March 8, 2019

Volume 13, Issue 10

Feature Article

RJO Futures PRO Online Trading Platform

To top

Metals - Gold

Gold In Bearish Trend

Nicholas DeGeorge

In the early morning trade, April gold is currently trading up $14/oz due to this morning’s non-farm payroll numbers reporting a meager 20,000 jobs added in February, which is the smallest increase in 17 months and maybe signs of a slowdown in the economy.  The shiny one acted as a safe-haven off the announcement and investors and traders alike flocked back in to buy off these nearly six-week lows and currently trading at $1,299 an ounce. However, besides the technical uptrend being broken in gold, which I’ll get to in a moment, you have good data in this report like the two previous months being revised up by 12,000. The unemployment rate fell to 3.8% from 4.0% and unemployed workers tumbled by 300,000, and another surprise was the continued strength in average hourly earnings topped both monthly and annual estimates with a 0.4% rise from January and 3.4% from a year earlier, the fastest pace of the economic expansion. 

Take a quick look below at the daily April gold chart and you’ll clearly see between February 27th & 28th that it’s bullish trend which was started back in November was technically breached by trading below causing it to sell off roughly another forty dollars an ounce. The shiny one again is approaching the $1,300 handle; however, I highlighted below a short term bearish trend line along with a bearish moving average pattern which the 20-day is sloping down looking to cross below the 50-day moving average. If this bearish moving average pattern happens it can perhaps cause golds sell off to continue at least a little while longer.

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 April '19 Daily Chart

Gold Apr '19 Daily Chart

To top

Metals - Silver

Critical Support Level in Silver

Frank J. Cholly

May silver futures have traded both sides of $15.00 this morning. This is a critical support level after having pulled back $1.30 since posting a new swing high of $16.295 on February 20th. Technical traders are calling that swing high a “double top” now. The market correction is not limited just to silver, gold has had a big down side correction also as traders exit the “safe-haven” trade.

I view this correction in silver as a good long term buy opportunity. Silver is relatively cheap at $15.00 and clearly there is big support at this level. It is usually just a level on the chart that stops and reverses a market’s direction. I would expect that the market takes a breather at this level as the selling seems to be exhausted now. It’s still too soon to call a bottom in silver, so give it some time to base a new bottom.

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

Silver May '19 Daily Chart

Silver May '19 Daily Chart

To top

Energies - Crude Oil

Crude Oil Poised for a Move

Michael O'Donnell

As of Thursday morning, the April crude oil contract continues to oscillate around the 100-day moving average, as I mentioned in my previous post 2 weeks ago. Traders factoring in yesterday’s increase in inventories from the EIA number, which showed a 7.1 million barrel increase, as well as equity indices which have been pausing if not possibly toppy or turning should find interest in the market’s proximity to the trendlines pictured in the chart below.

The falls from October’s high and the rise from December’s low are coinciding with the recent weeks’ consolidation to form a possible breakout.  While there is no shortage of fundamental chatter whether it be from heads of state, OPEC, the middle east, Venezuala, refining, exports, etc., this technical formation should lead consideration in my opinion. As noted previously, the $55 level, trendlines pictured below, and averages should be monitored and could be used when considering a trading strategy

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 Apr '19 Daily Chart

Oil Apr '19 Daily Chart

To top

Energies - Natural Gas

Natural Gas Waiting on Weather to Change

Jeff Ratajczak

Natural gas for April delivery has been trending higher, but seems that after forging out a new high of $2.896 yesterday prices are beginning to slide. The bulls will stay in control to around $2.800 on the close. A close under $2.785 will signal a takeover by bear forces. Resistance comes in at $2.900, but that number is being overlooked by the industry as warmer weather is forecast for the coming week and after that.  Support is found $2.765, and a real washout will take us to $2.700 and below.  Momentum studies seem to be trending lower on daily charts.  A move in that direction should accelerate.

This week’s storage numbers were estimated at -141 bcf for the past week. The actual storage number was higher than that. A draw of -149 bcf was reported by the EIA for this period. Once again, warmer weather was forecast for the coming weeks.  Let’s all hope winter is behind us, and spring in on the way.  March comes in like a lion and goes out like a lamb is the pattern were looking for. Both sides of unchanged prices are expected with a slight drop in price on the way.

If you have any questions or would like to discuss the markets further, please feel free to contact me at 888-874-8110 or jratajczak@rjofutures.com.

Natural Gas Apr '19 Daily Chart

Natural Gas Apr '19 Daily Chart

 

To top

Softs - Cocoa

Support in Cocoa Holds Strong as Reversal Begins to Form

Peter Mooses

After three big down days, May cocoa looks to have reversed. 2140 and 2160 held and prices enticed buyers back in Wednesday. A 115-point trading range occurred, and the market closed 84 points up. Most of the bounce came from technicals – although an increased European demand outlook may be coming. With the ECB meeting ahead of us, positive news could lead to a stronger euro which could help cocoa. Dry weather, accompanied with heat could also hurt production. This could also boost prices higher in the further out trading months. After talks of the potential record production levels for the 19/20 calendar year, these recent weather fronts could curb that. Mixed news is also keeping prices rangebound as traders anticipate higher supply levels in Ivory Coast but lower levels in other key growing regions like Brazil and Indonesia. These pending factors will continue to add to cocoa’s volatility and could have this contract headed to 2300 or 2000 by the roll in April.

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 '19 Daily Chart

Cocoa May '19 Daily Chart

To top

Softs - Coffee

May Coffee Swings Wide

Adam Tuiaana

We’ve seen massive trading ranges over the past week, spurred by fears of smaller Vietnamese crop, squaring off against large global supplies. The Hightower Group has reported that there is an “expected drier outlook in Vietnam’s Central Highlands, Vietnam’s major coffee belt, with the drought expected to last through mid-April or possibly mid-May”.This is likely what is precipitating this tug-of-war over May coffee prices, and I would expect that until we have a firmer idea of how bad the crop outlook will be for the world’s second largest producer, we will see more sideways consolidation at support levels.

On the technical side, the main area of attention was the 101 level in May coffee. This area should have acted as strong support but was violated back on February 14th. Since then, May coffee prices have found the 101 area to be formidable resistance with very large trading swings between the 96 to 101 levels. We may see the same type of sideways consolidation we experienced from December through February, before finding a clear direction. A break above 10250 should signal a run to the 50-day moving average (currently resting at 10427). A violation of the February 26th low of 9635 should signal more selling to come.

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 '19 Daily Chart

Coffee May '19 Daily Chart

To top

Agriculture - Grains

Grain Futures Update w/Stephen Davis - 03/08/2019

Stephen Davis

RJO Futures Senior Market Strategist Stephen Davis discusses the grain futures markets.  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.

To top

Agriculture - Grains

Lack of China Deal Impacting Grains

Tony Cholly

No new reports on the U.S./China trade talk front, along with no confirmation of any new major purchases of United States farm products has left the soybeans without any positive news today. A tidbit of news that can be thought of as “positive”, is the U.S. confirming they are postponing the tariff increase on Chinese goods until further notice in a published statement by the federal register. China has ratcheted up pressure on Canada by restricting canola purchases, further straining bilateral relations.  For the weekly export sales report, traders are looking for soybeans sales to come in near 650,000 to 1.2 million tonnes.  Resistance comes in at 909 and 920 with 1 support coming in at 894 an 890.

Lack of news from U.S./China trade negotiations weighed on the market yesterday.  That being said, United States weather may start to become an issue with winter conditions hanging around in the upper Midwest and plains longer than expected.  There is 5-10 inches of snow expected to fall this week in North/South Dakota, Minnesota, Iowa and Wisconsin; all of which have ample snowfall coverage already.  Similar wet years in the past saw corn prevent planted acres increase by 3.6 and 3.0 million respectively.  Resistance is at 375 and 378, while first support hits at 369 and 367.

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.

Soybeans May '19 Daily Chart

Soybeans May '19 Daily Chart

Corn May '19 Daily Chart

Corn May '19 Daily Chart

To top

Equities

Huge Miss on Jobs Number

Bill Dixon

This morning’s non-farm payroll data came out about as bad as could be expected.  What was forecast to be a number between 130,000 and 200,000 with a consensus of 175,000 came out at only 20,000.  January was revised higher by 7,000, but that still leaves us quite a bit shy of what traders were looking for on the day. It wasn’t all doom and gloom though as there were a few silver linings.  The unemployment rate dipped down 0.2% to 3.8%.  We also saw average hourly earnings rise by 0.4%, which brings the year-over-year gains to 3.4%. 

As one might have expected, stocks did not take the news very well.  Following yesterday’s weakness, stocks continue to dive with the three major indices all down at least 0.8% in the early going. Most technical indicators are forecasting more downside.  The next level of support on the June e-mini S&P is at 2680. Beyond that, we’re looking at about 2625. 

Next week features a decent slate of news.  Retail Sales, CPI, PPI, durable goods, and new home sales are some of the highlights.  While traders will be watching those numbers closely, most will be looking forward to the FOMC meeting beginning on the 19th. We’re not expecting any rate adjustments this time around, but it will be interesting to see if the dovish shift continues to gain momentum.

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 '19 Daily Chart

E-Mini S&P 500 Jun '19 Daily Chart

To top

Interest Rates

Treasury Prices on the Rise

Alexander Turro

U.S. Treasury prices are building of this week’s move and are edging higher after falling four out the previous five sessions with the benchmark 10-year US T-note falling below 2.70%. The Bank of Canada held rates steady at their latest polity meeting at 1.75%, citing slowing domestic and global growth. U.S. data released in the early morning showed the U.S. private sector added 183k jobs in February, slightly below expectations with non-farm payrolls set to report on Friday. The Fed’s beige book is set to be released later this afternoon. The yield remains bearish trend with the current risk range on the 10-yr seen between 2.60 – 2.77%. Resistance for the June 30 – year bond is seen around 145-07 with support seen around 143-22.

If you have any questions or would like to discuss the markets further, please feel free to contact me at 800-826-1120 or aturro@rjofutures.com.

10-Year Treasury Note Chart

10-Year Note 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.

© 2019 RJO Futures
222 South Riverside Plaza | Suite 1200 | Chicago, Illinois 60606
800.441.1616 | 312.373.5478

 To top