Today’s Market Spotlight

  • 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

  • If you would like a free trial of our morning GRAINcast, please email or call: OliverSloup@iiTRADER.com or 312-244-3781

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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

  • photo from Tumblr

    Gold (June) Click image to enlarge

    Gold gapped higher on the open last night and extended to a high of 1297.4 early before paring gains. This is the test to the psychological 1300 level that we have been calling for. Now, everyone is talking about the metal and how it’s breaking out; ultimately, this is not when to buy. Price action took out the 200 day moving average last week (at 1268 today) while the 50 Dma is trailing at 1243.1. Furthermore, the higher low this December when compared to the last is extremely significant in the longer scheme of things. It becomes even more significant if Gold can get out above trend line resistance it currently faces; not only from last year’s high but from the all-time high in 2011. This trend line, as we discussed last week, comes in at about 1290 so yes it was nudged but we need to see a close above 1300 on a weekly basis to clearly break through. With that, the Golden Cross follows. Pullbacks to 1268-1273.3 remain a strong buying opportunity. Retail Sales and CPI missed widely on Friday and the Atlanta Fed dropped their estimated Q1 GDP to .5%. We have TIC data at 1:00 pm CT today and housing and Industrial Production data tomorrow.

    Resistance – 1300-1302.1**, 1309.3**, 1317.7**

    Pivot - 1290.7

    Support – 1280.8**, 1268-1273.3****, 1253.9-1254.7*, 1248.2**, 1241.5-1244.5***

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    04/17/17


  • SOYBEANS

    Soybeans had a strong rally following this weeks bearish USDA report, which we pointed out as a very bullish catalyst in a special update to you earlier in the week (Soybean Update). As mentioned, we called to talk with clients about what they were comfortable with on an individual basis with regards to reducing hedges/re-owning bushels. Towards the end of this afternoon, we were in contact again with clients wanting to see if they wanted to sit tight through the long weekend, or take advantage of the cheaper protection they sold at a better price earlier in the week; again, the market is not one size fits all so we had a lot of different clients going about this differently.  

    I personally feel that there is more room in this bounce, but for now that’s just what it is, a “dead cat bounce”. The fundamentals are marginal at best, if weather starts to dry out the premium will likely evaporate from the market. On the technical side of things, there are several barriers the bulls need to close above to encourage momentum buyers to get on board. 967, 973, and 980 are the exact levels we are watching for in the November futures. It is at these points we would really push clients to put hedges back on.

    We would love the opportunity to work with you and earn your business, we are very confident we can bring a lot of value to what you are wanting to do in the markets. If you are someone who likes to do things on their own, we can provide you a great desktop/mobile platform along with a great rate. If you have any questions, please do not hesitate to contact me. Have a great Easter weekend.

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    04/13/17

  • SOYBEANS

    Soybean futures traded lower following yesterdays bearish USDA/WASDE report which brought wheat and corn down too, despite being more neutral. The USDA showed US carryout at .445 billion bushels, this was within the range of estimates from analysts. The world carryover estimate came in at 87.41 million tonnes, this was well above the average estimate of 83.91 and above the top end of estimates at 85.75. The fact that the market stopped going lower on bearish news is a bullish indicator in our mind. That coupled with technical support and a long weekend with weather concerns looming in Argentina prompted us to contact clients with recommendations of reducing hedges for some producers (each client is different, the market is not a one size fits all), and initiating long positions for speculative clients. We feel there is good opportunity here for producers to try to capitalize from, if you would like to discuss more in depth strategies or have any questions, please do not hesitate to call or email me.

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    04/12/17

  • If you missed our interview on Bloomberg discussing the Gold trade, you can watch it here: Can gold make a run to $1,300?

    Gold (June) 

    Gold is elevating back above 1260 this morning and the metal has been extremely constructive since the rate hike only three weeks ago. With even the slightest bit of weakness in the equity market, investors quickly turned to safe haven assets such as Gold and Treasuries. However, US data has been solid and some even consider it great. Then you might ask why is Gold rising? First, we again want to hammer home the fact that we do not expect the Dollar to rise during a rate hike cycle, in fact, the Fed is in many ways slowing growth. Secondly, the French elections are at the end of the month and there is a large degree of uncertainty and to that, risk must be managed. This leads to lastly, equity markets are beginning to show a slight bit of vulnerability and there are many reasons for this, such as the French election, official Brexit and the Trump trade coming back down to reality. Ultimately, we like Gold and we always have. First resistance comes in at 1264.2-1264.9 and our rare major four star resistance comes in at 1268.1-1270; a close out above here is needed to spark the next bullish leg higher that should test 1300. Still, buyers must manage risk and you must not forget there is a lot going on this week. Tomorrow we have ISM Non-Manufacturing data and FOMC Minutes. New session lows will soften the tape while a move back below support at 1238.9-1241.5 will signal a failure.

    Resistance – 1264.2-1264.9**, 1268.1-1270****, 1280.8**, 1300**

    Support – 1255.5-1256.6**, 1246.4*, 1238.9-1241.5**, 1229.9-1231.7**, 1223.2**, 1211.7-1213.5***

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    04/04/17

  • If you missed our interview on CNBC discussing the crude oil trade, you can watch it here: Is it time to sell the rally in crude?

    Crude Oil is down marginally this morning after settling near its high yesterday of 50.47 at 50.35. Price action dipped to a low of 49.90 overnight but has edged back near unchanged. We remain bearish Crude Oil and view this as a relief rally. There was a perfect storm of news that helped lift the market from major three star support at 47.60-47.70, not to mention a failure to close below here; product demand, Libya outages, OPEC jawboning (Kuwait yesterday), etc. No trade is easy and for those of you that have stayed short looking for the ultimate breakdown to $40/41 this can be a tough bounce. It does highlight the importance of locking something in. We still believe the bigger picture to be bearish and our rare major four star resistance comes in at 51.00-51.33. This is the big .382 retracement and as long as the close remains below a .382 the trend can stay intact. Furthermore, this is also the 200 day moving average. Though we do not believe in trading ETFs we do watch them as an indicator. The XLE (Energy Sector) hit its 200 day moving average yesterday and traded to the top end of a four month long channel. For both the tradeable WTI Crude and the XLE the 50 day moving averages sit just above the 200 day; if price action begins to fail here we expect to see the Death Cross as the 50 slices through the 200.

    Resistance – 50.22-50.35**, 51.00-51.33****, 52.50-52.78**

    Support – 49.63**, 49.18*, 48.78**, 48.83**, 47.60-47.71***, 47.09*, 45.78**

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    03/31/17

  • If you missed our interview on CNBC yesterday talking natural gas, you can watch it here: What’s next for natural gas?

    Natural Gas (May)

    May natural gas futures were mixed for the most part during yesterdays session, that after the EIA showed a drawdown of 43 billion cubic feet.  The drawdown was within the range of analyst expectations, but well above the five year average of -27; in fact it was the largest drawdown for this time since 2014.  Total storage is at 2.049 trillion cubic feet, still above the five year trend but 17.1% below levels seen for the same time last year.  On the technical side of things, the market is pressing up against trend line resistance that comes in from the December highs.  If the market can achieve a close above resistance, we could see another push higher.  On the flip side, a failure to break out will likely lead to consolidation towards 3.09.

    Resistance-3.253***, 3.308-3.311**, 3.507**

    Support –3.09**, 2.995-3.001**, 2.891-2.908***, 2.815-2.82**

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    03/31/17


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    03/29/17