July 21, 2017

Volume 11, Issue 29

Feature Article

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Metals - Gold

Will gold reach $1,300?

Nicholas DeGeorge

In the early morning trade, August gold has extended its rally another $5 overnight and is currently trading at $1,250.0 a troy ounce. The continued downside of the US dollar has yet again provided gold a move and rally higher. Yesterday’s rally in gold was even more impressive in the wake of the ECB expressing concerns over low inflation readings. However, the benefit for gold in the long run would be that both European and US rate hikes would have to be pushed back because of lingering deflation concerns.

If we take a quick look at the daily august gold chart, you’ll clearly see that gold broke out above a downtrend back on July 14.  Also, it is back above all the major moving averages and now is prone to rally up to $1,300.0 a troy ounce and with the fundamentals to support this short-term rally. Below is a daily August gold chart with the levels above.

If you have any questions or would like to discuss the markets further, please feel free to contact me at 800-453-4494 or ndegeorge@rjofutures.com.

Aug '17 Gold Daily Chart

Aug '17 Gold Daily Chart

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Metals - Silver

September Silver, Are We Running Back to $17?

Joshua Graves

In the recent weeks we have seen the September silver contract posted a major low of 15.145 on July 10. Much of this could be attributed to the consistently positive US economic data, the generally hawkish tone in the Fed leading to a strong dollar, and really a lack of any real geopolitical concern around the world. At this point, the Fed is unwinding the balance sheet which could be a trigger that pressures the metals complex as a whole. The question is, was this news already priced in? We are still pricing in another rate hike before the year end which should, in theory, pressure silver. The biggest bull news for metals is most assuredly the US dollar being at 10-month lows, and all three US stock indices are making record highs seemingly every week. A risk-on psychology is coming back into the market. All other things equal, a weaker US dollar lifts commodities across the board as it makes our commodities more competitively priced around the world, including the silver market and metals in general, which are seen as safe haven assets. A weaker US dollar becomes less attractive from an investment standpoint when metals remain strong. Silver has the potential to make another run back to the technically and psychologically important $17 level within the next few weeks.

A strong bull picture in September silver lies in the technicals. A clear downtrend has been broken, the MACD has crossed indicating a buy, and we are clearly walking up the trend toward the $17 level. If we do happen to pullback, $16 is a new area of key support, while 16.85 is going to be resistance. We are currently trading at 16.42 this morning, and show no signs of stopping this march toward $17.

If you have any questions or would like to discuss the markets further, please feel free to contact me at 800-435-4805 or jgraves@rjofutures.com.

Sep '17 Silver Daily Chart

Sep '17 Silver Daily Chart

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Energies - Crude Oil

Energy Complex Breakouts Reaffirm Reversals, Define New Bull Risk Levels

Yesterday and overnight's break above the past couple weeks' resistance ranging from 46.88 to 47.32 confirms our bullish count discussed in last Fri's Technical Webcast and exposes the longer-term trend as up. As a direct result of this continued strength the 240-min chart below shows that the market has identified Mon's 45.89 low and 10-Jul's 43.65 low as the latest smaller- and larger-degree corrective lows that now serve as our new short- and longer-term risk parameters to a continued bullish policy and exposure.

From an Elliott Wave perspective the rally from 10-Jul's 43.65 low is either the C-Wave of a broader bear market correction OR a 3rd-Wave of a much more dramatic move higher. As always, we bias towards a wave count that is WITH the trend at hand (i.e. "The trend is your friend") as identifying the risk parameters the market needs to nullify such a count are always more objective and practical then fading the clear and present uptrend.

IF the market has something bigger to the upside in store for us, former 46.88-to-47.32-range resistance would be expected to hold as new support and the market would NOT be expected to now fail below 45.89. Rather, the uptrend would be expected to continue and even accelerate higher...

RJO Futures clients may login here to the client portal and access all RJO Market Insights.

Crude Light 240 min Chart

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Energies - Natural Gas

Bullish Natural Gas Market Shows Good Momentum

Jeff Ratajczak

July has been mostly bullish for the Natural Gas market. Yesterday signaled a high move for the near term trend, and a high trade for the month of July. Momentum studies are at midpoints and trending higher. Use caution, because a divergence from the general price action may signal change from the current  trend. The trend might be fading a bit due to the break up of Tropical Storm Don. No rigs were being shut down and there were no cut backs in production due to weather issues. Today’s gas storage number is expecting an injection of 39 bcf. Greater than the expected number could cause the market to reverse and sell off.  

Weather until now has been a non issue, but rising temps over the past week have increased demand. The 6 to 10-day forecast is for hotter drier weather. A dome of high pressure will be in place for the weekend, and much of the country will experience above normal temperatures. Cautiously bullish plays are in order. 

If you have any questions or would like to discuss the markets further, please feel free to contact me at 888-874-81104 or jratajczak@rjofutures.com.

Sep '17 Natural Gas Daily Chart

Sep '17 Nat Gas Daily Chart

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Softs - Sugar

Continued Sugar Gains Reinforce Base/Reversal Threat, Define New S-T Bull Risk

Today's break above 10-Jul's 14.39 initial counter-trend high confirms at least the intermediate-term trend as up and reinforces our base/reversal all introduced in 03-Jul's Trading Strategies Blog. As a direct result of this resumed strength the 240-min chart below shows that the market has identified 11-Jul's 13.21 low as the latest smaller-degree corrective low the market now needs to sustain gains above to maintain a more immediate bullish count.  Its failure to do so would render the recovery from 28-Jun's 12.74 low a 3-wave and thus corrective affair that might then resurrect the broader downtrend from Sep'16's 24.10 In this regard 13.21 becomes our new short-term parameter from which the risk of non-bearish decisions like short-covers and cautious bullish punts can be objectively rebased and managed.

Sugar 240 min Chart

The really compelling thing here is the unique combination of a confirmed bullish divergence in momentum while market sentiment is so historically bearish.  Of course, the huddled masses being bearish at major market bottoms (and bullish at major market peaks) is hardly unique, it happens all the time.  And we use this contrary opinion indicator extensively in our analysis.  We have seen recent major moves ...

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Softs - Cocoa

Cocoa and the Grinding Data

Peter Mooses

September cocoa traded higher during Wednesday’s session - finding resistance again around 1955. The NY futures contract has recovered since hitting 1801 on July 12. Cocoa has found a range between 1800 and 1950, giving technical traders some guidance when entering new positions. The recent trade below the 9- and 18-day moving averages wasn’t enough to keep the market down; grinding data has taken over the trade for the next few days. Asian data came in at 9.9% for the second quarter – coming in lower than estimates. North American Q2 data will be released Thursday. The NA data should have a big impact on prices in the short-term. Wednesday’s trade saw a high of 1953, but the market couldn’t hold and close above 1950. The recent downtrend in the dollar is also directing cocoa. Look for Thursday’s grinding data, the currency trade and any new demand news to be the near-term guidance for establishing future positions.

If you have any questions or would like to discuss the markets further, please feel free to contact me at 800-826-4124 or pmooses@rjofutures.com.

Sep '17 Cocoa Daily Chart

Sep '17 Cocoa Daily Chart

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Softs - Coffee

Where is September Coffee’s Selling Opportunity?

Adam Tuiaana

Very impressive and positive price action in the September coffee has presented what could be some good trading opportunities. September coffee is now testing the highs from May and this area should pose some very strong resistance. In the near term, there have been some supply concerns, which have helped to lend some support. In addition, we’re seeing some good weather premium due to a drastic drop in temperature throughout major coffee-growing areas in northern Brazil. Since even the slightest weather abnormality can cause drastic volatility in commodity prices, traders have jumped on board this intermediate uptrend wave. However, keep in mind that for short sellers and others that are bearish, this should present a key opportunity to step in and short the futures, as prices are very close to resistance levels.

On the daily chart of September coffee below, we can see prices are aggressively testing the 13560 high from May 31. At this level, we can see that prices have also violated a significant downtrend that has been in place since January of this year. From a risk-reward perspective, a short position could be advised, which would risk slightly above the aforementioned resistance area.

If you have any questions or would like to discuss the markets further, please feel free to contact me at 866-536-8601 or atuiaana@rjofutures.com.

Sep '17 Coffee Daily Chart

Sep '17 Coffee Daily Chart

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Agriculture - Grains

Daily Market Update - Grain Futures - 7/21/2017

Stephen Davis

Lack of rain continues to concern farmers and traders. How will this growing season turn out?

If you have any questions or would like to discuss the markets further, please feel free to contact me at 800-367-7181 or sdavis@rjofutures.com.

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2017 EURUSD Reversal Sights Key 1.19 Hurdle Next

Yesterday's accelerated continuation to yet another round of new highs above Tue's 1.1584 high leaves yesterday's 1.1479 low in its wake as the latest smaller-degree corrective low the bear is now minimally required to break below to even defer, let alone threaten 2017's major reversal/uptrend. In this regard that 1.1479 low is considered our new short-term risk parameters from which shorter-term traders with tighter risk profiles can objectively rebase and manage the risk of a still-advised bullish policy and exposure.

Euro Index 240 min Chart

Only a glance at the daily chart below is needed to see that the trend is up on all scales and should not surprise by its continuance or acceleration.  ALL levels of any technical merit currently only exist BELOW the market in the forms of former resistance-turned-support like Tue's 1.1584 high and prior corrective lows like 1.1479 and, on a scale commensurate with this longer-term daily chart, 20-Jun's larger-degree corrective low at 1.1118, the key risk parameter this market is required to fail below to break 2017's major uptrend...

Euro Index Daily Chart


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S&P Reaches New All Time High

Bill Dixon

The grind higher continues today as the September mini S&P printed yet another new all-time high at 2476.25 earlier Thursday morning. While we have backed off the highs slightly, a green close would mark the tenth day in a row that the mini S&P has managed to settle higher on the day. We’ve had some favorable earnings results to provide a bit of a boost, but I’m somewhat surprised that the market has been able to stay afloat as well as it has given the lack of anything meaningful coming out of Washington. The healthcare reform bill was shot down yet again, and it also doesn’t appear we’re all that much closer to tax cuts. Both of these have been cited as potential catalysts for the next move higher, but I’ll believe it if and when I see it. With a light news schedule tomorrow, I believe traders will continue to monitor earnings results, any progress out of the political arena, and next week’s data for direction. Tuesday kicks off another FOMC meeting and GDP will be released on Friday, July 28.

If you have any questions or would like to discuss the markets further, please feel free to contact me at 800-669-5342 or bdixon@rjofutures.com

Sep '17 E-mini S&P 500 Daily Chart

Sep '17 Emini S&P 500 Daily Chart

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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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