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.

 

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.

 

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.

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 3^rd, 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.

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.

Covering Coffee Futures Short Positions

Commercial Traders Holding Long Coffee Positions

Small Speculators and Funds Covering Short Positions

The coffee market has been one of the weakest markets of 2012 with prices declining more than 25%. Commercial traders were heavy buyers on the market’s decline to the 180-190 area where the market consolidated for months until May’s decline hit all market sectors.
Commercial traders have held fast to their position with very little net change since the middle of March. It appears that they may be getting the bounce they’ve been waiting for.
I expect this is primarily a large speculator and fund driven short covering rally given the magnitude and the timing as the July contract expires. Never the less, it’s perfectly conceivable that we trade back to the bottom side of the resistance between 170-180. Our protective sell stops will be placed at the swing low of 150.10
Trading Signal provided by COT Signals.
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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.

Cocoa Futures Headed Lower

Commercial Traders Selling with Seasonal Tendency

Commitment of Traders Report aligns bearish seasonal pattern with commercial selling.

The cocoa market is exhibiting classic commercial trader behavior. Commercials were buyers in April near the $2050 per ton lows and now that the market has come back to test the $2275-$2350 area, commercial traders have turned sellers. Last week’s Commitment of Traders Report shows that commercial traders sold nearly 5,000 contracts, 12.5% of their total position.

They clearly expect the resistance to hold and the market to exhibit its typical seasonal price decline from July, 1st – expiration of the September contract. We will be selling September Cocoa and placing our protective buy stop above the recent swing high of $2271.

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.

Lean Hog Futures Reversal Keyed by Commercial Selling

Futures Trading with the Commitment of Traders Report

Commitment of traders report shows heavy lean hog futures selling.

July lean hogs have rallied more than 13% since the May lows. This has also been a textbook seasonal trade with July hogs rallying into early June and should sell off through the middle of July into expiration. The commercial traders have had their way this market, buying the May lows and now, selling the June highs.
Yesterday’s action was indicative of a technical top as the market posted a new high for the run yet, closed below the previous day’s low.
We’ll tie that into strong commercial selling as the Commitment of Traders report shows that they have shed more than 25,000 contracts in the last three weeks. We are selling July lean hogs and placing a protective buy stop above yesterday’s high at 94.00.

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