RJO Futures Website
April 15, 2014 Volume 8, Issue 8


Feature Article

Upcoming RJO Futures Webinars

Trading Agricultural Futures

April 16, 2014 at 12pm CDT
Register now! Trading grains and various agricultural products requires knowledge of the underlying asset class and our goal in this webinar is to introduce new agriculture futures traders to the contracts available in this market. Knowing when to be out of the market is just as critical as knowing when to be in the market and we will introduce technical analysis basics to identify potential market entry points in conjunction with our fundamental knowledge of the agricultural markets.

  • Keys to understanding Agruicultural Markets
  • Benefits of trading the Grains
  • What to consider before trading this market
  • Basic technical analysis techniques on the Ag's

Trading Currency Futures

April 23, 2014 at 12pm CDT
Register now! Learning about foreign currency futures trading can add a broad range of new products to your trading routine. In this session we'll cover many of the critical elements that you'll need to know regarding currency futures (also known as FX Futures). FX Futures trade 24 hours a day, 5 1/2 days a week. This is a very technical market that traders can potentially utilize to trade the markets outside of normal US stock market hours - with good volume and volatility. Depending on where you live and your work schedule, Forex Futures may be a good fit for your trading enterprise.

  • What makes FX a good market to trade?
  • Benefits of trading foreign currency
  • Typical trends within FX Futures
  • An FX Futures trading strategy


Metals - Gold

Nick DeGeorge

In the early morning trade, June gold is down over $30 an ounce and currently trading at $1295.4. Gold fell from its three-week high on speculation that the U.S economy will curb demand for a haven. Also, there are strong speculations that Chinese gold buyers might stop buying the precious metal because of higher prices and that China might have up to 1,000 tons of gold tied up in loan schemes.

If we look at the daily June gold chart, you'll clearly see the support and resistance levels. For the bears, if gold breaks the April 1st low of $1277.4 then $1,200 an ounce will probably be the next level to the down side. For the bulls, gold will need to break yesterday's high of $1331.4 to see higher gold prices. I have highlighted theses levels below on my daily June gold chart.

If you'd like to learn more about futures trading or the metals market specifically, please contact Nick DeGeorge at 312-373-5316 or ndegeorge@rjofutures.com.

Jun '14 Gold Daily Chart

Source: RJO Vantage


Metals - Silver

Today surely doesn't bode too well for the silver market. As far as candlesticks are concerned, giant big red bars down are usually a sign of weakness. From the high this market was down 77.0. This is the biggest one-day drop in the silver market since March 7th. What's more potentially negative about this market is the consolidation since March 27th until the failure of the April 10th high of 2040. Every new high this market made since the March 27th low was rejected and there was no follow through. What could have potentially been a consolidation for another leg higher is now clearly a consolidation and a continuation of the current trend down. The 1880 low from the end of last year needs to hold for this market to have a hope of hitting those early 2014 highs again.

The economic information has been mostly supportive in the near-term for lower metal prices as the polar vortex appears to have been a temporary hiccup. However, we're only one month out so it's possible this was a short-term rebound. As the FOMC's initial 6.5% unemployment rate target is getting close to becoming a reality they've slightly altered their forward guidance. The FOMC Beige Book will be released tomorrow with assumedly supportive information for an improving economy. Contact me for some speculative strategies in the silver market.

If you'd like to learn more about futures trading or the silver market specifically, please contact Mike Rataj at 800-453-4494 or mrataj@rjofutures.com.

May '14 Silver Daily Chart

Source: RJO Vantage


Energies - Crude Oil


June oil has been in consolidation mode after its recent price jump. On April 3, June oil hit a low of $98.15 and then a high of $103.48 yesterday. Including today, the last four sessions appears to be consolidating and looking for market direction. I still believe oil will move lower over time but not without a fight. Current oil stock piles still appear ample and have been confirmed by several consecutive weeks of builds. Last week the EIA reported a build of 4.030 million barrels, putting our total stocks at 384.12 million barrels. That's less than 5 million barrels off our all time high of 388.8 and leaves our 5-year average at 366.8 million barrels. We have seen only 1 draw down in the last 10 weeks and that is in spite of our refinery capacity running consistently above year ago levels, currently at 87.50% vs. 86.80% for the same time last year. Economic data still continues to be a mixed bag both here in the US and globally.

Short-term technical indicators still appear slightly overbought to me. At these levels the market looks to be consolidating and possibly getting ready to roll back over. Initially I recommend targeting the 50-day moving average, $99.60 and then the 200-day moving average, $96.75.

I believe oil prices are overextended at these levels – current supplies coupled with technical indicators suggest a pullback is in store. I believe one way may be through a bear put ratio spread specifically buying one near the money put and selling three deeper out of the money puts - please call me for more details regarding strike prices.

If you'd like to learn more about futures trading or the energies market specifically, please contact Mike Sabo at 312-373-5248 or msabo@rjofutures.com.

Jun '14 Crude Oil Daily Chart

Source: RJO Vantage


Energies - Natural Gas

Bill Moore

Greetings! May natural gas futures are up 3.1 cents this morning (8:29 CST) after pushing to four-day lows in the overnight session. This recovery could be viewed as a continuation of the bullish activity we have seen in recent weeks. Prices had a nine-day win streak bouncing off the 4/2/14 low of 4221.

Demand is up slightly this week with below average temperatures for most of the Midwest. We had our first build of 2014 in last week's inventory number with an injection of 4 BCF. Domestic production is looking to be strong in the coming months. The bulls likely viewed the break above 4580 as a buying indicator. Market indicators are mixed as we hover slightly above the 10- and 50-day moving averages. Support is at 4500 and resistance is at 4620 on the day.

If you'd like to learn more about futures trading or the energies market specifically, please contact Bill Moore at 800-422-6610 or wmoore@rjofutures.com.

May '14 Natural Gas Daily Chart with Moving Averages, RSI and MACD

Source: RJO Vantage

Softs - Cotton

Erik Tatje

There has been some very interesting price action as of late in the cotton market. Following the potential "blow-off top" on 3/26, cotton prices have steadily moved lower throughout the first half of April. After pulling back into the moving average "band" created by the 20- and 50-day moving averages, price produced an "inverted hammer" candlestick just above the 50-day M.A. and has since rallied off this level. Furthermore, this reversal corresponded with a bounce off the 40 level in the RSI, which is typically the "oversold" threshold in a bullish market environment. Despite recent weakness in price, the underlying positive structure in price remains unchanged and the directional bias in cotton remains positive. Near-term momentum remains positive above 89.71 and the chart still looks to favor a bullish argument in cotton.

If you'd like to learn more about futures trading or the cotton market specifically, please contact me directly at 800-826-1120 or etatje@rjofutures.com.

Jul '14 Cotton Daily Chart

Source: RJO Vantage


Softs - Cocoa

Quarterly grindings will take center stage for cocoa this week. The market will need positive news from the North American and Asian quarterly grindings to avoid further liquidation. Malaysia grind numbers show a weaker demand coming out of Asia which feeds the bears in the market. First quarter grindings came out of Malaysia down 13.6% from last year's numbers. Supply and demand news has helped this long-term cocoa rally higher. The supply side of the equation is running out of momentum and is pressuring prices. Looking at the attached chart, the July contract has entered a fairly tight range. Technically we need a break above the 9- and 20-day moving averages to get out of this consolidation and reaffirm a bullish move above 3015. If the market pulls back, look for support at 2965 and 2940. Additional rainfall in West Africa may help test these support levels.

If you'd like to learn more about futures trading or the cocoa market specifically, please contact Peter Mooses at 800-826-4124 or pmooses@rjofutures.com.

Jul '14 Cocoa ICCN14 Daily Chart w/ Moving Averages

Source: RJO Vantage


Softs - Coffee

Adam Tuiaana

A major overnight setback in this recent rally of May coffee is likely due to the continued, and more preferable, wetter weather ahead for Brazil growing areas. Buyers rushed in earlier this month on fears of short supply due to dry Brazilian weather and now we are likely seeing hedging taking place at the 200 level. In my last eView article I stated, "I believe we will begin to see, at least in the near-term, a slightly large correction to answer a very aggressive, large price explosion very soon." My outlook remains the same. Higher coffee prices, on a long-term basis.

Traders should consider long calls to allow time in the trade.

If you'd like to learn more about futures trading or the coffee market specifically, please contact RJO Futures Senior Trading Broker Adam Tuiaana at 800-453-4494 or atuiaana@rjofutures.com.

May '14 Coffee Daily Chart

Source: RJO Vantage


Agriculture - Grain

Stephen Davis

Good afternoon traders. It has been a mixed overnight trade with soybeans higher and corn lower as the market tries to digest and deal with improving US and world weather conditions as well as the uncertainty presented by the rising tensions in Eastern Ukraine and the potential of Russian intrusion. Russia has warned Kiev against using force ahead of an international conference that will be devoted to the Ukraine crisis on Thursday. Russia is watching to gauge if this is a Ukraine show of military force, or whether there will be operations that produce bloodshed.

It will be difficult for our grain futures to post a large decline until the Ukraine conflict settles down and/or our planters start rolling in the Corn Belt. It is not only the military potential that could affect short-term market direction. In a show of poor economic background, the Ukraine National Bank raised their benchmark lending rate by an astounding 7% to 14.5% to contain the risk of inflation and support their currency, which in recent days has fallen to a record low against the US dollar. The move is expected to slow Ukraine grain sales.

The NOPA {National Oilseed Processors Association} came out with their March crush numbers and it was 143.84 million bushels vs. expectations of 146.1 million bushels. This is the largest soybean crush figure since 2001.This report blew the doors off of expectations and soybeans continue higher ,up 32 cents. Friday is Good Friday and we are closed. Happy Easter to you and your family!!!

If you'd like to learn more about futures trading or the agricultural market specifically, please contact Stephen Davis at 800-367-7181 or sdavis@rjofutures.com.

May '14 Corn Daily Chart

Source: RJO Futures PRO

May '14 Soybeans Daily Chart

Source: RJO Futures PRO


Agriculture - Livestock

Jeff Gilfillan

Live cattle futures continue to hold firm as cash trade has stuck in the high 140s - low 150s for the last few weeks. Last week's (as of 04/08) COT data showed a net long of 153,722 in the non-commercials sect just over 3k short of the record net long set one week prior. Since 04/08 the market has rallied a few dollars so this week's report may again reflect the overly bullish sentiment. April cattle futures have two weeks until LTD and the April over June spread has remained strong reflecting the discount of futures to cash as well as large seasonal supply coming to market. Cash and spreads are telling us the market should remain tight. Bear spreaders may want to look at shorting June against October at around 2.00 June discount to October.

See RJOF research to access daily reports on the livestock sector available in report and audio format with speculative and hedging recommendations alongside both fundamental and technical research.

If you'd like to learn more about futures trading or the agricultural market specifically, please contact Jeff Gilfillan at 888-861-0382 or jgilfillan@rjofutures.com.

Live Cattle Futures Monthly Continuation Chart

Source: GeckoSoftware.com


Interest Rates

Eli Tesfaye

June bonds, notes and Eurodollar are all trading higher in the late morning today. Monday's bullish retail sales report was seen as nothing but corrective price action. The early follow through weakness in bonds today was halted by bearish readings of New York Federal Reserve Manufacturing index. The bonds, for now at least, seem to be ignoring the uptick March consumer price index reading.

Outside factors: Overall, a sense of slower rate of growth and slower inflation readings in the global arena are definitely positive for treasuries. Technical prospective: The long end of the curve is technically set to advance higher. In my last eView, I said if the 30-year Treasury bond closes over 134 the market will see higher prices. In my view, unless this market breaks 132.11 weekly support and closes below 132.11, the market is ready to test 137.08 levels. The close below 132.11 could trigger price slide to 127 levels. Give me a call or email me to discuss specific trading strategies.

If you'd like to learn more about futures trading or the interest rates market specifically, please contact Eli Tesfaye at 800-367-7290 or etesfaye@rjofutures.com.

Jun '14 30-Year T-Bonds Weekly Chart

Source: RJO Futures PRO



John Caruso

The Euro Currency fell further out of favor early this morning on weaker German ZEW figure. The Euro is stretching a 3-day losing streak to a low of 1.3787 for the week thus far. In the near-term, it appears as if more liquidation is in sight, but be careful of lagging US economic data that could reinvigorate Dollar bears and Euro bulls. Overall, I still hold a bullish bias to the Euro vs. Dollar trade, but I'll be looking for violated key support levels to shift my stance on the Euro. First support comes in at 1.3775, and a close below 1.3758 shifts sentiment back to the bears.

The Japanese yen has been in a consolidation phase, but appears to be "itching" to break out higher. Keep an ear to the ground for additional hints at the BOJ easing its monetary policy, and watch for a close either above 98.80 or below 98.00 as guidance moving forward.

If you'd like to learn more about futures trading or the currencies market specifically, please contact John Caruso at 312-373-5286 or jcaruso@rjofutures.com.

Jun '14 Japanese Yen Daily Chart

Source: RJO Vantage

Equity Indexes

Jeffrey Friedman

The economy in the first quarter of 2014 is moderately net positive with rebound numbers for retail sales. The key question is whether softness was due to severe winter weather in January and February or fundamentals. This past week's economic news was moderately net positive. However, Ukraine worries and slowing in China overshadowed U.S. data.

Taking into account severe winter weather in 2014, the economy appears to be moderately healthy. Growth is somewhat positive and possibly moderately strong for the 2013 fourth quarter. The recovery likely can withstand the Fed continuing to taper at a slow pace. The economy continues moderate upward momentum but financial markets remain subject to external events—lately Ukraine and China.

This week is heavy with economic news. Manufacturing and housing sectors have been wavering. Key updates come from industrial production, housing starts, and Fed's Beige Book.

Technical outlook for the June S&P futures remain in a long-term bull market. In the short-term the S&P futures are in a down trend, with most chart followers targeting 1799 for support and then at 1787. The S&P could go down to 1750 and then 1730 as a far target. The market must stay below 1860 if the down trend is going to develop. A close over 1860 could give way to new highs for the year.

If you'd like to learn more about futures trading or the equity indices market specifically, please contact Jeffrey Friedman at 800-826-4124 or jfriedman@rjofutures.com.

Jun '14 E-mini S&P 500 Daily Chart

Source: RJO Futures PRO


This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.


The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that RJO Futures believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.

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