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Below are my comments on my open positions for the week.
ZN – 10 Year Note
Trade 1: Short 2 contracts of March 10 Year Notes
Entry Price: 124 4.5/32
Stop: 127 22.5/32 risking $0
Target: 122 14/32
Trade 2: Short 1 contract of March 10 Year Notes
Entry Price: 124 18/32
Stop: 125 11/32 risking $781
Target: 120 22/32
Weekly Comment: The Notes rallied on Tuesday on safe haven demand closing above the 50 SMA for the first time since the downtrend began. The price action wasn’t completely convincing and I held off on closing part of my position waiting for confirmation the next day. Prices fell sharply on Wednesday after a hawkish speech from Yellen and continued lower to finish the week. If prices can break the 61.8% retracement level of the recent corrective move at 123’19 I may look to add to the position.
GF – Feeder Cattle
Trade: Long 1 contract of March Feeder Cattle
Entry Price: $1.2470
Stop: $1.247 risking $0
Target: $1.5170
Weekly Comment: Feeder Cattle started the week on a positive note after the negative price action on Friday and continued to grind higher for the rest of the week posting a new weekly high close for the move.
HG – Copper
Trade: Long 1 contract of March Copper
Entry Price: $1.6380
Stop: $1.5980 risking $1,000
Target: Short term $2.95, Long term $3.70
Reasons for entering the trade:
Technical: Prices surpassed the 61.8% retracement of the first corrective range since the break of the 200 SMA.
Fundamental: Expected fiscal stimulus on infrastructure as well as increasing global growth has been driving Copper higher.
Weekly Comment: Copper traded back towards the 61.8% retracement level on Monday before bouncing to finish the day higher. Prices re-tested the 61.8% retracement level on Tuesday trading down through this level and triggering my order. Prices held below this level for the rest of the week trading below my stop level on both Thursday and Friday during the overnight sessions but did not trade at these levels during the day session to trigger the stop.
Below are my comments on other opportunities I am watching.
ZW – Wheat (New Crop)
Wheat rallied strongly on Tuesday consolidating the break above the 61.8% retracement of the recent range before falling back towards this level for the rest of the week.
ZC – Corn (New Crop)
Corn surpassed the 200 SMA on Tuesday and continued higher later in the week consolidating the break above this level.
PA – Palladium
Palladium re-tested the major 61.8% retracement level again this week before rallying strongly on Friday to close at new highs for the move.
Crude Oil traded lower again early in the week but rallied on Friday to finish the week only slightly lower.
GC – Gold
Gold rallied strongly on Tuesday on safe haven demand closing above the psychological $1,200 level. Prices pulled back from the highs later in the week but closed the week above this level.
DX – US Dollar Index
The US Dollar fell sharply on Tuesday after comments from Trump that the Dollar was too strong closing below the 50 SMA before rallying later in the week to finish the week only slightly lower.
ES – S&P 500
The S&P 500 continued to trade within the range between the 161.8% extension level and the 20 SMA this week.
Below are my comments on my open positions for the week.
ZN – 10 Year Note
Trade 1: Short 2 contracts of March 10 Year Notes
Entry Price: 124 4.5/32
Stop: 127 22.5/32 risking $0
Target: 122 14/32
Trade 2: Short 1 contract of March 10 Year Notes
Entry Price: 124 18/32
Stop: 124 18/32 risking $0
Target: 120 22/32
Weekly Comment: The Notes rallied on Monday closing above the 50 SMA for the 2nd time. I waited an extra day before lightening my position to see whether there was any follow through buying. Prices closed back below the 50 SMA on Tuesday and continued lower trading down to test the 61.8% retracement of the corrective range. Prices bounced from this level on Thursday and continued higher Friday to finish the week only slightly lower. I will move my stop on the second trade to break even from Monday as I am not willing to let the trade go against me now that it has moved in my direction and the 50 SMA is now well below my entry level.
GF – Feeder Cattle
Trade: Long 1 contract of March Feeder Cattle
Entry Price: $1.2470
Stop: $1.247 risking $0
Target: $1.5170
Weekly Comment: Feeder Cattle couldn’t follow through after last week’s new highs falling on Monday and continuing lower for the rest of the week until finding support on Friday at the 40 SMA.
HG – Copper
Trade: Long 1 contract of March Copper
Entry Price: $1.6380
Stop: $1.5980 risking $1,000
Target: Short term $2.95, Long term $3.70
Weekly Comment: Copper closed just above the 61.8% retracement level on Monday and then rallied strongly on Tuesday posting a new high close for the uptrend. Prices finished the week off the highs but remain above the 61.8% retracement level.
ZW – Wheat
Trade: Long 1 contract of July Wheat
Entry Price: $4.51
Stop: $4.445 risking $325
Target: $4.79
Reasons for entering the trade:
Technical: Prices re-tested the break of the 61.8% retracement of the recent range and have intersected with the 20 SMA for the first time since it crossed up through the 40 SMA.
Fundamental: World wheat supplies are plentiful at this stage but US plantings of winter wheat are the lowest since 1909.
Weekly Comment: Wheat was lower this week trading back down to re-test the 61.8% retracement level. I bought half my position on Friday when prices intersected with the 20 SMA on the basis that it would provide support. Prices closed slightly below both the 20 SMA and 61.8% retracement level to finish the week and if there is another close below these levels on Monday I will exit the position. If prices bounce from here I will look to add another contract to the position.
Below are my comments on other opportunities I am watching.
CT – Cotton
Cotton rallied strongly on Monday closing back above the 61.8% retracement level but quickly failed this level again falling sharply on Tuesday. Prices made another attempt to trade above the 61.8% retracement level on Thursday and moved higher again on Friday to finish the week above the 61.8% retracement level. I am looking for a close above 75 before looking at a position.
ZC – Corn (New Crop)
Corn was unable to follow through this week falling sharply on Tuesday and trading back down to the 200 SMA to finish the week. I would prefer to see prices surpass the 61.8% retracement level at 3.98 before thinking about a position.
PA – Palladium
Palladium posted a new high close for the move on Tuesday before falling away sharply on Wednesday to close back below the major 61.8% retracement level. Prices rallied on Friday to close back at this level.
Crude Oil continued to trade within the same range this week with no clear trend present at this stage.
GC – Gold
Gold fell from the recent highs this week trading back down to close at the 61.8% retracement of the recent uptrend.
DX – US Dollar Index
The US Dollar continued lower this week posting new lows each day of the week before bouncing on Thursday and Friday to finish the week only slightly lower.
ES – S&P 500
The S&P 500 broke out of the recent range on Wednesday surpassing the 161.8% extension level. If the break is credible the next target may be 2,433.
Below is my updated tracking sheet for January with the key metrics I am currently following.
A very quiet month of trading in January with only 4 trades. I finished the month with a small unrealised gain of 3.72% after peaking at 20% during the month. A number of trades which were profitable during the month such as Feeder Cattle and the 10 Year Notes quickly turned against me in the last few days of the month wiping out most of the unrealised gains generated earlier in the month. The false breaks in these markets may be the first warning signs that markets are beginning to move back into range bound trading with fewer decent trends available. I will continue to monitor for any further signs that this is the case and alter my trade tactics accordingly if necessary.
- Exited my long position in Feeder Cattle
- Exited my long position in Wheat
- Partially exited my Short position in the 10 Year Notes
- Re-entered a long position in Wheat
Below are my comments on my open positions for the week.
ZN – 10 Year Note
Trade 1: Short 2 contracts of March 10 Year Notes
Entry Price: 124 4.5/32
Stop: 127 22.5/32 risking $0
Target: 122 14/32
Trade 2: Short 1 contract of March 10 Year Notes
Entry Price: 124 18/32
Exit Price: 124 18/32
Trade Comment: I exited the trade on Monday intra-day when prices hit my break-even level. I could have waited to exit on close and the exit would not have been triggered but with prices continuing to attempt to surpass the 50 SMA and the average beginning to flatten I felt it was prudent to reduce the size of this position as I the chances of the Notes continuing to rise have increased.
Weekly Comment: The Notes rallied on Monday closing back above the 50 SMA again. The Notes fell back below the 50 SMA during the day on Tuesday before rallying to close back above the level posting a candle with a long lower shadow. Prices stayed above the 50 SMA for the remainder of the week but each subsequent attempt to rally was unsuccessful with a couple of candles in a row with upper shadows posted.
GF – Feeder Cattle
Trade: Long 1 contract of March Feeder Cattle
Entry Price: $1.2470
Stop: $1.2465
Weekly Comment: Feeder Cattle gapped lower on the open on Monday after a bearish Cattle on Feed report released on Friday triggering my break even stop. Prices continued down through the 200 SMA on Tuesday and Wednesday before bouncing on Thursday to regain the ground above the 200 SMA. Feeder Cattle finished the week just above the 200 SMA but has not yet re-completed a break of this level.
HG – Copper
Trade: Long 1 contract of March Copper
Entry Price: $1.6380
Stop: $1.5980 risking $1,000
Target: Short term $2.95, Long term $3.70
Weekly Comment: Copper was lower on Monday re-testing the 61.8% retracement but held this level. Prices rose sharply on Tuesday on stronger than expected manufacturing data posting another new high close for the move. Copper drifted lower through the middle of the week before collapsing on Friday posting a bearish full bodied candle to finish the week. I’m willing to stick with the trade while prices remain above the 50 SMA.
ZW – Wheat
Trade: Long 1 contract of July Wheat
Entry Price: $4.51
Exit Price: $4.445
Trade Comment: I exited on Monday when prices gapped lower and finished the day with a bearish full bodied candle. A had a few issues with the exit hitting buy instead of sell not once but twice but managed to exit at the price I wanted to and exit the mistaken trades at break-even. In hindsight I could have given the trade more room with the 40 SMA so close but I wasn’t that confident with the quality of the setup to begin with and was happy to exit the trade at the time.
Trade 2: Long 1 contract of July Wheat
Entry Price: $4.5525
Stop: $4.4275 risking $625
Target: $4.79
Reasons for entering the trade:
Technical: Prices surpassed the 61.8% retracement level again with impulsiveness on Wednesday so I entered an order back at the 20 SMA and was filled on the close on Friday.
Fundamental: World wheat supplies are plentiful at this stage but US plantings of winter wheat are the lowest since 1909.
Weekly Comment: Wheat gapped lower on Monday trading down to the 40 SMA. Prices bounced from this level on Tuesday and surged higher through the 61.8% retracement level again on Wednesday after reported tension between Russia and the Ukraine. Prices pulled back to the 20 SMA on Friday but closed the week above the 61.8% retracement level.
Below are my comments on other opportunities I am watching.
CT – Cotton
Cotton surged higher on Wednesday breaking out of the recent range. The closing price was outside of my risk tolerance levels and I was unable to enter a long position. Prices continued higher on Thursday without giving me a chance to enter. I will continue to monitor for any weakness for a potential buying opportunity.
ZC – Corn (New Crop)
Corn traded down through the 200 SMA on Monday but surged back above this level on Wednesday on stronger than expected ethanol production. Prices were unable to continue higher on Thursday and Friday and I will continue to wait for prices to surpass the 61.8% retracement level before thinking about entering a position.
SB – Sugar
Sugar bounced from the 200 SMA on Monday and surged higher on Friday trading back up towards the 61.8% retracement level. If prices can surpass this level I may look at entering a long position.
HE – Lean Hogs
Hogs traded back up to the 61.8% retracement level of the recent range during the week and were able to close slightly above the level on Friday. If prices can break this level with impulsiveness I may look at entering a long position.
Crude Oil bounced from the 50 SMA during the week but continue to trade within the same range. The path of least resistance is still up but there is no clear trend at this stage.
GC – Gold
Gold bounced higher this week trading up towards the 100 SMA which may provide resistance.
DX – US Dollar Index
The US Dollar fell sharply on Tuesday trading down to the 100 SMA. Prices held this moving average for the remainder of the week but if this level cannot hold the US Dollar may fall back to the 200 SMA.
ES – S&P 500
The S&P 500 fell back below the 161.8% extension level on Monday but held between this level and the 40 SMA before rallying strongly on Friday to regain the ground above the 161.8% extension level. The trend still appears to be up at this stage and the target could be the 261.8% extension level at 2,433.
