Tag: nyse

 

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 (December)

Last week’s close: Traded to 2603 and settled at a new all-time high of 2601 on Friday.

Fundamentals: The market legged fresh all-time highs to finish last week on strong Black Friday sales with Amazon gaining 2.5% and adding another .5% in today’s pre-market. Price action brushed off weakness in China, trading to a low of 2596.50 early in the session before turning higher. New Home Sales data is due at 9:00 am CT and today could be on the quieter side as traders gear up for a big day tomorrow. President Trump is scheduled to address Senate Republicans on tax-reform at their luncheon tomorrow, this could lay the groundwork for a vote in the Senate this week. The next Fed Chair Powell speaks in front of the Senate Banking Committee as his confirmation hearing begins; we will get a glimpse on his plans for the Fed. Goods Trade Balance and Wholesale Inventories are due out at 7:30 am CT tomorrow, Case Shiller at 8:00 am CT and Consumer Confidence at 9:00. Treasury Secretary Mnuchin speaks along with the Fed’s Dudley and Harker.

Technicals: Price action has extended gains this morning and last week’s breakout above 2594.50-2596 signals the next bull leg higher to 2633.50. The overnight pullback to 2596 held support beautifully and gives the bulls a clear edge to start the week. We expect price action to drift higher into tomorrow.

Bias: Bullish

Resistance –2616**, 2633.50***

Pivot – 2600

Support – 2594.50-2596**, 2585.75-2589.50**, 2576.50**, 2567.75*, 2561.75-2562.25**, 2555*, 2539.25-2543***

 

Crude Oil (January)

Last week’s close: Traded to a high of 59.05 and settled at 58.95

Fundamentals: This week is all about OPEC with Thursday’s meeting in the crosshairs. Russian Energy Minister Novak has implied that Russia is on board with extending cuts, but this will be a key talking point throughout the week. Given the recent rally and the positioning from the bull camp, the market is pricing in perfection from this deal; lauded support for nine months to finish out 2018. Anything less could cause a mass exodus from the growing long position. We have been very bullish and vocally such. With our upside target being achieved we have come out of the weekend Neutral.

Technicals: Price action has softened up a little this morning and first support comes in at 58.09-58.14; if the market stays above here the bulls will remain in the driver’s seat, however, a settle below here will begin to neutralize the tape. The key level this week to watch will be 56.94-57.02 and a move below here could easily spark further selling down to the line in the sand $55 mark.

Bias: Neutral

Resistance – 58.97***, 59.96***, 62.58**

Support – 58.09-58.14**, 57.50**, 56.94-57.02**, 56.54*, 55.00-55.25***

 

Gold (December)

Last week’s close: Settled at 1287.3

Note: Traders want to begin using February Gold by tomorrow.

Fundamentals: Gold has continued to capitalize off a weaker Dollar, however, the gains have been subdued. The Dollar has lost 2.5% since its peak earlier this month and is now at the lowest level since September 26th. Gold on the other hand is about 1% lower from September 26th but ultimately range bound between 1270 and 1300. Prospects of stronger global growth, daily all-time highs in equity markets and a more hawkish ECB has worked to keep rallies in check. What it comes down to is the need for a catalyst. Do not get us wrong, Gold has traded in a very constructive manner, and we remain bullish. This will be a very interesting week with New Homes Sales due today at 9:00 am CT. However, tomorrow is jammed packed with speak from President Trump and next Fed Chair Powell as well as data that includes Consumer Confidence.

Technicals: Price action turned north this morning after holding first support and has now edged out first resistance at 1293.7. Strong three-star resistance comes in at 1298.4-1300 and this will be the key level that the metal must close out above in order to squeeze shorts and attract fresh buying. The chart remains extremely constructive and we have strong expectations for Gold in the first quarter, please contact us to see how we are positioning with options.

Bias: Bullish

Resistance – 1293.7**, 1298.4-1300***, 1308.4-1312.6**

Support –1285.1-1286.2**, 1272.4***, 1267-1268**, 1262.8-1263.8**,1243.6*

 

Natural Gas (January)

Last week’s close: Lost more than 4% on Friday settling at 2.916

Fundamentals: Friday was a bloodbath for Natural Gas and the selling pressure was exacerbated ahead of the weekend. Sunday’s reopen brought a much-needed relief as the gap higher regained critical three-star support. With warmer and more moderate temperatures on the horizon, the bears were in the driver’s seat, but as we said they have essentially begun to price-out an actual winter. Our bet is that they will get caught offsides and last night was a sneak peak of what can potentially happen as weather models shifted once again and colder fronts are on their way.

Technicals: Lighter volume (see December) and the contract roll added to an already heavy week. Price action has regained the major three-star level at 2.981 and this will be critical to watch through the end of today’s session. Gap support now comes in at 2.929 and a close below here will add fuel to the downtrend. Resistance now comes in at 3.036-3.059 and the bulls must achieve a close out above here in order to neutralize weakness.

Bias: Neutral/Bullish

Resistance – 3.036-3.059**, 3.10-3.12**, 3.21-3.25**, 3.321-3.36****

Support – 2.981***, 2.929**, 2.847-2.861**, 2.753-2.7565***, 2.486-2.522****

 

10-year (December)

Last week’s close: Settled at 124’31

Fundamentals: The 10-year treasury is holding well and battling a tug of war between equity bulls and what appears to be a more dovish Fed. Last week was a very interesting trade as the curve flattened significantly which has ultimately opened the door for a reversal higher. This is going to be a very interesting week and we have an auction for 2’s and 5’s today and one for 7’s tomorrow. New Home Sales is due at 9:00 am CT today and tomorrow brings the heat as tax-reform comes back into the picture with President Trump addressing Senate Republicans and the beginning of confirmation hearings for the next Fed Chair Powell.

Technicals: Resistance at the 125’015-125’03 level has kept price action in check and this will continue to be a critical level on a closing basis; a close above here will likely gravitate price action higher. To the downside we are watching minor support at 124’275 as the level could become stronger through the end of today’s session.

Bias: Neutral/Bullish

Resistance – 125’015-125’03**, 125’07*, 125’19**, 125’255**, 126’01**, 126’15***

Support – 124’275*, 124’16-124’19**, 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.

E-mini S&P (December)

Yesterday’s close: Lost 4 ticks and settled at 2578

Fundamentals: Weakness was not abated yesterday, and global markets are under pressure this morning; Nikkei futures are down about 2%, the DAX is under pressure losing more than 1% and Euro STOXX 50 is down a little less at -.75%. The commodity sector is leading the way with mining and energy stocks under pressure. The Euro has gained more than 1.5% on the week which has in turn put pressure on European equities following the ‘dovish taper’ honeymoon. Tax-reform took another twist last night with the release of the Senate’s new version that sunsets many middle-class cuts. U.S equity markets are beginning to respond to the lasting uncertainty. The Senate will markup their proposal today while the House is preparing for a Thursday; both versions will eventually need to find an understanding. CPI and Retail Sales is due this morning at 7:30 am CT. This Retail Sales number comes on the heels of a poor Consumer Sentiment read and ahead of the holiday season. NY State Empire Manufacturing is also due at 7:30 and Business Inventories at 9:00.

Technicals: Price action is testing key support at 2561.75-2562.25 for the second time in two days. We have discussed that a move below here will ultimately open the door to major three-star support at 2539.25-2543; upon such, our Neutral/Bearish bias will become outright bearish. The 50-day moving average now comes in at 2540 and aligns with this three-star level, the S&P has not closed below its 50 day since August 29th and this is one of many reasons why we would look to buy against here. The 20-day moving average comes in at 2574.75 and a close back near this level will neutralize weakness. Only a move back above resistance at 2583-2585.75 will turn the market bullish again.

Bias: Neutral/Bearish

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

Pivot – 2574.75

Support – 2561.75-2562.25**, 2555*, 2539.25-2543***, 2525.50**, 2504.24-2507.75****

 

Crude Oil (December)

Yesterday’s close: Lost nearly 2% to settle at 55.70 but traded lower into the electronic close.

Fundamentals: Yesterday’s IEA report put a damper on the upbeat Oil demand rhetoric we have been hearing from OPEC. The API data late in the session put further pressure on the market as it showed a large build of 6.513 mb when a draw of 1.4 was expected. Adding to pressure was a build in Gasoline of 2.399 mb when a draw was also expected here of 1.1 mb. Distillate inventories declined 2.527 when a build of 500,000 was expected. All of this has encouraged selling but we maintain our belief that the true catalyst has been the lid on the market above $57 due to large call option open interest. Furthermore, even larger open interest at the $55 mark has created a gravitational pull. We also believe once the expiration passes, it will spark renewed buying interest into the end of the week as traders reposition. In fact, we loved to see such a bearish API report last night as it gets a lot of the selling out of the way. Now, today’s EIA report must be nearly as bearish or more bearish to encourage fresh selling (exp Crude -2.2 mb, Gasoline -.919 mb, Distillates -1.269 mb). Production will be watched, and it is likely that much of the volatility in inventories would be attributed to the weekly shift in exports.

Technicals: We have been Neutral/Bearish calling for this correction since Sunday. Now that it is achieved we are Neutral this morning. Price action is hugging the key $55 mark that not only has large call open interest but also put OI. This was also a key breakout level as it was the previous high of the year and encourage massive volume. Barring a more bearish EIA report than API, we expect to see a technical hold at this level and a reversal of yesterday’s that might begin as early as 10:00 am CT but ultimately after the settlement at 1:30 as buyers step in to finish out the week. Monday’s low and yesterday’s high will bring a key resistance level and if price action gets out above here it should spark a bullish leg higher.

Bias: Neutral

Resistance – 56.30-56.77**, 57.15**, 57.92**, 58.97***

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

 

Gold (December)

Yesterday’s close: Settled 1% off its low at 1282.9

Fundamentals: Gold finally began to respond to a weaker U.S Dollar after St. Louis Fed President Bullard commented that he is skeptical on hiking rates in December. We added that he does not expect inflation to reach the Fed’s 2% target until later in 2018 or 2019. Bullard’s comments came right before and took precedence above a strong but likely transitory read on PPI. CPI and Retail Sales are due out today at 7:30 am CT and these reads will be crucial and accompanied by NY State Empire Manufacturing. Business Inventories are due at 9:00. Chicago Fed President Evans spoke again this morning and said that he will go into December’s meeting with “an open mind”. He added that the “economy is strong but there is still a ways to go with inflation and an accommodative policy should remain”. Tax-reform remains a hurdle and has been supportive to Gold, the Senate released their version last night. The House is due to vote on theirs on Thursday.

Technicals: Gold is a fighter and continues to battle at major four-star support and win. Price action has been very constructive this week and a close back above 1280.5-1281.6 yesterday was key, it must continue to close above the level that includes the 100-day moving average. Still, the metal faces resistance at 1291.3-1292.9 and a move out above here is needed to squeeze the shorts.

Bias: Bullish

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

Pivot – 1280.5-1282.1

Support – 1262.8-1271***, 1243.6*

 

Natural Gas (December)

Yesterday’s close: Settled at 3.102

Fundamentals: Estimates on tomorrow’s storage data are looking for a build of 15 bcf and price action came under pressure to start the week as this was taken in stride. Yesterday, the IEA said that U.S will become the leading global gas exporter by the mid 2020’s. This is in line with our belief and a major factor in why we think Natural Gas is too cheap near $3, especially heading into the winter.

Technicals: Price action has battled against first key support and put in a low in at 3.064. The tape has stabilized and is attempting to trade constructively heading into tomorrow’s data.

Bias: Bullish/Neutral

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 124’235

Fundamentals: With global equity markets under fairly severe pressure this morning along with a weaker Dollar the 10-year has gotten a firm bid off of yesterday’s low. Comments from Fed speakers Bullard and Evans are more dovish than anticipated and not that it will completely effect a December rate hike that is nearly priced in 100% but because this almost assures that they will not speed up the pace of hiking from the already priced in three hikes next year; the key reason why we are long term bullish the 10-year. CPI and Retail Sales will be crucial reads today.

Technicals: Key support at 124’19 did the trick in stopping the bleeding early yesterday. Price action is testing first resistance now at 124’31-125’015 and a close out above here is needed to offset the recent weakness.

Bias: Neutral/Bullish

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.

Euro (December)

Session close: Gained 126 on its strongest session since June 27th to settle above 1.18

Fundamentals: Data this morning confirmed Eurozone growth in the tune of 2.5% for Q3 YoY. The largely hyped ECB panel ultimately was not the catalyst in today’s move but a technical breakout above three-star resistance early this morning got the ball rolling. What drastically extended gains today was comments from St. Louis Fed President Bullard that he does not think the Fed should hike in December. He included his pessimism on inflation. Today’s price action gives no sign that PPI data from the U.S came in better than expected across the board. CPI and Retail Sales are due out of the U.S tomorrow at 7:30 am CT.

Technicals: This is exactly the type of price action that you want to see on a breakout above a major three-star resistance level. Trend line resistance at 1.1750 was also taken out and tomorrow this line will move lower and align with what is now major three-star support at 1.1714-1.1725. The session high comes in at 1.1826 and faces resistance at the 50-day moving average at 1.1830. It would be rare on the heels of such a strong session to not see some follow through tomorrow. First support comes in at 1.1785-1.1799 and this level encompasses the 100-day moving average.

Bias: Bullish

Resistance – 1.1830**, 1.1866**, 1.1921-1.1934***, 1.1991*, 1.2019**

Support – 1.1785-1.1799*, 1.1714-1.1725***, 1.1622-1.1639**, 1.15785*, 1.1481-1.15***

 

Yen (December)

Session close: Finished up 11.5 ticks on the session

Fundamentals: BoJ Governor Kuroda said earlier today that inflation expectations are beginning to pick up but are “backward looking”. Well, tell us something we don’t know. . . He added that the BoJ will remain strongly accommodative. GDP data is due tonight at 5:50 pm CT and Industrial Production follows at 10:30 pm CT.

Technicals: We believe that the short and net-shot position in the Yen are now at record levels. Dollar weakness must begin to worry these traders especially since the odds of a December rate hike are nearing 100%. We believe the weakening Dollar will be the catalyst that sparks a massive short covering rally in the Yen. Price action has continued to battle against the .8800-.8828 level and the longer it stays above here the more we like the trade.

Bias: Bullish

Resistance – .8868-8879**, .8971-.8980***, .9021-.9045***

Pivot- .8800-.8828***

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

 

Aussie (December)

Session close: Gained 8 ticks on the session

Fundamentals: Chinese Fixed Asset Investment, Industrial Production and Retail Sales all missed last night. However, the Aussie was already losing ground to finish the session and bottomed early this morning on Dollar weakness. The session saw further support on St. Louis Fed President Bullard’s comments that the Fed should not hike in December. Westpac Consumer Sentiment data is due at 5:30 pm CT. Wage Price Index is due at 6:30 pm CT and traders brace for employment data out of Australia tomorrow night.

Technicals: Price action battled against major three-star support at .7622 throughout the session and it held. Renewed weakness in the Dollar and a hold against key support has brought a slight Bullish bias to couple with what has been Neutral. The high of the week comes in at .7663-.7678 and this aligns with the 200-day moving average; we expect a test to here into tomorrow morning.

Bias: Neutral/Bullish

Resistance – .7663-.7678**, .7717-.7725***, .7780**, .7872-7902**, .7964**, .8096-.8115***

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

 

Canadian (December)

Session close: Lost a tick and a half but finished a quarter from the low.

Fundamentals: The back half of the week will be where the action is for the Canadian. Crude Oil weakness has been offset by Dollar weakness and the Canadian has battled well through a consolidation phase as traders await more news. CPI and Retail Sales out of the U.S along with Crude inventories will play a key role ahead of data out of Canada on Thursday. NAFTA talks are set to resume November 17th and this must be on your radar.

Technicals: Price action dipped through first support today but as we noted last night, we are watching for the settlement to stay above .7851-.7856 rather than a sharp move through today’s session. The consolidation phase will likely continue, and we are not worried as long as it remains gentle.

Bias: Bullish

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

Support – .7851-.7856**, .7821*, .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.

E-mini S&P (December)

Yesterday’s close: Gained 2.5 on the session finishing at 2582

Fundamentals: As traders monitor the ECB panel this morning with Yellen, Draghi, Kuroda and Carney we also await key inflation data with PPI due at 7:30 am CT. Data out of the Europe was overall mixed this morning with German Sentiment missing the mark but the Eurozone read coming in stronger. GDP was in line with expectations and around 1:30 am CT the Euro traded through major three-star resistance and to the highest level since the ECB meeting on October 26th. Tax-reform remains at the forefront and yesterday Treasury Secretary Mnuchin said that the House and Senate are “very close”. Equity markets keyed off this to work back to unchanged on the session, however, we credit the technical ground work against first support as the driver. All year traders have believed tax-reform will get done, and in all likeliness, it will. The market is more worried about corporate taxes on the surface of this plan and not delaying such. St. Louis Fed President Bullard speaks at 7:15 am CT and new Atlanta Fed President Bostic at 12:05. Chinese data last night marginally missed the mark but ultimately this has gone unnoticed. GDP is due out of Japan this evening.

Technicals: Price action traded to a low of 2570 yesterday and against that of Friday’s. First key support at 2573.50-2574.25 was breached but only for a short period of time just ahead of the NYSE open. Ultimately, the intraday session did not trade below support. Still, resistance at the 2583-2585.75 is also holding strong and the door is still open for the bear camp. If you have traded against this level, you are doing just fine and it is more of a matter of how much you are looking for or maybe you have traded against this level more than once now. We remain Neutral/Bearish but keep in mind we also want to find a place to become Bullish once again.

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)

Yesterday’s close: Gained 2 cents on the session but did run stops below first support.

Fundamentals: The IEA released their monthly Oil Market Report this morning and cut Crude Oil demand growth for 2017 and 2018. Importantly, they noted the recent rise in prices and question the fundamental backdrop on how the “market balance in 2018 does not look as tight as some would like”. The comments and data noticeably contradicts that of yesterday from OPEC. Price action has begun to weaken, and we maintain that the key this week, more than these reports and most likely more than the EIA (barring a tremendous outlier), is December option expiration.

Technicals: Price action is trading heavily but clinging to first support. As we discussed yesterday, a move to $55 would hurt the most amount of people and this for us is reason enough to believe that it is in the cards. However, once option expiration is over tomorrow we should see renewed buying to finish out the week and into the December contract expiration. A selloff due to option expiration will be a great way to cleanse the over-extended Commitment of Traders which reported the largest long position and net-long position since the week of March 7th where a sparked a 12.5% selloff ensued. We turned Neutral/Bearish yesterday and will remain such as traders must be nimble in this volatility.

Bias: Neutral/Bearish

Resistance – 57.15**, 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)

Yesterday’s close: Gained 4.7 on the session to finish at 1278.9

Fundamentals: Gold is fighting against optimism on tax-reform and global growth. This morning the Dollar Index is down .25% but Gold is down .5%. Renewed and revived growth out of Europe has driven yields higher and ultimately Gold can only fight so hard without an outside catalyst. Last week, President Trump’s Asian trip attracted geopolitical speculation but since the tape has suffered. Friday’s volume was the largest since September 21st, the day after the Fed hiked rates. Much of this was due to a large sell order but these large orders can also dictate sentiment for a few sessions. A key read on inflation is due out with PPI at 7:30 am CT this morning; a miss here would reinvigorate the bull camp. St. Louis Fed President Bullard speaks ahead of it at 7:15 am CT. The ECB panel continues through the morning. New Atlanta Fed President Bostic speaks at 12:05 pm CT and the week is only getting started.

Technicals: We discussed the significance of major four-star support and though yesterday’s tape began to consolidate, renewed weakness is pressing into this level once again. We have now begun to Neutralize our bias. We remain long term bullish but must also be aware of the market pulse. We are now Neutral/Bullish and if PPI comes in better than expected, we would suggest that longs still holding on get out of the way for a few rounds.

Bias: Neutral/Bullish

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

Support – 1262.8-1270.6***, 1243.6*

 

Natural Gas (December)

Yesterday’s close: Settled down at 3.167

Fundamentals: The colder weather is here and New York is now flirting with freezing temperatures. Natural Gas is in a consolidation phase until there is further proof that stockpiles were drawn down and to what degree after price action got a little ahead of itself last week.

Technicals: Price action is under pressure this morning trading losing as much as 8 cents overnight. First key support is holding at 3.08 but we expect the consolidation to continue and the chart is technically damaged in the very immediate term (a session or two). We now look for key support at 3.035-3.051 to play a big role in fixing the tape off a consolidation. If the bears take it below gap support at 2.984-2.998 then we have a near term failure on our hands.

Bias: Bullish/Neutral

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 124’20

Fundamentals: Data out of Europe didn’t surprise much this morning and was for the most part in-line with expectations. Furthermore, neither has the ECB panel as central bank heads have more or less discussed support for their actions. Prices have sold off ahead of U.S (and global) inflation data this week which begins today with PPI at 7:30 am CT. Though the action could be attributed more to the likeliness that tax-reform gets figured out, today’s PPI data and tomorrow’s CPI remain a clear wildcard and poor reads here will reinvigorate a weak tape. However, a surprise beat will work this market below 124 and retest the lows from earlier this year.

Technicals: Price action has clung to the 124’19 level though it traded to a low of 124’16 overnight before consolidating higher ahead of PPI. The technicals will be at the mercy of the data over the next two sessions. However, this is where the settlements become key in the momentum trade.

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.

 

NYSE FANG+ Index

From theice.com

The NYSE FANG+ Index

 

INDEX COMPOSITION: BENCHMARKING TODAY’S TECH GIANTS

The NYSE FANG+ index includes 10 highly liquid stocks that represent the top innovators across today’s tech and internet/media companies. The index’s underlying composition is equally weighted across all stocks, providing a unique performance benchmark that allows for a more value-driven approach to investing. While the performance of indices weighted by market capitalization can be dominated by a few of the largest stocks, an equal-weighting allows for a more diversified and represented portfolio. NYSE FANG+ is one of the most highly correlated indices to technology and related stocks.

UNDERLYING STOCKS IN NYSE FANG+*

Facebook
(FB)

Apple
(AAPL)

Amazon
(AMZN)

Netflix
(NFLX)

Google
(GOOGL)

Alibaba
(BABA)

Baidu
(BIDU)

NVIDIA
(NVDA)

Tesla
(TSLA)

Twitter
(TWTR)

Real-time index calculations are available to help you benchmark the core group of stocks included in the index, and official open and close prices are published daily on the NYSE Global Index Feed.

REVIEW THE FULL INDEX METHODOLOGY HERE

TRADING NYSE FANG+ INDEX FUTURES ON ICE: THE BENEFITS

NYSE FANG+ futures, which will begin trading on ICE Futures U.S. on November 8, 2017, subject to regulatory review, provide a concentrated hedging mechanism for asset managers, proprietary trading firms, institutional traders and retail investors with technology exposure. The contract features:

Low-cost exposure to tech sector

One of the most highly correlated indices to tech and related stocks

Hedging mechanism to quickly increase or decrease tech exposure in equities portfolios

A disciplined methodology that will dictate the evolution of underlying securities

NYSE FANG+ INDEX PERFORMANCE COMPARISON 
(Hypothetical performance using backtested data)

Based on back-tested performance data, the combination of stocks in the NYSE FANG+ Index have returned a 28.44% annualized total return from September 19, 2014 to September 15, 2017, as compared to 14.89% for the NASDAQ 100®, 9.86% for the S&P 500® and 16.80% for the S&P 500® Information Technology Index.

Calculations are based on the price return of each index. NYSE FANG+ is an equal-weighted index, whereas the other indices represented in the chart above are weighted by market capitalization.

Description

NYSE FANG+™ is a new index providing exposure to a select group of highly-traded growth stocks of next generation technology and tech-enabled companies. The futures contract on the index is designed to offer the ability to gain or reduce exposure to this key group of growth stocks in a capital efficient manner.

Market Specifications

TRADING SCREEN PRODUCT NAME

FANG+ Index Futures

TRADING SCREEN HUB NAME

ICUS

SYMBOL

FNG

CONTRACT SIZE

$50 times the NYSE FANG+ Index

CONTRACT MONTHS

4 contracts in the March, June, September and December cycle

PRICE QUOTATION

Index points, to two decimal places

TICK SIZE

.10 Index points, equal to $5.00 per contract; calendar spread trades may be executed at .05 index point increments.
(Block Trades can be done at .01 Index points)

LAST TRADING DAY

Third Friday of the expiration month. Trading in the expiring contract ceases at 9:30 am NY time on Last Trading Day.

DAILY SETTLEMENT

16:14 to 16:15 NY time

FINAL SETTLEMENT

Cash settlement to a special calculation of the NYSE FANG+ Index (Price Return version) based on the opening prices of the component stocks on the Last Trading Day for the contract.

POSITION ACCOUNTABILITY

Position Accountability Level – 20,000 lots in any month.

POSITION LIMIT

Position Limit – 100,000 lots in all months combined.

DAILY PRICE LIMIT

None.

BLOCK TRADES

Yes, 20 lot Block Minimum Quantity

EFPS AND EFSS

Yes.

IPL LEVELS

IPL Amount: 2000 Index Points
Recalc Time and Hold Period: 5 seconds

NCR AND RL

NCR 3.00; RL 7.50; CSLOR 2.00 Index Points

EXCHANGE FEES

Screen Trades: $1.00 per side
Block and EFRP Trades: $1.50 per side

MIC CODE

IFUS

CLEARING VENUES

ICUS

For more information please contact DAW Trading at info@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.