Tuesday, December 4, 2012

Calling a Top in Lean Hogs

Commitment of Traders Report Confirms Seasonal High


December 4, 2012

This trade setup is merely a random sample of the day’s trades generated by COT Signals. To track our work their and receive all of our nightly trading recommendations, click here.

 
The February lean hog contract is being hit with bearish signals from every direction. Yesterday, we published a seasonal sell signal based on the recommendation of Moor Research and this morning we have a sell signal from COT Signals which, means there is considerable commercial selling. Finally, we have a technical trigger called a , “90-10.” This is described as a continuation play in Larry Connor’s book, Street Smarts and the method was developed by Linda Raschke. The 90-10 Low Continuation signal is fired when the day's trading closes within the bottom 10% of the day's range. It tells us that yesterday's late day move lower is likely to continue on into today.
Whichever method we use to view this market, seasonally, fundamentally or, technically they all point lower. We’ll sell February lean hogs and place a protective buy stop at yesterday’s high of 87.775.

Lean Hog Futures Top   







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ANDREW WALDOCK
866-990-0777
This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation by Commodity & Derivative Adv. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.
 

Tuesday, November 27, 2012

Commercial Traders Force Expiration Rally

Commitment of Traders Report Shows Strong Build in Soybean Meal


November 27, 2012

This trade setup is merely a random sample of the day’s trades generated by COT Signals. To track our work their and receive all of our nightly trading recommendations, click here.

  Commercial traders have more than doubled their position in December soybean meal futures over the last month. Clearly they have been ahead of the curve in their anticipation of the seasonal strength the market typically shows between mid October and contract expiration. Friday is first notice day and speculators will need to be out of the market by Thursday’s close. Therefore, there is a strong possibility that the December soybean meal futures will rally on speculator short covering into the notice period. We will place a protective sell stop at the recent low of 420.2 and look to take profits by Thursday’s close.

Commitment of Traders Report Build in Commercial Position



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ANDREW WALDOCK
866-990-0777
This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation by Commodity & Derivative Adv. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

 

Wednesday, November 14, 2012

Commitment of Traders Shows Sugar Short Trap

Commitment of Traders Report Springs Bear Trap on Sugar Futures Speculators

November 13, 2012

This trade setup is merely a random sample of the day’s trades generated by COT Signals. To track our work their and receive all of our nightly trading recommendations, click here.


This morning’s trade in the sugar futures market takes a look at the peculiarity of, “roll over.” When futures markets expire traders must determine whether they are going to make delivery of the commodity, take delivery of the commodity or, the vast majority of the time, offset the position and move into the next available expiration. This meant offsetting October positions and creating a new position for March delivery.
Short covering in the October contract forced the market back towards 21.50. New selling was unable to push the market below the October contract low of 18.81. Commercial momentum has turned positive and we view this as a short trap for the speculators. We have bought March sugar futures and placed a protective sell stop at 18.86.
 


ANDREW WALDOCK
866-990-0777
This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation by Commodity & Derivative Adv. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

Monday, November 5, 2012

Commitment of Traders Sell Signal in Australian Dollar

Key Reversal Bar Triggers Short Sale in Australian Dollar

November 11, 2012

This trade setup is merely a random sample of the day’s trades generated by COT Signals. To track our work their and receive all of our nightly trading recommendations, click here.

This morning’s trade in the Australian Dollar Futures ties uses both fundamental and technical analysis. Fundamentally, the commercial traders are bearish on the Australian Dollar. Recent speculative buying pushed the market to overbought levels heading into Friday’s trade.
Technically, we saw just how weak the speculative hands are in the market as the Australian Dollar put in an outside day closing below Thursday’s low. This is especially important as Friday’s high marked a new 30 day high and was followed by an immediate washout.
We are selling the Australian Dollar Futures and placing a protective buy stop at Friday’s high of 103.84. This represents about $600 in risk at current market levels.

Key Reversal Bar in Australian Dollar Futures
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ANDREW WALDOCK
866-990-0777
This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation by Commodity & Derivative Adv. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

Thursday, September 6, 2012

Commercial Traders Sell Soybean Oil Futures


September 6, 2012



This trade setup is merely a random sample of the day’s trades generated by COT Signals. To track our work their and receive all of our nightly trading recommendations, click here.



Commercial Trader Selling in Bean Oil Futures

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Commercial traders have been aggressively selling soybean meal since the July high of 55.19. This is a clear adjustment in their expectations of the soybean crush as soybean by products become less desirable as feed to their increasing cost. Yesterday’s inside bar coupled with a Commitment of Traders sell signal provided a low risk entry for a counter trend trade. We sold soybean meal futures on the overnight penetration of yesterday’s low at 55.25. Normally, we would place our protective buy stop at the swing high. However, the inside bar setup allows us to place our stop tighter, at yesterday’s high of 58.24. We are looking for a 1/3 retracement from the June lows through this week’s high. This gives us a target of 55.17.

ANDREW WALDOCK
866-990-0777
This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation by Commodity & Derivative Adv. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.
 

Thursday, August 23, 2012

Commitment of Traders Buy Signal in 30yr Bond Futures

Commercial bond buying reinforces equity sell off.

August 23, 2012

This trade setup is merely a random sample of the day’s trades generated by COT Signals. To track our work their and receive all of our nightly trading recommendations, click here.

Commercial Traders Buying Bonds
This morning we have a buy signal in the 30yr Bond futures. Commercial traders were major buyers coming off of the March lows and finally started to shed their positions as the market climbed above 148. Their selling patter became quite clear as the market stalled between May and June before finally selling off in July and August. Commercial traders are now actively re-purchasing contracts.
This also ties in with the sell signal we posted yesterday in the Dow futures. We expect bond futures to rally as money finds its way into safe havens in anticipation of an equity sell off. Finally, the Federal Reserve Board minutes seem to be pointing towards QE3. This will further depress yields and lead to greater price gains in the futures.
We will buy bonds and place a protective stop below the swing low at 145^08.

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ANDREW WALDOCK
866-990-0777
This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation by Commodity & Derivative Adv. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

Wednesday, August 22, 2012

Key Reversal Triggers Dow Sell Signal

Commitment of Traders sell signal triggered by key reversal bar.


August 22, 2012

This trade setup is merely a random sample of the day’s trades generated by COT Signals. To track our work their and receive all of our nightly trading recommendations, click here.

 
The Dow made a new four month high at 13308 yesterday. The new high was masde on declining volume and open interest and the market was unable to hold the new level leading to a key reversal bar.
This is a classic example combination of technical and fundamental factors coming together to create a solid trade setup. The Commitment of Traders commercial traders have been selling the Dow for the entire rally, paring more than 50% of the long position they accumulated at the June lows. Fundamentally, we discussed the overvalued nature of the equity markets in last week’s blog. Finally, the key reversal bar at 90 day highs is technical analysis 101. We have sold the Dow futures and placed our protective stops at yesterday’s swing high of 13308. 

Key Reversal Triggers Dow Jones Sell Signal



ANDREW WALDOCK
866-990-0777
This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation by Commodity & Derivative Adv. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

Tuesday, August 14, 2012

RBA Caps Commercial Interest in Australian Dollar


Royal Bank of Australia Leaves Interest Rates Unchanged

Commercial Traders Continue to Unwind Largest Position in Years.

 


The Australian Dollar has rallied approximately 10% since the beginning of June. Commercial traders were well prepared for this, having built up their largest position in more than 10 years through the month of May. However, as the rally progressed, commercial traders began to take profits. Much their exit was due to the Royal bank of Australia’s pending interest rate decision. They left rates unchanged on August 10th. This should effectively cap the rally as much of the incentive has been taken out of the market. The recent topping action is therefore, a combination of technical (see ARSI), Fundamental, (commercial trader and news event (RBA rate decision.) We are selling the Australian Dollar Futures and placing a protective buy stop above the swing high at $1.0578. 




ANDREW WALDOCK
866-990-0777
This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation by Commodity & Derivative Adv. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

Friday, August 10, 2012

Gas Prices Jump More than Expected

The recent jump in gas prices were expected to be much more gradual. We saw commercial traders as strong buyers of crude oil below $80 as June came to a close. We firmly believed that this would be the bottom of the cycle as the national average fell to $3.30 per gallon. What no one expected were the simultaneous mechanical failures of some of the main pipelines and refineries. This has caused the price of petroleum products like heating oil, gasoline and diesel fuel to skyrocket by 25% in little more than one month.
The refineries here in the U.S. use about 9 million barrels of crude oil per day. The last two weeks has seen nearly 2 million barrels per day taken off supply as unplanned shutdowns due to various mechanical issues and fires have popped up across the country. Further adding to the refinery issues is a cutback in supply that will be coming from Canada due to a leak sprung in the Enbridge pipeline, which has spilled more than a thousand barrels of unrefined crude oil in central Wisconsin. Enbridge has fallen under increasing regulatory scrutiny, as this is just the latest of a trail of pipeline failures. The most notable was a 2010 incident, which dumped 20,000 barrels of oil into the Kalamazoo River.
Mechanically, major refiners near Chicago and San Francisco have both been shutdown. There are two refineries that have been shutdown simultaneously in the Chicago area and both of them are among the 10 largest refiners in the country with the Whiting, Indiana facility ranking 7th and the Wood River, Illinois facility ranking 10th. These outages combined to raise the price of gasoline in the Chicago area by more than $.44 in less than a week. The Chevron facility in Richmond, California is responsible for 10% of the gasoline production on the west coast. Reports are conflicted on the how long these refineries will be out of operation. Estimates range from weeks to months on each individual facility with consensus that the Chevron facility in Richmond will probably be out of service the longest.
Political and fundamental factions had already begun battling over the true value of crude oil from March through July. This is seen as the battle between speculators and commercial traders. Commercial traders had been heavy sellers of crude oil futures from March through May when the market was trading above $103 per barrel based on Iranian threats and general unrest in the Middle East, which led to speculative buying. These threats were competing with a market that was massively over supplied. Eventually, over supply won and the Commitment of Traders analysis generated sell signals at both $109 and $106 per barrel. June’s precipitous declines moved commercial traders to the buy side as they covered short positions and increased their positions by more than 30% during the month of June.

Commercial Traders in the Crude Oil Market


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The final fuel to this petroleum rally is the expectation of further government stimulus to the economy. We’ve suggested over and over that the key to the upcoming election is the domestic economy and recent polls concur. The biggest thing President Obama could do to help himself would be to force a resolution in the Eurozone. The markets hate uncertainty and any conclusion to the drawn out death spiral of Ireland, Portugal, Spain and Italy would create a huge relief rally in the stock market. However, since his sphere of influence doesn’t extend far past our shores, he’ll do the next best thing by flooding the market with Dollars, which will lead to nominally lower interest rates and show that he is taking action.
Regrettably we will bear the unintended consequence of higher gas prices as our Dollar is devalued on the global market and our refineries find it more profitable to ship finished petroleum products overseas, rather than sell them on the domestic market.

This blog is published by Andy Waldock. Andy Waldock is a trader, analyst, broker and asset manager. Therefore, Andy Waldock may have positions for himself, his family, or, his clients in any market discussed. The blog is meant for educational purposes and to develop a dialogue among those with an interest in the commodity markets. The commodity markets employ a high degree of leverage and may not be suitable for all investors. There is substantial risk of loss in investing in futures.

Monday, July 23, 2012

Commitment of Traders Report to Cap Coffee's Rally

Commercial Traders Nail 20% Rally. Anxious to Take Profits.

Classic Commercial trading pattern mimics the rise and fall normal market behavior.

 

July 23, 2012

This trade setup is merely a random sample of the day’s trades generated by COT Signals. To track our work their and receive all of our nightly trading recommendations, click here.

We published a buy recommendation in the coffee futures market on June 22. We suggested that based on the movement we saw in the Commitment of Traders Report as well as the discrepancy between JO, a coffee ETF versus the coffee futures, that the coffee futures market had become oversold and commercial traders were building a base to force short covering in the futures market.
The coffee futures market has rallied 20% since then and commercial buyers from one month ago have turned sellers. Commercial sellers have pared their position by 23% in the last three weeks. The heavy selling has turned momentum negative while Thursday and Friday’s action created a reversal and sell signal from overbought levels. We will be selling September coffee futures and placing a protective stop above Friday’s high of  190.85.
Commitment of Traders shows reversal in Commercial positions.

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ANDREW WALDOCK
866-990-0777
This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation by Commodity & Derivative Adv. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

Wednesday, July 18, 2012

Double Top in 30yr Treasury Bond Futures

Commitment of Traders Report Shows Bearish Commercials

Commercial traders shed half their position in last six weeks.

July 18, 2012

This trade setup is merely a random sample of the day’s trades generated by COT Signals. To track our work their and receive all of our nightly trading recommendations, click here.




Commercial traders have been placing heavier bets on a rise in yield for long dated Treasuries. This is most obvious in the 30yr Treasury Bond futures. Commercial traders have cut their position by more than half in the last six weeks. This move also fits in with the action in the interest rate sector we discussed in mid June in, “Fear and Inflation.”
Briefly, we discussed the very light buying of Treasury futures during May’s equity sell off. Their buying was substantially less than would be expected during a flight to safety rally. Finally, we pointed out a piece by Crestmont Research on interest rate volatility and using their analysis came up with a price envelope for December Bond futures of 154^20 on the high side and 140^06 on the low side. Extrapolating this to the September contract we are currently trading and we get 153^17 high to 138^30 low. We will be selling 30yr Treasury Bond futures and placing our protective stop above the swing high at 152^10.


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ANDREW WALDOCK
866-990-0777
This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation by Commodity & Derivative Adv. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

Thursday, July 12, 2012

Commercial Traders Selling Corn Rally

Commitment of Traders Report Shows Heavy Selling in Corn Futures.

Commercial traders shed 23% of position ahead of WASDE report.


July 12, 2012

This trade setup is merely a random sample of the day’s trades generated by COT Signals. To track our work their and receive all of our nightly trading recommendations, click here.
 
 
There’s no question the corn crop will struggle to meet the market’s expectations. Early calls are for a national yield now aproaching 145 bushels per acre. Furthermore, much of the record acreage planted is in marginal land with little hope for good production in anything but perfect weather.
Despite the bullish fundamentals, commercial traders in the grain markets were clear in their intentions of getting forward delivereies sold ahead of the WASDE report. Their selling intensified in the last week of the rally. They sold 27,000 corn futures contracts as the market consolidated. Will this form an island top and gap lower leaving small specs and funds to bail out of their long positions? I would expect the market to fall far enough to close the gap left from July 3rd, at least.

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ANDREW WALDOCK
866-990-0777
This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation by Commodity & Derivative Adv. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

Tuesday, July 10, 2012

Sell Wheat Ahead of WASDE

Commitment of Traders Send Clear Sell Signal Ahead of WASDE

A futures trade for the truly adventurous.


July 10, 2012

This trade setup is merely a random sample of the day’s trades generated by COT Signals. To track our work their and receive all of our nightly trading recommendations, click here.

 
Wheat futures have benefitted greatly from the rallies in corn and soybeans. However, the wheat crop has not been subjected to the same weather conditions as the other two due to its non-coincidental growth cycle. Therefore, much of this has taken place as a symptathy rally.
This sympathy has been primarily fueled by small speculators buying grains. We can see that Commercial traders have sold off 62.5% of their position since the May highs, which coincides with the beginning of the seasonal weakness.
Gutsy traders may want to sell September wheat in front of tomorrow’s World Agriculture Supply & Demand Report. The sell signal based on our commercial trader modeling is quite clear. However, given the magnitude of the report I HIGHLY suggest placing a protective buy stop above yesterday’s high at $8.44 ¾.



   

Commitment of Traders Daily Signals


ANDREW WALDOCK
866-990-0777
This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation by Commodity & Derivative Adv. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

Monday, July 9, 2012

Commitment of Traders Confirms Natural Gas Reversal

Commercial Trader Selling Leads to Key Reversal

Commitment of Traders Report identifies commercial traders as main sellers on natural gas futures rally.

The natural gas market is awash in excess supply. The warm summer has helped to push current stock through the pipeline but the fundamental picture remains little changed. New technologies have simply led to a glut of natural gas on the market.
The expectations for the natural gas futures market can be clearly seen in the actions of the commercial traders. They were the ones building the base as it traded down to $2 and below and they are primary sellers now that the market has rebounded.
Building on their success in this market we will also employ the technical key reversal in our creation of a new short trade. We will place our protective buy stop above Friday’s high at 3.060. Nearest supprt is $2.500. I expect the market to trade closer to $2.000 or below.


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ANDREW WALDOCK
866-990-0777
This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation by Commodity & Derivative Adv. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.