This is a sample entry from Brian Cullen’s email newsletter, The Cullen Outlook, published on May 28, 2014.
Pre-Dawn Update
I hope everyone had a great Holiday weekend. I wanted to give the markets some time to trade a bit before sending out the first Pre-Dawn Update this week. We had a chance to watch the first price action of the week and following up with last Thursday’s update, let’s get this ball rolling…
Stocks and Bonds:
We had modest rallies in BOTH of these markets yesterday, I always find that interesting when they trade the same direction for a few days. (side note: roll your Bonds and Notes to front month September) I am not convinced that the Bonds should be rallying. The ES printed 1900.00 like we talked about on Thursday (currently 1910.50!), so at this point I will be waiting for the next shorting opportunity in either market (bonds, ES or mini-Dow).
In the Currencies:
I was stopped out of the Canadian Dollar position yesterday wishing I had put on the long Aussie Dollar to go with it as mentioned Thursday, but we move on. CHART WATCH! The Aussie Dollar remains a possible buy to me at 92.25 – 92.00 as it is mirroring the support seen in the last week of April (minus the spike lower on May 2nd). Risk would be the 91.50 level with an objective of 94.00 perhaps. I would like to also keep an eye on the Euro Currency back to the upside if it finds support here this week at 136.25 – 136.00 After the brakes were put on the British Pound rally last week, the 167.50 is the level I would be looking to see if we can get a bounce off old resistance at the beginning of March and support from late April/mid May (currently at 167.66).
In the Energies:
We have our short July mini-Crude Oil from 104.00, we will see how this plays out and manage accordingly. With the Natural Gas, much to my dismay, I continue to hesitate on it. Let’s see how it handles this 4.50 level and take it from there, my bias would be to get long on the next dip. CHART WATCH! The July RBOB has formed a nice double top here if we can get back to 3.00, this may be something I recommend getting involved in with a stop order in at 3.02
STOP ORDERS DO NOT NECESSARILY LIMIT YOUR LOSS TO THE STOP PRICE BECAUSE STOP ORDERS, IF THE PRICE IS HIT, BECOME MARKET ORDERS AND, DEPENDING ON MARKET CONDITIONS, THE ACTUAL FILL PRICE CAN BE DIFFERENT FROM THE STOP PRICE. IF A MARKET REACHED ITS DAILY PRICE FLUCTUATION LIMIT, A "LIMIT MOVE", IT MAY BE IMPOSSIBLE TO EXECUTE A STOP LOSS ORDER.
In the Metals:
(side note: roll your Golds to front month August) In the Gold market we have been patiently waiting and we have talked about the recent coil that has been forming. We mentioned buying if we broke above 1310.0 OR selling if we broke below 1280.0 With yesterday’s close below 1280.0, I don’t see support coming until 1240.0 (currently at 12.65). Lets see how the pit open plays out and see if there is an opportunity. Silver is sitting near 19.00 support this morning at 19.15
In the Grains:
We saw a bearish Crop Progress report yesterday afternoon, particularly in the Soybeans, BUT this morning we are up 12 cents at 15.00 in July, interesting! I wouldn’t mind looking to get short here before too long. The 15.20 level has been rejected 3x since mid-April. Look for a trade idea to come out this morning with our stop just above that spike high on 4/22 of 1540.0 We have our short Soymeal position on from 499.0, we will see how this plays out and manage accordingly (our stop is at 5.05). In the Soybean Oil market, we have seen recent support here at 40.00 (currently at 40.27, we had an overnight low sub-40.00 of 39.92). I still like getting long the Kansas City Wheat contract around 7.30-ish. The Corn and Wheat markets have seen pretty big moves to the downside and I have to wonder where support comes in for both of these contracts and more importantly, WHEN. We will be patient with them which is why I like turning my attention to other markets in the complex.
In the Softs:
We will continue to manage our 2 short Sugar positions, the stop is at 17.15 which is where it will stay unless we break 17.00 at some point. July Cocoa is once again above 30.20, a level it has struggled with since the beginning of March. We have watched and traded this level a few times recently and I feel like today should be no different. Keep a look for an idea early this morning. Cotton has been in an absolute free fall since the trendline break at 92.00 on May 12th. I will be looking for the first sign of a bounce and I would like to be on board on any reversals back to the upside. On May 21st, we had a headfake bounce so our stop will be pretty close if/when we take a shot at it!
In the Livestocks:
Nothing for now.
Nice thing about markets closed on Mondays…is its Wednesday before you know it! Call the desk or email your broker if you would like to get involved in anything today.
Let’s do this!
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STOP ORDERS DO NOT NECESSARILY LIMIT YOUR LOSS TO THE STOP PRICE BECAUSE STOP ORDERS, IF THE PRICE IS HIT, BECOME MARKET ORDERS AND, DEPENDING ON MARKET CONDITIONS, THE ACTUAL FILL PRICE CAN BE DIFFERENT FROM THE STOP PRICE. IF A MARKET REACHED ITS DAILY PRICE FLUCTUATION LIMIT, A "LIMIT MOVE", IT MAY BE IMPOSSIBLE TO EXECUTE A STOP LOSS ORDER.
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