is at 9:00.

Technicals: Price action traded to a high of 1364.4 overnight. We have major three-star resistance at 1367.8-1370 and because of this test, we are Neutralizing our Bias slightly. Let us be clear though, we are unequivocally long term bullish on Gold. Traders should use opportunities like this to take advantage of strong weeks..

Bias: Neutral/Bullish

Resistance: 1367.8-1370***, 1377.8**, 1392.6***, 1432.9**

Support: 1347-1351.4**, 1340.4**, 1328.4**, 1302.3-1309****

 

Natural Gas (March)

Yesterday’s close: Settled at 2.58

Fundamentals: Yesterday’s storage draw came in higher than expected at -194 bcf. Price action lifted briefly but could not hold ground at 2.60. The bears contain a clear edge and a warmer front has begun to move through the Midwest. This has worked to keep price action depressed and has directly affected storage expectations two weeks out. Though we are more Neutral, remember there is value at this level and the market is not pricing in a wintery surprise.

Technicals: The technicals remain undeniably weak. However, our rare major four-star support sits just below the market and is working to keep price action propped up. It is a solid value play here ahead of the weekend as long as traders can keep risk managed. One way to do it is buying a put to avoid a gap.

Bias: Neutral/Bullish

Resistance: 2.607*, 2.681-2.693**, 2.8134-2.837***, 2.896-2.902**

Support: 2.486-2.532****

 

 

 

10-year (March)

Yesterday’s close: Settled at 120’145

Fundamentals: Price action came off overnight session lows into yesterday morning. Let’s not underestimate the technical rejection against our rare major four-star support as price action neared the psychological 3% yield area with a high of 2.944. Data today will be key, but one thing we believe is favorable to higher prices is the slight flattening we are seeing on the yield curve. Building Permits and Housing Starts are due at 7:30 am CT while the first look at February Michigan Consumer data is 9:00.

Technicals: If you blinked early yesterday morning, you missed the test near major four-star support. A level in which we have told clients over the phone we view as a generational support. Price action is testing into the key pivot area at 120’15-120’18 and a close above here will work to neutralize such extreme weakness. Still, the tape is extremely weak, but the selling feels as if it has once again been exacerbated.

Bias: Neutral/Bullish

Resistance: 120’315-121’05***, 121’15-121’175**, 121’31-122**, 122’25-122’29***

Pivot – 120’15-120’18

Support: 119’20-120****

 

 

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.

FX market Recap – BrokersEDGE 2-15-18

Euro (March)

Session close: Settled at 1.2530, up 67.5 ticks

Fundamentals: The Euro traded to an overnight high of 1.25335 before retreating on weaker Trade Balance data. U.S data was mixed with a beat on PPI and a miss on Industrial Production. The intraday low of 1.24805 held last night’s reopen and buyers resumed yesterday’s trend pushing the Euro back to session highs upon settlement. ECB heads Mersch, Praet and Lautenshlaeger didn’t move the meter much this morning. We expect a little more from Coeure tomorrow and the trend seems to be pointing to hawkish jargon. The Euro is up 7.5% against the Dollar since November and yes this has raised quite a few eyebrows at the ECB, especially as U.S politics came into the picture. However, all currencies are up sharply against the Dollar, and the Pound/Euro is essentially flat during that time frame and the Euro/Yuan is rangebound since the rally into last August’s high (it did just double bottom and is up 3% on the week to retest that August high). The point here is that though the ECB is concerned about the Euro/USD it is not a dire situation where the Euro has appreciated against other currencies in the same manner. Because of this, we expect to see that hawkish jargon from ECB heads. From the U.S, Building Permits and Housing Starts are due at 7:30 am CT and Michigan Consumer Sentiment is at 9:00.

Technicals: Price action finished the session out above our key resistance at 1.2508-1.2514 which also aligned with a trend line from the highs. This confirms our Bullish Bias and though resistance is above here at the recent highs, we believe the path is paved for our initial target of 1.2608 and above. The longer price action stays above 1.24805-1.2514, the more bullish the tape becomes.

Bias: Bullish

Resistance: 1.25575-1.25765*, 1.2608***, 1.2695-1.2727***, 1.2919***

Support: 1.24805-1.2514**, 1.2434-1.2436***, 1.23805**, 1.2209-1.2222***, 1.2112-1.21405***, 1.2003***

 

Yen (March)

Session close: Settled .9427, up 70.5 ticks

Fundamentals: The Yen continued its bullish run even as equity markets notched a remarkable session with the S&P gaining more than 1%. Asian markets paused their drop today and volume is likely to be light due to the Lunar New Year. The Yen strength is nearing a place where we would not be surprised to see officials from the Bank of Japan verbally intervene. For now, U.S Dollar weakness along with speculation that the BoJ will continue tapering stimulus measures as the year unfolds is driving price action. Data on Foreign Buying is due tonight at 5:50 pm CT.

Technicals: Price action continues to surge, and we have now upped resistance to a major four-star level. This area aligns multiple proprietary indicators as well as a trend line from the 2016 highs. Though we are remain outright Bullish in Bias, traders should capitalize against this level.

Bias: Bullish

Resistance: .9480-.9491****

Support: .9279-.9285**, .92015**, .9154-.91665**, .9113**, .9062-.9075***

 

Aussie (March)

Session close: Settled at .7934, up 22 ticks

Fundamentals: The Aussie punched higher last night on momentum but also a solid read on Employment Change data. Like most U.S Dollar denominated assets, the Aussie retreated through the first half of the day session but quickly bottomed heading into the afternoon as the U.S Dollar weakened once again. RBA Governor Lowe speaks tonight at 5:30 pm CT. Motor Vehicle Sales data is due at 6:30 pm CT. Look for U.S data to push the tape tomorrow.

Technicals: Today’s price action played out extremely technical and is a great reminder of how the levels work. Yesterday’s momentum carried over early, but it was key that today’s pullback held .7901-.7915, previous three-star resistance that we now have as a pivot. This helped keep the technicals healthy and build for a secondary push towards .7991 into the weekend.

Bias: Bullish

Resistance: .7991**, .8046-.8051***, .8135-.8151****

Pivot – .7901-.7915***

Support – .7868**, .7733-.7757***, .7640**

 

Canadian (March)

Session close: Settled at .8009, up 19.5 ticks

Fundamentals: The Canadian had a quiet but solid session seeing strength from a weaker U.S Dollar and a solid read on ADP Nonfarm Employment. This data showed an increase of 10,700 jobs and helps relieve the dismal part-time job loss seen in the government data last week. Bank of Canada Deputy Governor Schembri spoke with a balance tone on being cautious on the next rate hike but how inflation pressures are real. Tomorrow we look to Manufacturing Sales and Foreign Securities Purchases at 7:30 am CT.

Technicals: The technicals likely held the Canadian back from further gains. Resistance at the .7996-.8006 level has been sticky after a tough month. We remain extremely upbeat on the Canadian in the long-run but a lack of enthusiasm on today’s follow through might signal that value might be had at a better price.

Bias: Bullish

Resistance – .7996-.8006**, .8070**, .81195-.8163***, .8290***, .8524****

Support – .7931-.7949***, .78805**, .7752-.7787***

 

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.

Futures Breaking news – BrokersEDGE 2-2-18

CORN (March)

Yesterday’s Close: March corn futures finished yesterdays session unchanged, trading in a range of 3 ½ cents on the day. Funds were estimated buyers of 8,000 contracts on the day.

Fundamentals: Yesterdays export sales came in at 1,850,000 metric tons, this compares to the expected range from 1,000,000-1,700,000 metric tons. Corn bulls want to see a continued trend of better than expected exports to encourage additional short covering and new buying interest. The USD has been trading near multiyear lows which has helped revive some global demand. Weather in South America continues to be monitored as some are concerned of potential yield loss in areas of Argentina. Private estimates for the Brazilian crop have been increased from 23.44 mmt to 23.87 mmt.

Technicals: The market has been firming up over the past few weeks and it looks as though that may continue. The bulls must maintain price action above 357 ¼-358 ½ to remain in control. This pocket contains the 100-day moving average, along with a key retracement level. The next level of resistance comes in from 366 ½-369. If the bulls cannot defend support, we expect to see the market trickle back towards 350-352. The RSI (relative strength index) is currently at 69.32; a level we have not seen since we peaked last July.

Bias: Neutral

Resistance: 366 ½-369****, 373-376***

Support: 357 ¼ -358 ½**, 350-352***, 345-346 ½***

 

SOYBEANS (March)

Yesterday’s Close: March soybeans finished yesterdays session down 12 cents, trading in a range of 18 cents. Funds were estimated sellers of 8,000 contracts on the day.

Fundamentals: Soybean futures took a turn south yesterday on the back of very disappointing export sales. Weekly export sales came in at 358,900 metric tons, this compares to the estimated range from 600,000-1,200,000 metric tons. On top of the poor exports sales, chances of rain have worked back into the forecast for areas of Argentina that have been relatively dry. There are some seasonals in play that should be encouraging for the bulls. We have recently referenced a May buy, the November buy starts today. If you had bought on February first and sold on the 17th, you would have been profitable for 13 of the last 15 years, with the average gain being about 12 cents.

Technicals: Soybean futures tested and held the first test of 980 on a closing basis yesterday, but the market is under pressure and testing 980 again this morning. This puts the bulls back on their heels as we head towards the open. 971 ¼ is going to be the key line in the sand we are watching for as we round out the week; we like the value at this level on the first test. This represents a key Fibonacci retracement from the June lows to the July highs. The bears want to defend 986 ½-988 ¼ on a closing basis.

Bias: Neutral/Bullish

Resistance: 986 ½-988 ¼***, 999-1006***, 1020 ¼-1027****

Pivot: 980

Support: 971 ¾***, 961 ¼-963 ¼****

 

 

WHEAT (March)

Yesterday’s Close: March wheat futures closed ¼ cent lower yesterday, trading in a range of 8 ¼ cents on the day. Funds were estimate buyers of 500 contracts.

Fundamentals: Wheat futures were under pressure to start yesterday morning as weekly export sales came in at 289,100 metric tons, this compares to the expected range from 300,000-600,000 metric tons. Weather premium has been the catalyst for encouraging higher prices on the back of fund short covering. The bulls need to see more bad news to continue the rally, neutral or no news will likely invite sellers back into the market. The USD is trading near multiyear lows which has also offered some support to the market.

Technicals: Wheat futures tested and held first support at 442 ¼ yesterday, finishing the day near unchanged. That support level remains a key focus today, another test and close below will likely mark a near term top as we would expect sellers to come back in and press us back towards 429 ¾. On the resistance side of things, the bears must defend 456 ¼-458 ¾. The RSI (relative strength index) has come off of overbought levels and is reading 60.78 this mornings.

Bias: Bearish

Resistance: 456 ¼-458 ¾***, 472 ¾***

Support: 442 ¼ **, 429 ½***, 410 ½-413 ¼****

 

E-mini S&P (March)

Yesterday’s close: Settled a 2822.50

Fundamentals: Equity markets are again under pressure this morning and investors await the release of January’s Nonfarm Payroll Report at 7:30 am CT. The S&P hit our main target at 2798 with an overnight low of 2797. Stocks in Europe are also sliding sharply, the DAX is down more than 1% again today and has lost more than 5% since its peak January 23rd. The Nikkei is down nearly 1%. Amazon is in a planet of its own, trading up about 5% after earnings last night. Apple was up more than 2% but has now gone red in the pre-market. Google is down nearly 4% this morning. The key catalyst in all of this is the rise in Treasury yields, a story we have been discussing for some time now. If you are simply watching the Dollar, you might be missing the story of global growth. The Dollar is unwinding its rally that began in 2014 when the Fed was the only central bank tightening. But just because the Dollar is weakening doesn’t mean the growth story isn’t there. Just yesterday, the Atlanta Fed said it projects first quarter GDP at a whopping 5.4%. Inflation has shown signs of rising and the Fed expects it to reach their 2% target and stabilize there later this year. All of this allowed the Fed to pave the way for four rate hikes this year at their meeting Wednesday. Treasury markets are seeing strong selling, which pushes yields higher as this global tightening gets priced in. Higher yields begin to attract investment out of the equity market and furthermore, costs more money to service. Today’s Nonfarm Payroll will be critical in this story, strong growth in jobs and wages will likely add further pressure to equities in the near term. Expectations come in at 184,000 jobs created and Average Hourly Earnings growth of .3% on the heels of .3% last month while the Unemployment Rate is expected to be stable at 4.1%. As we discussed in the Tradable Events this Week on Sunday, the U6 Unemployment Rate has risen for the last two months to 8.1% and this is a data point to watch.

Technicals: Though are Bias has been Neutral all week, we have been adamant about a few things. The sellers are in control until a move out above first resistance while the immediate downside is exposed with a continued close below 2825.50-2828; yesterday’s settlement was 2822. Our first target to the downside is 2807-2808.50 while our main target is 2798. Lastly, you don’t want to be short and just close your eyes. First resistance yesterday was 2838-2839.75 and this is now second resistance but still the line in the sand as a move out above here will completely neutralize the tape. First resistance now is 2825.50-2828.25 and we maintain that continued close below here is needed to keep the bears in complete control. The 2847.75 level is second resistance and a spot that if taken out could cause a strong move higher. With 2798 being achieved with a low of 2797, the next support level comes in at 2773-2777 while our next major three-star level is 2748.25-2752 and this aligns multiple levels as well as a rising trend line from November. If we see a close below 2798, this level is then in play and should present a spot to go long.

Bias: Neutral

Resistance – 2825.50-2828.25**, 2837.75-2839.75**, 2847.75**, 2858*, 2878.50**, 2887***, 2920***

Pivot – 2807-2808.50

Support – 2798***, 2773-2777**, 2748.25-2752***

 

Crude Oil (March)

Session close: Settled at 65.80

Fundamentals: Crude extended gains from Wednesday’s early low by more than $2.50 to 66.30 overnight. Today is Friday, and Friday’s have been very friendly to the energy complex. Today is also Nonfarm Payroll, a report that should influence the Dollar. Right now, the Dollar is slightly higher on the session and this likely has a small hand in Crude retreating from session highs. Do not underestimate the influence that the weaker Dollar has had in Crude Oil above $60 and in the month of January. If the Dollar recovers firmly from oversold territory, we expect this to become a key catalyst coupled with rising North American production in sparking a correction in Crude.

Technicals: Trading to 66.30, price action has extended near the top end of its recent range. If the tape stays contained today, this could build a lower high than Monday’s peak of 66.46 and the swing high on January 25th of 66.66. Remember, the only major three-star level we have had above $60 is 66.87 and this level has held well so far. Our Bias is now slightly more Bearish than Neutral. Traders do not need to pick a top but if today stays contained with a lower high, we believe the door is wide open for the sellers Sunday night. First key support comes in at 65.29 while a move back below 64.98 should encourage further selling.

Bias: Bearish/Neutral

Resistance – 66.30-66.46*, 66.87***, 68.43**

Pivot – 65.80-65.95

Support – 65.29**, 64.98**, 64.67**, 63.67-63.70**, 62.78-63.00***

 

Gold (April)

Yesterday’s close: Settled at 1347.9

Fundamentals: We continue to believe that the long-term picture for Gold is positive. However, we also maintain near-term caution. Since achieving above $1360 our Bias in Gold has been Neutral and we have exuded caution to longs that are pressing their largely profitable position from mid-December. Today’s Nonfarm Payroll report is crucial, and 184,000 jobs are expected to be created. Average Hourly Earnings is expected to grow .3% on the heels of .3% growth last month. Despite the rise in Treasury yields, historically a strong headwind for Gold, the metal has held ground tremendously. What Gold will not be able to ignore is a strengthening Dollar and that is why this report will be key to the near-term trade.

Technicals: A swing high of 1354.3 was achieved yesterday, but the metal struggled to hold above first resistance at 1349.7-1351.4. The near-term technicals look weak due to falling back from the session high. A close above this level today, with Nonfarm in the rear-view mirror, we could imagine becoming bullish again. However, we continue to believe the value is limited until the overcrowded long-position gets cleansed. The market would need to go to major three-star support at 1321.7 in order to begin doing that. Though we can make an argument to begin buying against first key support.

Bias: Neutral

Resistance: 1349.7-1351.4**, 1365-1370***, 1377.8**, 1392.6***, 1432.9**

Support: 1329.1-1331.9**, 1321.7***, 1307.6-1312***

 

Natural Gas (March)

Session close: Settled at 2.856

Fundamentals: Yesterday’s storage report came in at -99 bcf, the lowest drawdown reported since December 14th. Prices have been under pressure since the expiration of the February contract, retreating from a level in which they probably should not have tested to. Now the question is, have prices retreated too much ahead of a weekend and while headlines still warn of chilling temperatures over the next two weeks. Because of this, we would not be surprised to see a consolidation higher ahead of the today’s close.

Technicals: Price action traded sharply below major three-star support at 2.896-2.902 and traded to a low of 2.837. Our next key support level comes in at 2.786-2.81 and this has kept price action in check. We are neutralizing our Bias slightly ahead of the weekend, but the bears will continue to have a clear edge if price action stays below 2.896-2.902.

Bias: Bearish/Neutral

Resistance – 2.981-2.998**, 3.035-3.051**, 3.181-3.197***, 3.27*, 3.32**

Pivot – 2.896-2.902***

Support – 2.786-2.81**, 2.693**, 2.53****

 

10-year (March)

Yesterday’s close: Settled at 121’07

Fundamentals: The global growth story is real and along with the Fed being upbeat on inflation and paving the way for four rate hikes this year, the Atlanta Fed now projects first quarter GDP at 5.4%. The 10-year yield is pushing 2.8% and on the other side of the coin, this is now weighing on equity markets and if the selling in equities picks up any more than this, we believe the 10-year will see strong waves of buying. Today’s Nonfarm Payroll is key for the trade and we have a strong focus on Average Hourly Earnings growth and the U6 Unemployment Rate that has dropped for two consecutive months.

Technicals: We continue to have a contrarian perspective in this market and it has not paid off in a very tough week. Price action has stayed suppressed below 121’17-121’18 which keeps the sellers in clear control. However, watch for a close below 2798 in the E-mini S&P to bring support ahead of the weekend. The session low comes in at 121’02 and we really don’t want to see this taken out.,

Bias: Bullish/Neutral

Resistance – 121’25**, 121’31-122’015***, 122’15-122’175**, 122’26-122’29***, 123’10**

Pivot – 121’17-121’18

Support – 121’02**, 119’20-120****

 

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.

E-mini S&P

Yesterday’s close: Settled at 2825.75

Fundamentals: Equity markets remain subdued with an early evening recovery dissipating into this morning as the 10-year yield treks higher. Facebook whipsawed yesterday after earnings; a reversal back into the green carried both the S&P and NQ higher after the evening reopen. Facebook remains up more than 2% while both major indices have retreated to near unchanged. Yesterday’s Fed meeting brought even less surprise than the reduced expectations. They put themselves on a trajectory to hike four times this year. However, the key component remains inflation; which they believe will stabilize around their 2% target. If Inflation continues to lag, the pace in which they hike will be more ‘gradual’. Nonfarm Payroll tomorrow will be the main event to finish out the week. Still, today we have weekly Jobless Claims, Nonfarm Productivity and Unit Labor Costs at 7:30 am CT. Manufacturing PMI is at 8:45 am CT and the bigger ISM Manufacturing read is at 9:00.

Technicals: The S&P pushed to a new swing low of 2813 before seeing dip buying into the close. Price actin remains subdued but first key resistance which has now moved down to 2838-2839.75 has kept the tape in check entirely. As we discussed in detail yesterday, this first resistance level is critical and in holding strong it has left the bears with the clear upper hand. A move out above 2845.75-2847.75 will neutralize things entirely. Our first downside target remains 2807-2808.50 while 2798 is the main level and one in which for now the argument to go long could be made. A close below 2825.50-2828 is needed to keep things suppressed into tomorrow morning.

Bias: Neutral

Resistance – 2838-2839.75**, 2845.75-2847.75**, 2853.50**, 2858*, 2878.50**, 2887***, 2920***

Pivot – 2825.50-2828

Support – 2815*, 2807-2808.50**, 2798***, 2770-2777**

 

Crude (March)

Yesterday’s close: Settled at 64.73

Fundamentals: Crude Oil has grinded higher on the heels of the EIA posting the largest inventory build since March 8th, 2017. Though Crude inventories gained 6.776 mb, Gasoline was the key story with a surprise draw of 1.98 mb. This was the first time Gasoline inventories fell since November 8th. Gasoline ended up gaining more than two cents on the session and gaining more than 2.5% from its low. We discussed here yesterday the technical reasons why Gasoline will be crucial to the Crude trade, but this surprise draw also abates some of the near-term fundamental weakness it has been bringing to the table. Production data yesterday showed a jump of 41,000 bpd, bringing the weekly estimated total to 9.919 mbpd. Also, data from the EIA on a monthly report showed production in November reached an average of 10.03 mbpd, the highest since November 1970. This news was taken with a grain of salt in the near-term due to the reversal in Gasoline and the common expectation that the U.S will easily achieve this benchmark for some time now. Today’s session will be crucial in determining if yesterday’s price action and reversal was exacerbated due to the last day of the month.

Technicals: The rise back above the $65 mark undoubtedly hurts the bear case in the very near term. However, it doesn’t change the fact that the long side is extremely overcrowded and because of this we maintain to see the upside very limited until a cleansing that forces weak longs to jump ship. Price action is testing resistance that comes in today at the 65.17 mark; this will be crucial on a closing basis. A move back below 64.63 could encourage additional selling.

Bias: Neutral/Bearish

Resistance – 65.17**, 65.52-65.56**, 65.95**, 66.87***, 68.43**

Support – 64.63**, 63.67-63.70**, 62.78-63.00***

 

Gold (April)

Yesterday’s close: Settled at 1343.3 ahead of the Fed decision

Fundamentals: Gold continues to hold value very well and the Dollar is playing a large role in this. The Fed didn’t surprise to the hawkish side because much of what they said was arguably expected. They have set themselves on a trajectory to hike four times this year if inflation continues to tick up. They expect inflation to stabilize later this year near their target of 2%. The good news for Gold is that we don’t expect this alone to increase the value of the Dollar relative to its peers as inflation should be doing the same in Europe. However, we continue to believe that the Dollar is due for a near term bounce and therefore we are being patient with Gold at these levels. For now, Treasury yields are grinding higher and this is also holding back Gold. Nonfarm Payroll is tomorrow. Today is weekly Jobless Claims, Nonfarm Productivity and Unit Labor Costs at 7:30 am CT. Manufacturing PMI is at 8:45 am CT and the bigger ISM Manufacturing read is at 9:00.

Technicals: Price action has retreated from its post-Fed bounce that reached a high of 1351 and failed against our first key resistance. We maintain that we are long-term bullish Gold but are waiting for a more attractive reentry point. We cannot make a strong argument to do so until at least 1329.1-1331.9 is tested and the Dollar relieves some of its oversold technicals.

Bias: Neutral

Resistance: 1349.7-1351.4**, 1365-1370***, 1377.8**, 1392.6***, 1432.9**

Support: 1329.1-1331.9**, 1321.7***, 1307.6-1312***

 

Natural Gas (March)

Yesterday’s close: Settled at 2.995

Fundamentals: Natural Gas lost 20 cents and more than 6% yesterday. Price action continues to be under pressure and as we have been saying for the last week and a half, the rally last week was unwarranted. For those that faded that as well, we want to express caution heading into today’s inventory report as expectations are much milder than in recent weeks and have not priced in a potential bullish surprise. Furthermore, there are still Polar Vortex worries and Natural Gas can use that to bottom out ahead of the weekend. In short, traders should capitalize on this pullback. Expectations for today’s read are at -100 to -104 bcf.

Technicals: Once price action broke below first key support at 3.035-3.051 the flood gates opened. S2 at 2.981 brought support through settlement but now the tape is testing major three-star support at 2.896-2.902. We maintain that it is crucial for traders to capitalize into this level ahead of today’s data.

Bias: Bearish/Neutral

Resistance – 3.035-3.051**, 3.181-3.197***, 3.27*, 3.32**

Pivot – 2.981

Support – 2.896-2.902***, 2.786-2.81**

 

10-year (March)

Yesterday’s settlement: Settled at 121’185

Fundamentals: The 10-year traded to a new swing low this morning. After testing down to 121’105 after the Fed, price action quickly recovered to 121’22. However, it began fading back out. It almost seemed as if once Facebook recovered from early selling post-earnings and equity indices reopened after 5:00 pm CT, the Treasury recovery dissipated just as quickly. Equity markets remain subdued as the 10-year hit 2.75%. We believe the higher yield will continue to put pressure on equities which in turn will spark buying in the 10-year. Data today will be important as we have weekly Jobless Claims, Nonfarm Productivity and Unit Labor Costs at 7:30 am CT. Manufacturing PMI is at 8:45 am CT and the bigger ISM Manufacturing read is at 9:00. However, tomorrow’s Nonfarm Payroll will really set the tone for this market over next week.

Technicals: The tape remains weak and it is tough to be a contrarian in this market. That is why it is important to be leveraged properly if you are sticking this out. We must see a close hold the 121’17-121’18 level to keep the sellers from being in complete control while a close back above 121’25 is a good sign. We continue to like the yield curve flattening spread, a trade that we introduced a couple weeks ago.

Bias: Bullish/Neutral

Resistance – 121’25**, 121’31-122’015***, 122’15-122’175**, 122’26-122’29***, 123’10**

Pivot – 121’17-121’18

Support – 121’10*, 119’20-120****

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.

E-mini S&P

Yesterday’s close: Settled at 2824.50

Fundamentals: The fundamental narrative in this market might feel sharply different between Friday’s close and yesterday’s. As much as this week’s volatility seems foreign these days, it is healthy. On Sunday’s Tradable Events this Week, which was written over the weekend and on the heels of Friday’s melt-up we, did discussed the potential height of exuberance this week given the landmark events and reports (State of the Union, Fed meeting, tech earnings and Nonfarm Payroll). However, we have seen something in the last 48 hours that we have not truly seen in quite a while; traders and investors taking something off the table (selling) ahead of an event and not because of such. Yes, strong selling is likely coming from pension funds, insurance companies and other similar asset holders that need to rebalance stock and bond portfolios after such a strong January. But ultimately, what we are getting at is this is as healthy as it comes, and our long-term Bias has not changed; we expect this volatility and lower price action to pave the way for a buy opportunity. Our technicals signal the potential for about 1% more to the downside. We remind you, if you jumped on yesterday’s ship as it sailed through our key support anywhere from 2840 to 2850, it is just as important now as it was yesterday ahead of the State of the Union to lock in some sort of profit; maybe that is a stop or maybe it is trimming a position. Doing so, gives you the flexibility to trade this market and reposition. Also, when trading multiple contracts, you have don’t have to be all in or all out on each trade. Last night’s State of the Union was presidential, and this is no surprise, the market is responding by working higher from yesterday’s close. On the flip side, maybe you used yesterday’s weakness ahead of the State of the Union as a buy opportunity and the same trade management applies. Eurozone CPI data this morning was in line with expectations. Ahead, there is ADP Payrolls at 7:15 am CT, Chicago PMI at 8:45 and Pending Home Sales at 9:00. The key event today is the Fed policy decision at 1:00 pm CT. They are not expected to raise rates, but we could see a little bit of a hawkish tone in Fed Chairwoman Janet Yellen’s last meeting. Boeing among others are reporting earnings before the bell today. Facebook, AT&T and Microsoft among others report after the bell.

Technicals: Our Bias yesterday was Neutral because, as stated above, we believe this selloff paves the way for a buy opportunity. The Morning Express has been adamant about a 1% downside at minimum if key support at the 2850 area were taken out. We discussed here and in the Midday Market Minute that the first target is 2807-2808 and the main target is below there at 2798. The technicals do signal that the downside has not completed its full wave, however, traders must remain nimble. First resistance comes in today at 2841.50; this is a level for bears to sell against and those who went long before the State of the Union to profit against. A move above 2847.75-2848.50 will completely neutralize the tape while a move above 2855.50-2858 is bullish. A continued close below 2825.50-2828 will signal immediate downside risk.

Bias: Neutral

Resistance – 2841.50**, 2847.75-2848**, 2855.502858**, 2878.50**, 2887***, 2920***

Pivot – 2825.50-2828

Support – 2815-2818*, 2807-2808.50**, 2798***, 2770-2777**

Crude Oil (March)

Yesterday’s close: Settled at 64.50

Fundamentals: Crude began weakening yesterday ahead of inventory data and as the Dollar attempted to stabilized. API data after the bell showed a build of +3.229 mb of Crude and this added to downside pressure sending it to an overnight low of 63.67. Expectations were for a smaller build of +1.5 mb. They also reported a build in Gasoline at +2.69 mb and a draw in Distillates at -4.1 mb. Gasoline is something to keep an eye on as it is under the most pressure and retreated sharply yesterday. The EIA expects much more modest numbers across the board of +126,000 barrels Crude, +1.81 mb Gasoline and -1.45 mb Distillates. Ultimately, today’s EIA read must be in the ballpark of what API reported or it risks the same bullish effect we saw last week. Remember, many of those who are willing to sell because of inventory data have already sold, we must see nearly as bearish data in order to incur fresh selling. Also, on our radar is production data. Last week’s increase of 128,000 bpd put estimated production at 9.878 mbpd. Another increase of this magnitude will send U.S production through the 10 mbpd milestone. Lets also not forget about the Dollar. The Fed delivers a policy statement and decision today at 1:00 pm CT a stronger Dollar will put pressure on commodities while a weaker Dollar will help support them.

Technicals: Crude Oil is seeing weakness with a firm move below the 64.72-64.89 level which we denoted will neutralize this recent push higher. Price action extended losses yesterday all the way down 63.67, our minor and third support at 63.70. We maintain that we must see a close below 62.78-63.00 in order to encourage strong waves of selling. Remember, bulls have piled into an overcrowded record net-long position and the lower Crude goes, the more selling this would incur as the bulls jump ship. Major resistance now comes in at 64.74-65.07 and price action must stay below here, or the bulls will quickly regain a clear edge. Gasoline must be on everyone’s radar and yesterday’s weakness broke down below an ascending wedge. This is a bearish chart pattern that could bring it down to major three-star support at 1.8199-1.8291***.

Bias: Neutral/Bearish

Resistance – 64.74-65.07**, 65.80**, 66.87***, 68.43**

Pivot – 64.26

Support – 63.67-63.70**, 62.78-63.00***

Gold (April)

Yesterday’s close: Settled at 1340

Fundamentals: Gold is trading higher this morning on a weaker Dollar ahead of today’s Fed policy decision at 1:00 pm CT. Also, this week is Nonfarm Payroll Friday and we expect volatility to pick up through here. Today is ADP payroll data at 7:15 am CT, Employment Cost Index at 7:30, Chicago PMI at 8:45 and Pending Home Sales at 9:00. Yesterday, solid Case Shiller data along with better than expected Consumer Confidence encouraged much needed selling in Gold. Still, as the Dollar has weakened once again into this morning, we believe the market is not pricing in the potential for a hawkish surprise in verbiage from the Fed and because of this, the near-term risk is to the downside in Gold.

Technicals: Our Bias remains Neutral in the near-term. However, we are unequivocally long-term bullish Gold. We cannot become neat-term bullish Gold until first key support at 1329.1-1331.9 is achieved at minimum.

Bias: Neutral

Resistance: 1349.7-1351.4**, 1365-1370***, 1377.8**, 1392.6***, 1432.9**

Support: 1329.1-1331.9**, 1321.7***, 1307.6-1312***

Natural Gas (March)

Yesterday’s close: Settled at 3.195

Fundamentals: Natural Gas is sharply lower this morning after prices extended higher early in yesterday’s session on continued repositioning due to the February contract expiration and headline weather risk. Natural Gas usually doesn’t trade relative to weather today and tomorrow but recent volatility in forecasts has done just the same to price action; freezing temperatures yesterday have become much more moderate into today. The question right now is how moderate will this weather stay? Expectations for tomorrow’s storage report sit right about -100 bcf, nearly a third of last week’s near record read.

Technicals: Price action traded out above major three-star resistance at 3.181-3.197 in a short squeeze. However, it stayed below R2 and managed to settle back into the three-star area. First key support remains at 3.035-3.051 and price action has dipped below here, taking out the low from earlier this week. The reversal from yesterday’s highs now extends major three star support a little lower to 2.896-2.902 with support at 2.981 coming in ahead. We remain bearish but want to see a close below first key support to keep the ball rolling.

Bias: Bearish/Neutral

Resistance: 3.181-3.197***, 3.27*, 3.32**

Support: 3.035-3.051**, 2.981**, 2.896-2.902***, 2.786-2.81**

10-year (March)

Yesterday’s close: Settled at 120’205

Fundamentals: The Treasury complex remains under pressure ahead of today’s FOMC Meeting. Last night’s State of the Union brought little volatility and higher equity prices have added some pressure to the complex. However, President Trump used the time to push his infrastructure rebuilding plans. This along with tax-reform will need to be paid for somehow; by printing fresh Treasury debt. Still, we believe a lot of this is already priced in. Furthermore, bond traders are the smartest guys in the room and we believe that they area already pricing in a more hawkish statement from the Fed today. Whereas currency markets likely have not. If the Dollar strengthens today, it does not mean that the Treasury complex must weaken. We continue to believe that this is a time in which traders will benefit from positioning long; a contrarian play.

Technicals: The technicals are undeniably weak, and bounces cannot regain the pivot at 121’31-122’015; a close above here is needed to neutralize this immediate-term weakness. Still, we believe the selling to be exacerbated and this opens the door for a recovery over the next three weeks; the 14-day RSI is below 30 for the third session in a row. Data this week will continue to be a driver as well, so traders must remain nimble.

Bias: Bullish/Neutral

Resistance – 122’15-122’175**, 122’26-122’29***, 123’10**

Pivot – 121’31-122’015

Support –121’25**, 121’17-121’18**, 119’20-120****

 

 

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.

 

Cattle Commentary: Cattle futures finished the session mostly higher, though well off of the highs for fats and feeders. April live cattle finished the session up .275 at 124.90, trading in a range of 1.325. March feeder cattle finished the session up .225 at 146.95, trading in a range of 3.325. Friday afternoon we got some new news across the wires in the form of cash trade and the Cattle on Feed report. The bulk of cash trade was reported at 127 and 200 dressed, this was up 4 and 5 respectively. Majority of market participants we spoke with were expecting to see 126. Fridays Cattle on Feed report showed the following:

 

Cattle on Feed: 108

Range of Estimates: 107.2-108.1

Average Estimate:107.7

 

Placements: 101

Range of Estimates: 93.3-100.3

Average Estimates: 96.9

 

Marketing’s: 99

Range of Estimate: 97.9-100.3

Average Estimate: 98.6

 

This afternoons boxed beef prices were up slightly.

PM Boxed Beef / Choice / Select

Current Cutout Values: / 206.83 / 201.83

Change from prior day: / .06 / .51

Choice/Select spread: / 5.00

 

Cattle Technicals

Live Cattle (April)

April live cattle futures finished gaped higher to start the week, marking the high print in the opening minutes as price action fizzled out for the remainder of the day. The overall price action for the session was neutral but we continue to believe there is opportunity at the top end of the range to consider selling, whether that be reducing long exposure or legging in on shorts. If the market fails to break out above resistance in the coming sessions, it is likely that we see long liquidation take prices back towards first support which comes in from 122.475-122.75. If the bulls do achieve a breakout, the next resistance pocket comes in from 127.20-127.35.

Resistance: 125.20-125.35***, 127.20-127.35***, 130.10****

Support:122.475-122.75***, 120.20-120.625****, 117.90-118.70****

 

Feeder Cattle (March)

March feeder cattle saw some volatility on the open, as we saw a “surprise” gap higher with prices testing our “last line of defense” from 149.40-150.00. The market was not able to hold water at those levels and that led to some pressure for the remainder of the day. If that market fails to gain traction here in the first half of the week, we could see selling pressure come back into the market and press us towards first significant support which we have marked as 143.25-143.50. As with the fat cattle, we continue to feel that this is an opportunity to consider the sell side regardless if you are bullish or bearish (reduce longs/initiate shorts).

Resistance: 147.75-148.00***, 149.40-150.00***, 153.95*****

Support:145.80-146.45***, 143.25-143.50****, 142.10-142.60**, 139.85-140.125***

 

Lean Hog Commentary & Technicals (April)

April lean hogs finished today’s session down .50 at 73.30, trading in a range of .90. Supply side fundamentals continue to lend hand to keeping a lid on a significant rally. Technical resistance from 76.225-76.40 held last week and will continue to be the significant pocket to keep an eye on. On the support side, the market is making a run towards the 100-day moving average which comes in at 72.80. A break and conviction close below opens the door to accelerated selling pressure which could press prices towards the bottom end of the range which we see coming in from 70.625-71.15. This pocket represents The November lows and the 200-day moving average.

Resistance: 74.00-74.375**, 76.225-76.40**, 77.25****

Support: 72.80**, 70.625-71.15***, 67.75-68.00****

 

Euro (March)

Session close: Settled at 1.24265, down 33.5 ticks

Fundamentals: The Euro began working lower late Friday afternoon and continued on that path through today’s session. This slow and steady drip eludes to traders taking positions off the table at the beginning of a pivotal week that has the State of the Union Tuesday night, Fed decision Wednesday and Nonfarm Payroll Friday. U.S PCE Index data was in line with expectations today. Tomorrow morning brings Eurozone GDP at 4:00 am CT along German CPI. U.S Case Shiller is due at 8:00 am CT and Consumer Confidence at 9:00. Both fundamentally and technically, the Euro has more upside in the long-term.; we believe pullbacks are buying opportunities However, traders do want to manage risk properly through what is expected to be a volatile week. Do not forget to read out Tradable Events this Week.

Technicals: Price action is attempting to relieve itself from overbought conditions. The 14-day RSI reached 75 last week. The CoT showed traders expanded the already record long position in the Euro by 25% in the week ending January 23rd. The Dollar Index is bouncing from the most oversold on the weekly since November 2007. To the downside we have first key support at 1.2349-1.23685 and today’s session low of 1.2374 was kept in check by this level. Though we remain long-term bullish, we would rather be buyers closer to major three-star support at 1.2209-1.22135.

Bias: Neutral/Bullish

Resistance – 1.2514**, 1.2608***

Pivot – 1.2434-1.2436***

Support – 1.2349-1.23685**, 1.2307*, .2209-1.22135***

 

Yen (March)

Session close: Settled at .92035, down 23 ticks

Fundamentals: The Yen retreated slightly today, but given recent volatility and today’s Dollar strength, this was a solid session for the currency. Still, we are concerned that Wednesday’s Fed meeting can bring a hawkish surprise and near-term pressure for the Yen. Furthermore, the Yen is attempting diverge from falling Treasury prices but if the Treasuries are lower because of the Fed, the Yen is likely to take similar heat. In a week that will center around U.S political and monetary policy, there are some key data points out of Japan to watch. Household Income and jobs data is due tonight at 5:30 pm CT. BoJ Core CPI is due out at 11:00 pm CT. Tomorrow night is going to be a volatile one for reasons more than just the State of the Union with Japanese Industrial Production data along with Chinese Manufacturing.

Technicals: The Yen has finally picked itself up out of the gutter but faces a tremendous hurdle this week in maintaining its recent gains. Price action is showing signs of fatigue just below major three-star resistance. This level will be extremely critical and a close out above here on the week should spark the next bull leg higher. While we see first key support at .9164, we would rather be buyers against major three-star at .9089-.91035.

Bias: Neutral/Bullish

Resistance – .9237-.9255***, .93215**, .9480***

Support – .9164**, .9089-.91035***, .9043*, .8998-.9006**, .8946-.8957**

 

Aussie (March)

Session close: Settled at .8101, down 18 ticks

Fundamentals: The Aussie has gained more than 8% since its December bottom and as the year unfolds there is room for further gains. For now, we believe it should be most vulnerable to a strengthening Dollar and domestic data this week. First, last week’s CPI read out of its neighboring New Zealand missed widely and we will be watching tomorrow nights Aussie CPI read that will be accompanied by Chinese Manufacturing data (China is Australia’s top trade partner). Tonight, there is Business Confidence data at 6:30 pm CT.

Technicals: Price action traded to a high of .8135 on Friday, the highest level since May 2015 before paring gains. Pullbacks in the Aussie over the last two months of been extremely shallow and the trade is overdue for a sharp move. The weekly RSI is testing the level in which it hit last September, when it traded at this price, this is the highest since 2011. We believe that if the Aussie can chew through major three-star support at the .8033-.8037, the door will open for it to trade down to .7874-.7881.

Bias: Bearish/Neutral

Resistance – .8100-.8125***, .8151*

Support – .8033-.8037***, .7998**, .7962**, .7874-7881***

 

Canadian (March)

Session close: Settled at .81195, down 2 ticks.

Fundamentals: The Canadian stayed in a very tight range through the session as NAFTA talks wrapped up with a positive vibe. We look to a busy week of U.S political and monetary policy to be the key catalyst in price action but at the same time traders need to keep an eye on Chinese Manufacturing tomorrow night and major Canadian data points Wednesday; monthly GDP data and Raw Materials Price Index. We are very bullish the Canadian in the long-term and hope to see it about 1% lower this week on the U.S Dollar consolidating higher from oversold territory to present a strong buy opportunity, rather than down on negative news out of Canada.

Technicals: Price action is holding strong against major three-star resistance at .81005-.81195. One concern technically, is trend line resistance from July 2014. However, like the Aussie did against a similar trend line, we believe the Canadian can get out above here in due time and this can ultimately spark a move to .8524. We would like to see price action dip to .7931-.7949 in order to present the aforementioned buying opportunity.

Bias: Neutral

Resistance – .81005-.81195***, .8163**, .8290***, .8524****

Support – .80505-.8057**, .7996**, .7931-.7949***, .7903**, .7752-.7787***

 

 

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.

 

E-mini S&P

Yesterday’s close: Settled at 2853.50

Fundamentals: The 10-year Treasury yield notched above 2.7% yesterday, a level in which many have called for to spark volatility in equity markets. Our biggest concern with rising yields is the velocity in which they move; a slow grind may not be as troublesome to equity markets while fast spikes higher are more likely to cause pressures. This move in yields is coming from all around the globe. The German 10-year bund yield traded to the highest since November 2015 at just about .7%. While the Chinese 10-year has been around 4% since November, it spiked firmly though that benchmark over the last week and a half. Treasury prices are the inverse of yields and last night the 10-year Treasury extended losses early in the session, this was enough to push the S&P through a key support level and encourage further selling ahead of the busiest of weeks. With more than 100 S&P companies reporting earnings this week, the State of the Union tonight, a Fed policy decision tomorrow and Nonfarm Payroll Friday, it only makes sense for investors to take something off the table at these levels. Eurozone GDP data was in line with expectations this morning while minor components that accompanied the read missed the mark. German CPI data is due at 7:00 am CT. U.S Case Shiller is due at 8:00 am CT and Consumer Confidence follows at 9:00. Lets also not forget Chinese Manufacturing this evening during the State of the Union.

Technicals: Price action tested into our key support at 2851.75-2852.50 early yesterday with a low of 2854.50 and bounced firmly to 2868.25; between the 50% and .618 but also a level in which the sell-volume had come in at earlier on the open. After finishing the session back to this support level, it broke below here last night, and we believe this opens the door for selling down to 2807-2808.50 and the major three-star level we now have below there at 2798. Last night’s low of 2831 held the crucial level at 2825.50-2828, one in which we had as three-star support last week. However, now that the trend line is taken out, we view this level as less strong. This is now a trading environment and can be played from both sides, the bears have an edge this morning though sellers are better off positioning closer 2847.75-2849.25; a move above here will neutralize this immediate-term weakness while a close above 2854.50-2854.75 will help the bulls regain an upper-hand. Only a close back above 2858-2860.50 will turn this immediate-term bullish once again.

Bias: Neutral

Resistance – 2847.75-2849.25**, 2854.50-2854.75**, 2858-2860**, 2878.50**, 2887***, 2920***

Support – 2825.50-2828**, 2807-2808.50**, 2798***

 

Crude Oil (March)

Yesterday’s close: Settled at 65.56

Fundamentals: Crude Oil saw pressure early in the overnight with a strengthening Dollar and ahead of inventories coming into the picture. The Dollar move is so far short-lived as it has turned south this morning, bringing support. Early estimates on the EIA inventory read are for a build of 100,000 barrels. However, API is after the bell today and last week’s API came in at +4.755 mb while the EIA read was a draw and more in line with expectations. It would not be surprising to see API give a bullish read this week relative to expectations. This could ultimately set up for a sell opportunity upon the EIA release. The Dollar will remain in play all session and through this evening on the State of the Union, a strengthening Dollar puts pressure on commodities while continued weakness brings support. Chinese Manufacturing is due at 7:00 pm CT.

Technicals: Price action settled at first support yesterday, this will be a key level that the bears must keep the tape suppressed below. We have maintained a slight Bearish Bias and a lower high below 66.66 and our major three-star level at 66.87 has opened the door for the sellers. Ultimately, as we said yesterday, we need to see a close back below previous highs and support at 64.72-64.89 in order to neutralize this recent push higher. Furthermore, to turn truly Bearish we need to see a close below the $63 area; the market is extremely overbought, and we believe the crowded long position will begin to bail at this level.

Bias: Neutral/Bearish

Resistance – 66.87***, 68.43**

Pivot – 65.45-65.61

Support – 64.72-64.89**, 64.26**, 63.70*, 62.78-63.00***

 

Gold (April)

Yesterday’s close: Settled at 1345.1

Fundamentals: This consolidation lower in Gold is less about long-term fundamentals and more about near-term positioning due to data, the Fed and the pendulum effect. First with the data, Case Shiller is due at 8:00 am CT while Consumer Confidence is due at 9:00; this is just the beginning for the week as we have ISM and Nonfarm Payroll. Second, the Fed and the pendulum effect are more intertwined. Gold bottomed after a dovish Fed hike in December that had two dissenters. Since, inflation has been stable but not much higher and they are not expected to hike tomorrow. However, as we have discussed at length in many of our articles, there is a great unwind going in the Dollar and Euro trade as well as the Dollar against many of its other pairs; the Fed is not the only central bank tightening. Additionally, it is firmly believed that the White House does not want a strong Dollar. This pendulum has swung too far, at least in the very near term. Ultimately, the likelihood of a hawkish Fed statement is increased and for that reason we are cautious Gold in the near-term. Lower price action should bring a tremendous buy opportunity.

Technicals: Yesterday we said we could not make the case to buy Gold until support at 1329.1-1331.9 is tested. Last night’s low was 1337.5 before the Dollar began weakening once again. With key data points today and the State of the Union tonight which are both expected to swing markets, we remain cautious and await a more attractive area to reposition.

Bias: Neutral

Resistance: 1349.7-1351.4**, 1365-1370***, 1377.8**, 1392.6***, 1432.9**

Support: 1329.1-1331.9**, 1321.7***, 1307.6-1312***

 

Natural Gas (March)

Yesterday’s close: Settled at 3.167, 13 cents from its session low

Fundamentals: Natural Gas is surely making it difficult on both the bears and the bulls. The bears are having it a little tougher though. After gapping lower Sunday night, price action worked higher through the second half of yesterday to nearly finish in the green. Storage drawdown expectations from last week, reported this Thursday have increased slightly but are not enough to justify such a reversal. The February contract expired and fell off the board yesterday, for now we chalk this up to repositioning and will be watching today’s settlement closely on a technical basis.

Technical: Price action is above major three-star resistance at 3.181-3.197 and this begins to Neutralize our Bias slightly. Today’s settlement will be key, and we must see it fall back below here. There is minor resistance at the 3.27 level but 3.32 will be in play on a close out above major three-star resistance. Price action could not get below first key support yesterday, but a failure to do so should not have sparked such a strong reversal.

Bias: Bearish/Neutral

Resistance: 3.27*, 3.32**

Pivot: 3.181-3.197***

Support: 3.035-3.054**, 2.943***, 2.865**, 2.786**

 

10-year (March)

Yesterday’s close: Settled at 121’26

Fundamentals: Treasuries around the world have been under pressure. The 10-year achieved 2.7% yesterday and essentially again last night on the Asian open as it traded to a new low before reversing. However, as we discussed in the S&P section, many are calling for this level to put pressure on equity markets; debt will cost more to service and older and more cautious investors will begin to find bonds attractive as yields rise with equity valuations at these levels. The week is just beginning, and volatility will be here to stay through Nonfarm Payroll Friday. Case Shiller is due at 8:00 am CT and Consumer Confidence is at 9:00. German CPI just fell short of expectations and this could work to support Treasuries if we don’t get hot reads from the U.S, especially if equity markets remain weak.

Technicals: Support is thin in this area but building at the 121’17-121’18 area. Price action managed to claw back a close above our 121’25 first support level yesterday. We have maintained a Bullish Bias for now but as a reminder this is a contrarian play as we believe prices and sentiment are exacerbated at this level in the near term. Since early last week, we have said that we like positioning long through last week’s central bank meetings and this week’s Fed.

Bias: Bullish/Neutral

Resistance – 122’15-122’175**, 122’26-122’29***, 123’10**

Pivot – 121’31-122’015

Support –121’25**, 121’17-121’18**, 119’20-120****

 

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.

The following is our levels for each of the most highly traded commodities. This includes Agriculture, Currencies, Energies, Indices, Livestock, Metals, Treasuries and Softs.

 

E-mini S&P (March)

Resistance: 2887***, 2920***

Pivot: 2869.75

Support: 2847.75-2850**, 2825.50-2828**, 2805.25-2807***

Bias: Bullish

 

NQ (March)

Resistance: 7062**, 7076**, 7120***, 7192***

Support: 6965-6987**, 6845.75-6888.25**, 6545-6560****

Bias: Bullish

 

Russell 2000 (March)

Resistance: 1623.7***, 1646.4**, 1660.3**, 1683***

Support: 1580***, 1562.2-1564.4***

Bias: Bullish/Neutral

 

Crude Oil (March)

Resistance: 66.87***, 68.43**, 70.00***

Support: 64.72-64.89**, 64.26**, 63.70*, 62.78-63.00***

Bias: Neutral/Bearish

 

RBOB Gasoline (March)

Resistance: 1.9554***, 2.00-2.0072**

Pivot: 1.9263-1.9393

Support: 1.8950-1.90***, 1.8779**, 1.8199-1.8291***

Bias: Bearish/Neutral

 

Heating Oil (March)

Resistance: 2.1674***, 2.1928**, 2.2086** 2.23-2.24****

Support: 2.07-2.08***, 2.0342***, 1.945***

Bias: Neutral

 

Natural Gas (March)

Resistance: 3.182-3.197*** 3.32**

Pivot: 3.11

Support: 3.035**, 2.943***, 2.865**, 2.786**

Bias: Bearish

 

Gold (April)

Resistance: 1365-1370***, 1377.8**, 1392.6***, 1432.9**

Support: 1349.7**, 1329.1-1331.9**, 1321.7***

Bias: Neutral

 

Silver (March)

Resistance: 17.70***, 18.12-18.18***, 18.825**, 21.095***

Support: 17.00-17.05**, 16.90***, 16.65-16.73**

Bias: Neutral

 

Copper (March)

Resistance: 3.293-3.32****, 3.46**, 3.613***

Support: 3.108-3.1325**, 3.03**, 2.97***

Bias: Neutral

 

10-year (March)

Resistance: 122’15-122’175**, 122’26-122’29***, 123’10**

Support: 121’31-122’015**, 121’25**, 119’20-120****

Bias: Bullish/Neutral

 

30-year (March)

Resistance: 149’22**, 150’19**, 151’10***, 153***

Support: 148’07***, 147’03***, 146***

Bias: Bullish/Neutral

 

Euro (March)

Resistance: 1.2514-1.2531**, 1.2608***. 1.2780***

Pivot: 1.2434-1.2435***

Support: 1.2349-1.23685**, 1.2209-1.22135***, 1.20435***

Bias: Neutral/Bullish

 

Yen (March)

Resistance: 9255-.9279***, .9480***

Support: .9164**, .9089-.91035***, .9043*, .8998-.9006**, .8946-.8957**

Bias: Neutral/Bullish

 

British Pound (March)

Resistance: 1.4370**, 1.4592***

Support: 1.3972-1.40***, 1.3719***

Bias: Neutral

 

Aussie (March)

Resistance: .8100-.8125***, .8151*

Support: .8033-.8037***, .7998**, .7962**, .7874-7881***

Bias: Neutral/Bearish

 

 

Canadian (March)

Resistance: .81005-.81195***, .8163**, .8290***, .8524****

Support: .80505-.8057**, .7996**, .7931-.7949***, .7903**, .7752-.7787***

Bias: Neutral

 

Corn: (March)

Resistance: 358-360 ½ **, 366 ½-369****

Support: 345-346 ½***, 334-335 ¼****

Bias: Neutral/Bearish

 

Soybeans (March)

Resistance: 999-1006***, 1020 ¼-1027****

Support: 979 ¼**, 971 ¾**, 961 ¼-963 ¼****

Bias: Neutral/Bullish

 

Wheat (March)

Resistance: 443-448 ¼****, 456***, 472 ¾***

Support: 428 ½***, 410 ½-413 ¼****

Bias: Neutral

 

Live Cattle (April)

Resistance: 125.175-125.45***, 127.20-127.35***, 130.10****

Support:122.025-122.55***, 120.20-120.625****, 117.90-118.55****

Bias: Neutral/Bearish

 

Feeder Cattle (March)

Resistance: 147.75-147.875****, 149.40-150.00***, 158.925****

Support: 143.15-143.80**, 142.10-142.60**, 139.85-140.125***, 138.30-138.75****

Bias: Neutral/Bearish

 

 

Lean Hogs (April)

Resistance: 76.225-76.40**, 77.25****, 78.50***

Support: 73.275-73.60****, 72.45-72.75**, 70.625-71.10****

Bias: Neutral/Bearish

 

Cotton (March)

Resistance: 84.65-85.10****, 87.18-87.50***, 93.85-94.90****

Support: 79.45-80.35**, 77.30-77.74***, 74.93-75.60****

Bias: Bullish

 

Sugar (March)

Resistance: 15.10-15.80***, 16.70-17.15****, 18.25**

Support: 12.45-12.94***, 10.12-10.51****

Bias: Neutral/Bearish

 

Cocoa (March)

Resistance: 2,000-2,032**, 2,226-2,263***, 2,367**

Support: 1,908-1,932**, 1,804-1,836***, 1,732**, 1299****

Bias: Neutral

 

Coffee (March)

Resistance: 128.50-131.35**, 134-134.55****, 143.75***

Support: 118.30-119.60**, 111.05-113.00***, 100.95****

Bias: Bearish

 

Orange Juice (March)

Resistance: 152.85-153.00**, 158.58**, 165.70****

Support: 144.95-145.35**, 140.05-141.30***, 132.05-132.20****

Bias: Neutral/Bearish

 

Lumber (March)

Resistance: 501.40-505.10***, 547.00-551.30****

Support: 465.20-469.80***, 440.35-44540****, 421.65**

Bias: Bullish

 

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.

CORN (March)

Yesterdays Close: March corn futures finished yesterday’s session down ½ of a cent, trading in a range of 3 ¼ cents. Funds were estimated sellers of 5,000 contracts.

Fundamentals: Recent weather in Argentina has prompted concerns over yield loss, if realized this could be a catalyst to achieve a technical breakout and encourage short covering. We have February option expiration on Friday and 350 looks to be the magnet. As of this morning there are roughly 33,000 open calls between 350 and 355. On the put side, there are roughly 27,000 open between 350 and 345. Strikes with high open interest tend to be a manet into expiration. We had mentioned in yesterday’s report that export inspections would not be released due to the government shutdown, we were then told otherwise shortly after our release, so we apologize for that. Export inspections came in at 668,944 metric tons, this compares to the expected range from 800,000-1,000,000 metric tons; last weeks was 584,389 metric tons.

Technicals: Yesterday morning corn prices were lingering at the top end of the range again, an area where expectations need to be tempered. I would love nothing more than to see corn rally, but you have to trade the market you have, not the one you want. The market rejected the top end of the range and that brings us right back down towards the 350 level which continues to be a magnet. We continue to believe there is an opportunity to trade a few pennies on either side until we get that technical breakout or breakdown.

Bias: Bearish

Resistance: 354-355**, 358-360 ½****, 366 ½-369 ¼****

Support: 345-346 ½**, 334-335 ¼***, 323-325 ¼**

 

SOYBEANS (March)

Yesterdays Close: March soybeans gaped higher on the open, finishing the session up 8 ¼ cents, trading in a range of 7 ¼. Funds were estimated buyers of 7,000 contracts.

Fundamentals: Hot and dry weather in key growing areas in Argentina sparked the gap higher yesterday and the market managed to hold ground on the back of those concerns. If we start to see moisture work into the forecast, you can expect that premium to come out of the market. Export inspections yesterday morning came in at 1,419,430 metric tons, this was above the top end of the expected range from 1,000,000-1,400,000 metric tons. Last week’s number came in at 1,231,037 metric tons. February option expiration is this Friday, it is possible that this could keep a lid on another leg higher but there’s nothing significant to report in terms of significant open interest at a specific strike (like corn).

Technicals: The market has managed to close higher for 6 of the last 6 sessions and it appears we could see number 7 today. Despite the march higher, the RSI (relative strength index) is only at 60. Technical resistance has been tested yesterday and is again being tested in the early morning session. We have defined resistance as 986 ½-987. This pocket represents the 100-day moving average and the 50% retracement (middle of the range) from the June lows to July highs. If we fail to see an extension we would not be surprised to see the market come back to support wit the first line in the sand coming in at 979 ¼, but the more significant level is 971 ¾. If you’ve been wrong for the past week and a half this is where you should consider reducing. We still think there is more upside potential but a consolidation lower would be healthy. There is seasonal buy around the corner, we will keep you posted on that when we get closer.

Bias: Neutral

Resistance: 986 ½-987***, 999-1004**

Support: 979 ¼**, 971 ¾ ***, 961 ¼-963 ¼**, 950-952 ¼***

 

WHEAT (March)

Yesterdays Close: March wheat futures gaped higher yesterday and finished up 4 cents, trading in a range of 4 ¼ cents on the day. Funds were estimated buyers of 2,000 contracts.

Fundamentals: Export inspections yesterday morning came in at 337,980 metric tons, this was within the expected range from 250,000-400,000 metric tons; last weeks was 368.651 metric tons. We know that funds have established a solid net short position, but we do not see any fundamental catalyst at this point that would spook them out just yet. Demand continues to be lackluster which will likely keep a lid on any significant rally. February option expiration is on Friday, there is nothing that sticks out in terms of strikes with significant open interest.

Technicals: The market looks like it is rounding out after trying to recover all of the loses from the most recent USDA report. First technical resistance today comes in at 429 ½, if the market can achieve a conviction close above this level, perhaps we see some short covering from funds push prices towards 443. A failure to breakout will likely lead to a test of the contract lows at 410 ½.

Bias: Bearish

Resistance: 429 ½-430**, 437**, 443-448 ¼ ****

Support: 410 ½-413 ¼***, 399-402 ¾****

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.

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