March 29, 2018

Volume 12, Issue 13

Feature Article

Upcoming Webinar

Trading Agricultural Futures

Trading Agricultural Futures

Wednesday, April 4 at 4 p.m. CT

In this session you will learn:

  • Keys to understanding the agricultural markets
  • Benefits of trading agricultural futures
  • What to consider before trading this market
  • Basic technical analysis techniques on the ags

Register Now

__________________________________________________________________

Become an Echo Leader

Echo Leader Video

Attention Professional Traders:

RJO Futures is currently looking for Echo Leaders to join the RJO Echo Trading platform. If you are a successful trader you should consider sharing your trades on RJO Echo Trading.

Get Rewarded for Your Success!

As an Echo Leader you get rewarded in cash for your trading prowess. You choose how much to charge your Echo Follower subscribers for monthly access to your trades and then simply trade your account. We take care of the rest.Those Echo Leaders that trade well should attract more subscribers, and will therefore be able to charge a higher monthly subscription rate as their trading results justify. Automation takes care of all the client registration and billing so Echo Leaders are free to focus on what really counts – trading!

Learn More

To top

Metals - Gold

Will Gold Find Support at Current Levels?

Nicholas DeGeorge

In the early morning trade, June gold is slightly down and has extended its three-day selloff, which it’s currently trading at $1,327.0. The two previous days were sizeable selloffs from the high of $1,362.2, so the shiny one is now down $35 dollars and trying to find some support at theses levels. The news earlier in the week that the US and China were working out some trade issues was the main cause of this three-day selloff. However, after a $35 selloff in just three days and with the US dollar selling off today, look for some support in gold at these levels.  Furthermore, the US is still warning China about their ongoing tech piracy, so that can also find more gold bulls at these levels as well.

If we take a quick look at the daily June gold chart, we will find some technical support levels. The bearish trend line that gold broke above and held on March 21 is getting retested and now should act as support. Furthermore, if you take the low of December 12 and the most recent low of March 20, there is a bullish trend line that comes in roughly at $1,319.0 today. Both trend lines are at roughly the same price and should act as solid support for the shiny one. I highlighted these support levels below on our RJOF PRO daily June gold chart.

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.

Gold Jun '18 Daily Chart

gold_jun18_daily_chart

To top

Bitcoin

Bitcoin Futures Entering into a Contango Market

Phillip Streible

A contango market essentially means that the futures contracts are trading at a premium to the spot price. The best way to view if a market is in a contango is to look at the daily settlement price data of the underlying futures contract from the exchange and look at the series of months going farther out over time. If prices are more expensive this is a contango, if prices get cheaper this is called backwardation.

Often times we see contango markets in other commodities such as grains, metals and energies and work to the benefit of the hedger who is trying to lock in prices for forward production. In this case it would be the bitcoin miner who would benefit. 

This comes as bitcoin itself has dropped significantly, continuing to decline from the March highs of $11,700 and most recently testing support at $7,700. The most recent blow to prices came from an announcement that Twitter would ban cryptocurrency ads. We have seen similar bans by Google and Facebook while as regulatory news has also been another negative driver of prices over the past months.

What this means for prices going forward is we should continue to see the larger bitcoin miners try and take advantage of this contango opportunity while the shorter term speculators could see a break below $7,700 and a retest of the all time futures contract low of $5,970. So I would be cautious until we can see some signs of strength come back into the market.

If you have any questions or would like to discuss the markets further, please feel free to contact me at 800-438-4805 or pstreible@rjofutures.com.

Bitcoin Daily Chart

bitcoin_daily_chart

To top

Energies - Crude Oil

Is Oil Poised for Pattern Shift?

Michael O'Donnell

As of Thursday morning, the last day in a holiday shortened week, the May crude oil contract is trading at $64.33 per barrel.  As the market weighed the EIA number yesterday, many market participants are also eyeing what may come to be seen as momentous developments around the world, especially the developments between Saudi Arabia and Russia and first week of trading of a Yuan denominated oil contract. Market participants must monitor any developments regarding the extension of OPEC production curbs/agreements between Saudi Arabia and Russia.

From a technical perspective, the market is consolidating ahead of a three-day weekend, and a number of technical levels pictured below may be considered.  For instance, the market has seen levels such as $66.66, $66.55 and $66.41 act as resistance as trade has headed lower from that point.  Considering the hourly two-point trendlines pictured below, the $64.22 level may be used as a focal point and trade beyond the $64.85 and $63.74 should warrant attention. Of course, this is on an hourly timeframe and there are a number of ways to use these levels through futures and options as well as a combination of both.

If you have any questions or would like to discuss the markets further, please feel free to contact me at 800-367-7290 or modonnell@rjofutures.com.

Crude Oil May '18 60min Chart

crude_oil_may18_60min_chart

To top

Energies - Natural Gas

Less than Expected Draw in Natural Gas

Jeff Ratajczak

Natural gas is riding a four-day uptrend.   Nearby support is at 2.600-2.610.  After that, December’s low of 2.504 is long-term support.    2.831 is resistance.   A close above the resistance number could signal a run to the January highs of 2.951.  RSI and MACD are trending up and could help a move to the upside.   A close below 2.600 will may signal a selloff to the previous lows, sub 2.500 can be a realistic target.

The near-term forecast is for cool weather, but spring time signals for less heating demand.   Demand for electricity for cooling still hasn’t kicked in.  So, the bulls will have some other news to keep grip on the market.  Funds have a good size net long position, so before the demand decreases for heating, they might want to take profits.  A draw of -75 bcf is expected.  This is slightly larger then average and may support the market today.  The 5-year average is closer to -50 bcf.  Going into the long Easter weekend, I’d be cautiously long today.

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.

Natural Gas May '18 Daily Chart

natural_gas_may18_daily_chart

To top

Softs - Cocoa

Holiday Weekend, End of Q1, Cocoa Rally Coming to an End?

Peter Mooses

Some traders have been preparing for cocoa to come off the recent highs by buying puts, others have been riding this wave higher as long as possible. Futures prices will need some more bullish news to stay above 2600 even though the chart is showing us the market is building technical support. The May chart has been able to avoid a drop and hold below 2560 – but levels are overbought. A selloff could be in the works if profit-taking grabs a hold of the market as traders start to position further out strategies.

Fresh global demand news will be needed to keep prices at current levels. Currencies continue to add volatility and short-term demand clues as the pound, euro and dollar activity has backed-up moves in cocoa futures. With the shortened trading week due to the holiday weekend and traders exiting their quarterly positions, expect lighter volume and increased volatility.

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.

Cocoa May '18 Daily Chart

cocoa_may18_daily_chart

To top

Softs - Coffee

Continued Bearish Picture for May Coffee

Adam Tuiaana

There is no real change from the past couple of weeks for coffee. The bears are still solidly in control, with a large Brazilian crop on the horizon, strong US dollar and favorable weather throughout many of Brazil’s growing areas. From a technical perspective, ongoing violation of critical support areas (most recently 11690) continue to paint an extremely bearish picture for traders. As it stands, I am very comfortable with short, long term positions using long put options that allow exposure and leverage, while managing risk effectively. Expect more of the same for the foreseeable future.

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.

Coffee May '18 Daily Chart

coffee_may18_daily_chart

To top

Agriculture - Grains

Ag Markets See Volatility on Fear of Potential Trade War

The USDA report is due to release Thursday March 29th at 11 am (cst) and will include the quarterly stock numbers on wheat, soybeans, and corn as well as the prospective planting intentions.

The agricultural markets have picked up in volatility recently. Initially it was due to the drought in South America sending these markets into a rally but that has rounded out now and our focus has shifted to fear of the potential trade war. China has made threats to retaliate against the United States. If they did take action and reduce the number of agricultural products they want to import we could see the market account for that initial loss in demand given the fact that china is the world’s largest buyer of soybeans. These ag markets don’t like this current uncertainty, however at the end of the day China has limited options -- at least for the time being. It relies primarily on North and South America for these crops. China’s growing population and U.S. producers need each other and there should be plenty of room to find middle ground rather than taking extreme measures. There has also been an increase in the demand of corn from China as well. They have been utilizing ethanol to reduce pollution by blending this renewable fuel into its gasoline supply. Therefore, I believe we can anticipate these market demands to remain strong, however definitely look to utilize strategies that can mitigate that risk in case the market trends do start to shift.

The estimated planting intentions of the farmers is looking to break record numbers anticipating a soybean acreage estimate of a little over 91 million acres. Corn average estimate is 89.4 million acres compared to last year’s 90 million acres planted. Corn does cost more to put into the ground compared to beans which is what could also be encouraging farmers to plant more soybeans over corn. Wheat has shown sub-par demand and has an average planting estimate of 46.29, which is almost the same as last year’s 46.01 however just slightly higher.

Overall, I think we can expect to continue following the anticipated trends unless there is some substantial news that shifts the world’s agricultural economy. We are expecting it to be a rainy spring, but April showers bring May flowers and I think all of us here in Chicago are looking forward to that. Please note that all markets will be closed tomorrow, March 30th. From our RJO Futures family to yours I wish you a happy and healthy holiday!

If you have any questions or would like to discuss the markets further, please feel free to contact me at 888-861-1282 or lsapato@rjofutures.com.

Corn May '18 Daily Chart

corn_may18_daily_chart

To top

Currencies

US Dollar Holds a Slight Edge into a Large Amount of Data

Tony Cholly

Dollar: While a slightly positive dollar track is seen from the charts into the initial high today, the index sits roughly 130 points above this week’s lows and the bulls might need mostly positive data flows to extend another leg higher.  However, there is a large amount of scheduled US data today and therefore the prospect of an outlier result would seem to be high.  With the USD also returning to the vicinity of a three-month consolidation zone the risk to fresh longs would appear to be on the rise.  The market is now above the 60-day moving average and suggests for a longer term up-trend.  Resistance comes in at 9019 and 9050 with support at 8930.

Euro: With the euro ranging down sharply early today in the wake of a rather active flow of scheduled data, it is clear that growth measures in the euro zone were disappointing to the euro overnight.  In the event that personal income and spending figures from the US are even slightly positive that could quickly extend the slide in the Euro.  Resistance comes in at 1244000 and 1252700, while first support comes in at 1231500 and 1228000.

If you have any questions or would like to discuss the markets further, please feel free to contact me at 800-826-2270 or tcholly@rjofutures.com.

U.S. Dollar Jun '18 Daily Chart

dollar_jun18_daily_chart

Euro Jun '18 Daily Chart

euro_jun18_daily_chart

To top

Interest Rates

Further 10-Yr T-Note Correction Defines New Risk Parameters



Tuesday afternoon and overnight's bust-out above the past 3-1/2-weeks' 120.23-area resistance reaffirms the recovery from 15-Feb's 119.14 low in the Jun contract and leaves Mon's 120.11 low in its wake as the latest smaller-degree corrective low this market is required to sustain gains above to maintain a more immediate bullish count. Per such this 120.11 level is considered our new short-term risk parameter from which a neutral-to-cautiously-bullish policy can be objectively rebased and managed. Also, former 120.28-to-120.23-area resistance would be expected to hold as new support if the market has something more bullish in store for us.

Against the backdrop of the major uptrend in 10-yr rates shown in the daily log scale chart below, the past month's relapse remains well within the bounds of a mere correction ahead of an eventual resumption of the broader move higher. This said, strength above Mon's 2.86% minor corrective high (analogous to the 120.11 level in the Jun contract) is minimally required to threaten this relapse, render it the 3-wave and thus corrective affair we suspect it is, and re-expose the major move higher. In lieu of such 2.86%+ strength traders are advised not to underestimate the depth of this intermediate-term slide in rates (rally in the contract). Former 2.79%-area support is considered new near-term resistance expected to hold if the market has a steeper rate slide ahead.

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

note_daily_chart

To top

Equities

Stocks Higher Heading into Open Before Long Weekend

Bill Dixon

Stocks seemed to have carved out a small measure of support so far this morning.  All of the major indices are higher thus far today, after falling a bit short of reaching the lows we saw in February.  The E-mini S&P has been bouncing off the 200-day moving average all week, but the rallies have been rather insignificant or swiftly rejected.  The Nasdaq and mini Dow have done a better job hovering above theirs, but have also struggled to hold any meaningful moves to the upside.  The tech sector seems to have been a dark cloud hanging over the markets with the Facebook data issues, rumors that Trump is looking to take on Amazon, Tesla getting crushed, etc.  Whether today’s early bounce is a bit of short covering ahead of the long weekend or traders just looking to take advantage of cheaper pricing remains to be seen.  Technically speaking, it appears that the lower levels were at least worth taking a shot at, but it remains to be seen if this rally can actually hold.

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.

E-mini S&P 500 Jun '18 Daily Chart

e-mini_s&p_jun18_daily_chart

To top


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.

DISTRIBUTION IN SOME JURISDICTIONS MAY BE PROHIBITED OR RESTRICTED BY LAW. PERSONS IN POSSESSION OF THIS COMMUNICATION INDIRECTLY SHOULD INFORM THEMSELVES ABOUT AND OBSERVE ANY SUCH PROHIBITION OR RESTRICTIONS. TO THE EXTENT THAT YOU HAVE RECEIVED THIS COMMUNICATION INDIRECTLY AND SOLICITATIONS ARE PROHIBITED IN YOUR JURISDICTION WITHOUT REGISTRATION, THE MARKET COMMENTARY IN THIS COMMUNICATION SHOULD NOT BE CONSIDERED A SOLICITATION.

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.

© 2018 RJO Futures
222 South Riverside Plaza | Suite 1200 | Chicago, Illinois 60606
800.441.1616 | 312.373.5478

 To top