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.