Today’s Market Spotlight


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    06/08/17

  • Gold (August) 

    Gold is grinding slightly lower after failing to push through 1300 this week. We remain long term bullish but as we always say about Gold, when people are screaming for it after two to three strong days in a row and you can justify resistance, it is time to sell. Furthermore, we maintain that the Dollar is undervalued heading into next week’s Fed meeting and rate hike. Today is a big day with the ECB policy decision this morning at 6:45 am CT followed by Mario Draghi’s press conference at 7:30. Jobless Claims are due at 7:30. Today is also the UK election and the Comey testimony. If we do not see any surprises we expect Gold to be at first major support at a minimum, however, we would not be surprised to see it settle back in at major three star support at 1267.8-1268.3 heading into next Wednesday.

    Resistance – 1297.4-1300.3***, 1309.3**, 1317.7**, 1338.3***

    Pivot – 1289.1-1293.4

    Support – 1280.1-1284.5**, 1275.6**, 1267.8-1268.3***, 1249.4-1253***

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    06/08/17


  • Oliver Sloup breaks down the grain markets ahead of Fridays WASDE report (6.5.17)

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    06/07/17

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    Crude Oil (July)

    Crude Oil broke major three star support yesterday trading to a low of 47.73 but failed to settle below, finishing the session at 48.23. Yesterday’s API report showed a much larger draw at 8.67 mb vs 2.8 expected. However, the market only reacted marginally, relative to such a massive draw in inventories (the key as well is that Gasoline and Distillates did not vary far from expectations). Today’s official EIA report is expected to come in at -2.517 mb Crude, -.755 mb Distillates and -1.091 mb Gasoline. As we commonly say when API deviates so drastically, EIA does not have to draw below its own expectations to be bearish. The large API draw now sets a bar and a draw in the ballpark of 4-5 mb could easily still weigh on the market; in this case, those who would buy on a bullish report have already bought, the EIA report must be nearly as bullish to attract fresh buying. Of course, if Crude draws 4-5 mb we must see the products stay closely in line. The other key to the report is production which has picked up in the lower 48 states for 15 straight weeks while oil rigs have increased for 19 straight weeks. We must see a close below three star support at 48.02-48.18, we remain bearish and our first target is near $44. The bulls look to achieve a close back above 49.07-49.36 in order to neutralize this weakness. The continuous 50 day moving average remains below the 200 at 49.61-49.65 and is the next resistance level on a closing basis.

    Resistance – 49.07-49.36**, 49.61-49.65**, 50.10-50.28***, 52.00-52.20****

    Pivot – 48.48-48.51

    Support – 48.02-48.18***, 47.09**, 45.89-45.93**, 44.06-44.13***

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    06/01/17

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    Gold (August) 

    Gold has held a higher low than yesterday’s 1261.8, trading to 1262 overnight before pointing higher. The Dollar is under pressure this morning, Treasury prices have remained bid and Gold continues to trade in a constructive manner. The technicals are trying to give the full-on green light as the 50 day moving average crossed above the 200 at the end of last week. The Golden Cross compliments a near term bull flag - bullish wedge breakout. We have not been shy about our bullish long term thesis. However, in the near term risk must be managed and though we are in favor of being long (with protective puts) because of these technicals, the fundamental landscape will be bumpy. Pending Home Sales is due at 9:00 am CT, tomorrow we have ADP Payrolls and ISM Manufacturing and Friday brings Nonfarm Payroll. We do believe that the Dollar is exhausted to the downside as the June 14th Fed meeting comes into focus.

    Resistance – 1268.8-1273.4**, 1280.9**, 1297.4-1300.3***

    Support – 1255-1259.6**, 1249.4***, 1239**, 1217.8***

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    05/31/17


  • Oliver Sloup breaks down the grain markets ahead of the long weekend.

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    05/31/17

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    Crude Oil lost 4.8% yesterday and had a range of $3.45. Price action traded to a low of 48.21 last night before consolidating higher. This morning the market is edging back to unchanged after trading to 48.18 and failing to hold a new low. We remain long term bearish but this price action worries us, everyone got so bearish and sold, who is left to sell. We expect the market to squeeze shorts into the weekend. We will look to reposition next week. We will be watching the 49.58-49.65 level intraday and on a closing basis today, this is the continuous 50 and 200 day moving averages along with the .382 from the selloff. Above there is three star resistance at 50.10.

    Resistance – 49.58-49.65**, 50.10***, 50.55**, 51.11 52.00-52.20****

    Pivot – 48.95

    Support – 48.02-48.18***, 47.09**, 45.89-45.93**

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    05/26/17

  • https://www.bloomberg.com/news/videos/2017-05-16/why-extending-opec-cuts-could-be-bearish-for-oil-video

    Click the link above to watch iiTRADERs Bill Baruch breakdown the crude oil trade

    *Below is an excerpt from our Morning Call; if you would like a free trial please email or call: info@iiTRADER.com & 312-244-3781

    Crude Oil (June)

    Crude Oil continued to trickle lower late in yesterday’s session after API data showed a build of 882,000 barrels of Crude. After trading to a low of 48.03 early in the session, price action has recovered back towards the $49 mark this morning. The market finds itself in a newly found consolidation range ahead of the official EIA data and options expiration today. Expectations for EIA come in at -2.36 mb of Crude, -1.05 mb of Distillates and -.731 mb Gasoline. We expect to see downward pressure from this level if EIA confirms API’s read. In lieu of a bullish number, we expect price action to remain in check as there is massive open interest at the $50 strike for both the puts and calls. However, the call side has over 40k OI and this will work to keep price action from going above there. On the flip side there is 35k puts in the money at the moment and we would not be surprised to see the buyers of these puts slowly lose their funds ahead of expiration. The market has lifted this week on news that OPEC plans to extend cuts nine months. We ultimately find this to be bearish in the long term as they lock in cuts that will not be sufficient enough to offset gains seen by US Shale; as we do every week, we will be watching production data very closely.

    Resistance – 49.18-49.49***, 49.94**, 50.85**, 51.58**, 52.53-53.00***

    Support – 48.03-48.22**, 47.10**, 45.52**, 44.06***

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    05/17/17

  • https://www.bloomberg.com/news/videos/2017-05-10/iitrader-s-sloup-warns-of-oil-price-pressures-video

    Click the link above to watch iiTRADERs Oliver Sloup breakdown the crude oil trade

    *Below is an excerpt from our Morning Call; if you would like a free trial please email or call: info@iiTRADER.com & 312-244-3781

    05/10/17

  • Crude Oil (June)

    Crude Oil is up more than 1% this morning on a bullish API inventory report. The market has seemingly shrugged off comments on extending production cuts from OPEC nations. This signals the importance of today’s official EIA report and expectations come in at -1.786 mb of Crude, -1.013 mb of Distillates and -.538 mb of Gasoline. It is important to understand that Crude Oil is higher on the API read that showed -5.789 mb, a much much bigger draw than expected. However, according to API Gasoline built 3.169 mb which when combined with the Crude read largely puts it in line with the EIA expectations. Ultimately, the API read was for shock value and forced shorts to cover. If EIA shows a smaller draw on Crude than API and a less bullish read on Gasoline combined with Crude we believe the sellers are ready to step in strongly. Also critical is the production data; the US has added 300,000 bpd in the last two months and at that pace would have added 1.2 mbpd by August, the exact amount supposedly cut by OPEC. We would like to see production come online in the tune of roughly 30,000 bpd a week but anything over 15,000-20,000 should be sufficient to support our bearish stance in the near term. Major three star resistance is at 47.61-47.73 and the bulls must secure a close above here to negate near term bearish price action. OPEC’s monthly report is due tomorrow.

    Resistance – 47.01**, 47.61-47.73***, 49.08**, 50.18-50.59**, 51.57****

    Pivot – 46.22-46.43

    Support – 44.06***, 42.20*, 40.65****

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    05/10/17



  • 05/01/17

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    CORN (December)

    December corn futures  gapped higher on the Sunday night open, this on the back of excess  precipitation in key areas of the eastern corn belt and other areas.   Weather will continue to be monitored closely despite it being relatively  early in the seeding season.  Crop progress will be released after the  close today, but we are really looking forward to next weeks report where we  can get a better idea on the effects of this weekends weather.  Fridays  commitment of traders report showed managed money increased their position by  24,000 contracts, this puts their net short position at 196,000.  If  weather continues to cause problems, it is possible that we could see funds  buy to cover.  On the technical side of things, 390 ½ is the 50%  retracement from the June highs to the August lows; the bulls will want to  achieve a close above this level to encourage additional buying and possible  short covering towards 398-399 ¾ , this pocket represents a handful of  technical and is also just below they psychological $4.00 level (obviously).

    Resistance-390 ½***,  398-399 ¾****, 404-405 ¾**

    Support-383**, 373  ½-374****, 358 ½****

    SOYBEANS (November)

    Soybean futures are  trading higher at the early morning intermission with November futures up 7  ½.   As with corn, wet weather has put a premium into the market  and that looks as though it could persist through the first half of the week  with more precipitation expected.  Keep in mind if the forecasts do not  pan out, we could see the premium come out of the market.  Firdays  commitment of traders report showed managed money added nearly 7,000  contracts to their short position, bringing their net short to 38,300.   On the technical side of things, we are continuing to wait patiently for  better prices to put hedges/shorts back on.  973 is the first line in  the sand we are looking at, but if we fail to get any progress in that  direction we will likely lower that as the technical remain in the bears  favor.

    Resistance-973**, 979  ¾-981 ¾***, 989 ½-994 ¾****, 10010**

    Support-950 ¼-953¾***,  937 ¼-941 ½***, 915**, 897 ¾-901**

    WHEAT (July)

    Wheat futures are the early morning champion, with prices up 12 ¼ at the intermission.  This has the market right up against our technical resistance pocket from 446-446 ¾.  A close above this pocket could encourage funds to do some short covering, as they have a net short of 143,400 contracts per Fridays commitment of traders report.  Weather over the weekend is the driving factor for the firmer trade, with key areas in the Midwest getting up to a foot of snow.  This situation will continue to be monitored closely over the next few days as we will likely get a better understanding of the effects on the crop. 

    Resistance-446-446 ¾***, 453 ½-455 ½***, 472 ½**

    Support-432-434 ½***,415-418¾**, 406***, 397 ¾-399**

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    05/01/17


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    Gold (June)

    Gold finished yesterday’s electronic session on a positive note, grinding back above 1270 but failed to hold ground through the evening. The metal is again hugging the 200 day moving average that comes in today at 1265. The ECB left rates unchanged this morning and sees them at present or lower levels past the QE horizon though economic risks have diminished. ECB President Mario Draghi is set to deliver a speech and press conference at 7:30 am CT. The initial statement is slightly more dovish than expected though we expect Draghi to bring things back to more of a middle ground. We are prepared to see some volatility in Gold this morning, however, its ultimate trek on the day will be more dependent on Durable Goods and Jobless Claims also due at 7:30 and Pending Home Sales at 9:00.  Watch the 200 day moving average on a closing basis at 1264.5 and remember the 50 dma is trailing and comes in today at 1250.1. Gold must close out above 1300 on a weekly basis in order to clearly breakout above the trend line from the 2011 all-time highs and spark the Golden Cross; we remain intermediate and long term bullish.

    Resistance – 1274**, 1280.8**, 1290.7**, 1300-1302.1**, 1309.3**, 1317.7**

    Support – 1264.5***, 1259.4**, 1247-1250.1**, 1241.5**, 1232-1236***

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    04/27/17

  • Crude Oil (June)

    Crude Oil is hugging the $49 mark and as we stated yesterday, priming for a test to the recent June contract lows of 47.61. Gasoline is heavy and API reported a massive build of 4.4 mb; this is supposed to be a seasonally bullish time of year and Gasoline demand is supposed to lead the market higher. The bulls have beat the drum on not only hopes that OPEC will extend production cuts but have used Gasoline as the backbone of their near term thesis. Traders must watch Gasoline closely, the July contract currently sits just above 1.60 and recent swing lows come in at 1.5888 and a close below here could open the door to 1.50. API also reported a surprise build in Crude which has weighed on the market. However, as we always discuss, this does open the door for a less bearish report or even a bullish report to swing the market higher; we must be on the lookout for this. Production data will remain a priority of ours while Crude is expected to come in at -1.66, Distillates at -1.07 and Gasoline at -1.02.

    Resistance – 49.62**, 50.00-50.22***, 51.68-51.79***

    Pivot - 49.15

    Support – 47.61***, 45.00**

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    04/26/17

  • https://www.bloomberg.com/news/videos/2017-04-19/focusing-on-oil-production-amid-opec-jawboning-video

    Click the link above to watch our interview with Bloomberg discussing Crude Oil (4.19.17)

    This mornings EIA report showed crude inventories down by 1.03 million barrels, this was a smaller drawdown than expected; that coupled with a surprise build in gasoline and increased production has put pressure on prices in the mid-morning trade. We laid out the bear case in an interview with Bloomberg this morning siting both fundamental and technical reasons. On the fundamental side of things, production has been a point of focus for us. Baker Hughes releases rig count numbers every Friday at noon central and they have showed rigs increasing 13 of the last 13 weeks. The uptick in activity in the states has led to a trailing increase in demand with US production increasing 8 out of the last 8 weeks with the average increase being roughly 35,000 barrels per day, this has production at the highest levels in 20 months.

    OPEC has started some jawboning with regards to extending their production cuts but it is unlikely we will see any definitive agreement before their May 25th meeting in Vienna. Even if they do extend cuts, they will come back online at some point because the longer they are not pressing, the more market share they give up. Not only is future production going to weigh on the market, but lower demand will too. Last week we received an updated report from the IEA that showed demand growth estimates lowered with a footnote that those lowered expectations may be fairly optimistic.

    On the technical side of thing, the market has been trading in $10 range (give or take) for almost exactly a year. First technical support today comes in a pocket from 51.68-52.17, this represents the 50 and 200 day moving average as well as the 50% Fibonacci retracement from the November lows to the January highs. If we close below this pocket we could see long liquidation from the funds who have a sizeable net long position, this would likely lead to accelerated selling and press us back to the 47.58 lows we saw at the end of March.

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    04/19/17