We began our week putting traders on notice that the silver futures market appears to be nearing an end or, at least commercial traders feel that buying silver in the futures markets is becoming more economical than mining for their necessary supplies.
You can see the surge in commercial buying along with the technical analysis that shows where the bottom is expected in the piece we wrote for TraderPlanet, “Silver Decline Nearing an End.”
Tuesday and Thursday we focused on a fairly rare occurrence in the S&P 500 futures’ expiration. There was a dramatic amount of commercial trader selling into the S&P 500 futures’ expiration. We plotted the Commitment of Traders which report showed that commercial traders sold more than 25,000 contracts in the two weeks leading to the September contract’s expiration. We used this as an arbitrary bar to back test and found this happens less than 15% of the time and has a consistent, repeatable effect on the S&P 500 futures.
Continue reading Weekly Commodity Strategy Review 10/03/2014
Monday once again started our week off with a bang in our feature for TraderPlanet. We looked at the technical, fundamental and geopolitical support the 10-yr Treasury Notes were nearing and indicated that a buying opportunity was upon us in, “Commercial Traders Support the 10yr Treasury Note.”
Continue reading Weekly Commodity Strategy Review 09/26/2014
Our week started off with a bang. Monday, we discussed how we use the small speculator category of the weekly Commitment of Traders report to pick off failing moves in the markets. The rally in cotton futures set us up beautifully for the sell signal we published at TraderPlanet and we’ve got more than $1,500 per contract in the trade already.
COT Data: What can You Learn from Small Speculators
We spent the rest of the week focused on Thursday’s Scottish vote. There’s a very interesting angle playing out among the commercial traders in the currency markets. The Commitment of Traders Report clearly shows that commercial traders are expecting these currency markets to tighten rather than continuing to widen as they have for the last 5-6 weeks.
Our piece on Tuesday for Equities.com touched on the basics in, “Currency Trading the Scottish Secession Vote.”
Finally, our primary piece delved deeper into the same currency analysis, “Currency Reversal on Scottish Vote.” The primary factors for our currency expectations are still in play and we continue to look for the technical pattern that we outlined yesterday.
This shortened holiday week began with our piece for Equities.com on the coffee futures market and the peculiarities of Coffee Futures Expiration Analysis. We discussed the roll from the July to December contract and the effect we thought it would have on the market as it made new highs for the move.
Our primary piece this week focused on the Live Cattle futures market and the spread between the expiring October and newly liquid December contracts. We noted the difference in the change in open interest and depth of decline between the two contract months and predicted, “One More All-Time High Coming in Cattle.” We also noted the similarities in the technical setup between the current live cattle situation and the False Breakout in Gold and Silver that we wrote about in July. The more often we see the same patterns reflect the same outcomes the easier they are to recognize going forward.
Lastly, the European Central Bank cut their interest rates and moved the overnight rate to negative. This is the same type of Quantitative Easing that our Federal Reserve has used over the last few years to pump money into a deflating economy. This move caught many traders off guard, but we wrote about it last week in, “Hand Quantitative Easing to Germany” as well as discussing how the US can use this our advantage.
Have a wonderful weekend and we’ll be back bright and early Monday morning with a new piece for TraderPlanet.
Sincerely, Andy Waldock.