TRADES FOR WEDNESDAY, SEPTEMBER 12, 2017
EMOTION is your enemy more than any market will ever be.
GRAIN REPORT CONSTRUCTIVE? How could that be when the grains sold off in reaction? Technically the reaction to the grain report was supportive (in spite of the selloff) and the markets showed that by all rallying and taking back almost half of the selloff. And they all held previous lows. This action could be a confirmation of the current contract lows. Keep in mind after the August grain report they all sold off too but, unlike today, they all (except bean oil) took out the lows they had established earlier that month and continued to selloff. That did not occur this time when they had every reason to do so. Technically when a market does that it is attempting to confirm bottoms that they refused to do before. The next step is for them to confirm this. In that sense, yes, the grain report was constructive.
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Buy December wheat. Buy 444 stop. Protective stop 428. Potential projection 470. (Potential risk $800. Potential reward $1300). Margin: $1400.
Reasons for the Trade:
1. On the monthly chart the recent selloff (that bottomed last month) held at the downtrend line that wheat formed since the July 2012 high. It had broken out over that downtrend in March and it appears the recent selloff was a test of that breakout. It is holding that level again this month. That is positive.
2. The monthly chart formed a reversal bottom last December that is still intact, suggesting a trend change from down to up.
3. On the weekly chart the recent reversal bottom formed at that downtrend line, suggesting a trend change from down to up. That's positive.
4. On the weekly chart the macd has turned up.
5. The weekly chart has a reversal bottom.
6. The daily chart has a reversal bottom that is still intact.
7. On the daily chart wheat rallied and closed back over both the 10 & 20 avg. today. That’s supportive.
8. Today was an outside day that can trigger a signal and market direction.
Buy December bean oil. Buy 35.45 stop. Protective stop 34.62. Potential projection 39.50. (Potential risk $498. Potential reward $2430). Margin: $850.
Reasons for the Trade:
1. The monthly chart has a buy signal.
2. On the monthly chart bean oil continues to hold at the 200 avg. support.
3. On the monthly chart bean oil continues to suggest a third wave up.
4. On the weekly chart the current selloff held at support.
5. On the daily chart today’s selloff held at the 20 avg. support and rallied.
6. Today was an outside day that can trigger a signal and market direction.
DEC CORN: Corn dropped like a rock after the report triggering a sell from yesterday’s outside day. Corn rallied back holding its contract low and reversal bottom on its weekly chart made two weeks ago. After the last USDA report in August, corn did not hold its previous low. The same day of the report it took out that low and started a new wave down. So today’s reaction needs to be watched closely. Closed 351 1/2, down 6.0.
DEC WHEAT: I tried to buy wheat again but the price was not reached. Today it formed an outside day and rallied to close back over both its 10 & 20 avg. on its daily chart. That is positive. A trade could be developing. See Trade Alert for details. Closed 442, up 7 1/4.
NOV BEANS: They sold off today but quickly responded when they reached support down around 940 and rallied. They closed back over the 20 avg. That is positive. Watching closely to buy. Closed 950 1/2, down 9 1/2.
DEC MEAL: It sold off today but held its contract low. It rallied to close back over the 300.00 support. Watching closely to buy. Closed 300.00, down 3.60.
DEC BEAN OIL: It sold off to its 20 avg. and held. A trade could be developing. See Trade Alert for details. Closed 35.19, up .04.
OCT HOGS: Yesterday’s inside day triggered another sell today and a second gap. The selloff took out the August 29 low. Both long term charts suggest further selloff. Closed 58.45, down 2.12.
OCT CATTLE: They triggered a sell from yesterday’s inside day. They did hold at support though. Either way they are a weak market in comparison to the feeders but this has been the pattern during the entire downtrend. Closed 106.27, down .92.
OCT FEEDERS: They may not make it to the 151.00 potential mentioned before. They are already struggling around 149.00 even though they closed over it both yesterday and today. They also formed a reversal top today. That is potentially negative. Closed 149.15, down .20.
DEC COTTON: Last Friday cotton reached 75.75. It has been downhill ever since. It collapsed on Monday and today it’s down limit. I had mentioned that the rally was promoted by not only the hurricane that reached Texas but also Irma that could work into cotton territory in the south. Apparently it was a classic buy the rumor, sell the fact example. Technically on its monthly chart it is backing off again from the 75.00 resistance that has plagued this market since it failed it in mid 2014. The monthly chart triggered a buy last month and that is still intact. It would have to take more than this to change that. Right now cotton on that chart looks headed for the 68.40 support or even 68.00. Just like the rally, this selloff is being overdone and will probably set up a buying opportunity. This is what happened in August 2016 on its weekly chart. It had a nasty selloff very similar to what we’re seeing now. It held support, consolidated and rallied. Watching closely to buy. Closed 69.11, down 3.00.
NOV ORANGE JUICE: After a huge range yesterday it took out that range’s high today. For the last three trading days it has been attempting to get over its 200 avg. on its daily chart. After failing it yesterday, it is right back over it today. Yesterday it filled its second gap formed last Friday. On its monthly chart it is over resistance too. But on its weekly chart it is butting up against its 100 avg. this week. I suspect it will eventually get over it since it has that gap up at 165.15 on that chart. But it has not gone back down to test its breakout from the consolidation under 140.00 yet. Just watching. Closed 157.15, up 5.70.
DEC COFFEE: Today it reached its 100 avg. on its daily chart. It is also over both the 10 & 20 avgs. on that chart. It is also back over its 200 avg. on its monthly chart. So where could this rally go? Based on the monthly chart 141.40 is where it will reach resistance. But its weekly chart is giving mixed signals. The recent selloff abruptly stopped and that chart is suggesting a potential 1,2,3 bottom formation. If it is, this current rally has a potential up to 156.00. But in the meantime it has several resistance levels to get over first and is clearly still in a downtrend. Closed 135.05, up 3.20.
DEC COCOA: It triggered a buy today. Keep stops at 19.10. Closed 19.51, up .17/
Position: Long 19.45 (9.12).
OCT SUGAR: It triggered a buy today and then sold off. Keep stops at 13.78. Closed 14.02, down .27.
Position: Long 14.37 (9.12).
Trading commodity futures and options involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge and financial resources. Opinions are subject to change at any time and are a solicitation or recommendation to buy or sell futures contracts or options on futures contracts. The information contained in this message has been obtained from sources believed to be reliable but is not guaranteed as to its accuracy or completeness. All known news and events have already been factored into the price of the underlying commodities discussed.
Past performance is not indicative of future results. All suggested trades are based on technical signals/indicators and do not include slippage or cost. Not all trades suggested are taken. Results are based on what the signal indicates not necessarily an actual trade. Actual results may vary.
Futures, options and forex trading is speculative in nature and involves substantial risk of loss. These recommendations are a solicitation for entering into derivatives transactions. All known news and events have been factored into the price of the underlying derivatives discussed. From time to time persons affiliated with Zaner, or its associated companies, may have positions in recommended and other derivatives.