This is a sample entry from Brian Cullen’s email newsletter, The Cullen Outlook, published on May 30, 2014.
We have some new readers this morning who are currently Cullen Outlook subscribers but may have not been getting these Pre-Dawn Updates previously.
To those, I say Welcome! (reply to this email if you have any questions on this content)
***This Update will be longer than normal because since we are exiting May today, I wanted to paint a picture for ALL the markets that I will be focusing in on as we head into June next week and I wanted to give you as BIG a preview as I could muster***. It is Friday (TGIF!) and we have some positions on that we will be managing ahead of the weekend and some new positions that may be of interest to you as well. So lets get right to it!
In the Indices and Financials:
The S&P has been on an absolute tear since we broke out above congestion and old resistance at 1884.00 (currently at 1915.50) I was looking to short the stock market if we could penetrate 1900.00 level in the S&P and I had the choice between the mini-SP and the mini-Dow. So we dove in and shorted the mini-Dow yesterday at 16675 based on the double top with May 12-14 (currently at 16670). We will manage this position accordingly throughout the day. If we do get the break I am looking for below 16600, we may add another position and tighten the stop before the close. It is a Friday and it is the last day of the month, so we watch for some portfolio maintenance to be done by traders as they clean up before month’s end.
In the Bond market we saw a bit of a retracement yesterday, rejecting the 138’00 level . In Tuesday’s update I mentioned not being convinced that the Bonds at 136’19 should be rallying, boy was I wrong, the high was 138’10! Look for support to come in at around 137’00 (currently at 137’09).
In the Currencies:
Under the file of “you cant trade them all”…I hesitated to send out a trade idea to get long the Aussie Dollar that I have mentioned in our last 2 updates at 92.25 – 92.00 and yesterday was painful to watch as we rallied to near 93.00 (currently at 93.05). I know some of you did get long that market so kudos to you on a great trade so far! That level will look equally attractive if we can get back there but turning our attention to the upside, 93.75 – 94.00 looks like there may be a good opportunity to get short if we hit resistance.
CHART WATCH! The British Pound at 167.25 (currently at 167.30) has my attention based on old support from April 15th and May 15th and resistance from mid-February to early March. On Tuesday, I mentioned the same 167.50 level, so maybe the time is right? It has broken 200 points off the 169.00 level just 7 days ago, with yesterday being the first positive day in that time and this morning we see some additional follow through to the upside. On Wednesday we broke the up trendline from Feb 5th (I wasnt even paying attention to that trendline!!)
We were officially ALL filled on our long mini-Euro Currency entry in the overnight, (some were filled late yesterday afternoon). I would like to move this stop order as soon as we can to remove some risk off the table heading into the weekend. So if you we can get above 136.50, look for that email to come out.
Side notes: The Canadian Dollar will be at recent resistance at 92.40 (currently at 92.30), there is a pretty steep trendline here, so lets see if it gets turned back lower and the Japanese Yen (currently at 98.39) may soon be facing the 98.70 level that it has struggled with since February.
In the Energies:
We had a quick trade in the mini-Crude Oil market where we captured modest gains ahead of the Energy Report yesterday. I would like to look at this market again if we can get back above the 104.00 level (currently at 103.17) but this will be something I may wait until early next week on. CHART WATCH! Technically it has formed a nice little hook off the 104.30 level and there looks to be some decent downside potential. Lets see how it goes….but if you see what I see and you want to get involved, let’s do it!
The Natural Gas market is in no man’s land between 4.30 and 4.80 (currently at 4.57). Lets see if it breaks one way or the other and look to get involved on that move perhaps.
In Tuesday’s update, I said to watch the RBOB contract if we got back up to 3.0000, we would be forming a double top against the highs in the last week of April…guess what?, we are here!!! (currently at 2.9946)
In the Metals:
The Silver market is once again at this massive support level of 19.00 (currently at 18.98) By using the mini contract (which is 1/5 the size of the regular contract), you may find it more comforting to use this leverage and enter here. I dont mind getting aggressive with the smaller size contract, but every trader had their own unique risk parameters. 18.60 in my opinion is plenty of room for your stop loss. If we break above 19.20, I would consider adding an additional mini contract at that point.
The Gold market has me intrigued here at 1253.50 this morning. After breaking below the coil of 12.85, we are currently sitting on old congestion from the second half of January. This 1260.0 level is where we break out to the upside in an impressive 6 week rally topping out at 1390.00 Interesting…
In the Grains:
The July Soybeans were back above 15.00 yesterday and in the overnight. (currently at 14.98) The last 3 times we have touched 15.20 however, it has been rejected. I would like to establish a short position in this market somewhere 15.00 – 15.20, lets see how the morning price action goes. I think risking near the 15.30 level is plenty (the intra-day spike to 15.36 3/4 has my attention though). We have not seen any bearish price action enter the market as one would have though after Tuesday’s Crop Progress Report. It has a nice trendline going and support at 14.60
CHART WATCH! The July Corn has consolidated over the past 4 days at this 4.68 – 4.74 level. It has fallen 48 cents since May 9th!! It has found some support at 4.68 off of old resistance back in late February. I am considering getting long this market before the weekend, stay tuned! For those believe the old wives tale that “The Oats Knows!!” (meaning that the oat market is a pre-cursor of what to expect in the Corn market), chew on this….the Oats market has rallied 30 cents in the past 3 days while the corn market has been stuck in this shallow 6 cent range. Speaking of the Oats, I do not trade them normally, but if YOU do, watch the 3.70 level (currently at 3.68 3/4). If we break above 3.70, we could be off to the races….next stop 3.95?
We have our long Kansas City Wheat position on from 7.30 with the stop at 7.15 …and we also have on our short Soymeal from 499.0 with a stop at 505.0 We will manage this trade throughout the day accordingly. Regarding the Soymeal position, we bounced off of 492.0 twice in the last 2 days. If we get there today and seem to struggle with it again, look for an exit email to get flat heading into the weeknd and moving on.
In the Softs:
After exiting our Sugar short position earlier in the week, it has spiked higher and I would like to see where it goes from here and perhaps we can get involved again?
The Cotton market had only its 3rd positive day since May 9th yesterday but it proved to be a BIG bounce. This may be the revesal sign that I talked about looking for in Tuesday’s update. There is truly no good spot for a stop if we entered here (currently at 86.51) besides under Tuesday’s low of 83.50 and that is a bit too much risk for me. SO, if we choose to get involved here at these levels, the stop may not make sense form a chart technical standpoint…it will basically be more monetary based than anything. Remember the golden rules: Never over-trade, trade at your own comfort level and NEVER risk more than you are willing to lose!!
We were stopped out of our short Cocoa position on from 30.25 at 30.75 in the overnight. We gapped open at 30.61 and are above any recent resistance. This will be something to watch!
In the Livestock:
The Live Cattle and Feeder Cattle markets BOTH have me completely confused with very volatile trading. Just look at the price rfanges below:
For example: August Feeders have traded from 193.45 to 197.25 to 192.80 back to 197.25 in the past 8 trading days!
For example: October Live Cattle have traded from 142.30 to 144.70 to 140.55 back to 143.40 in the past 8 trading days!
The Lean Hog market is no clearer to me. I will be on the sidelines for now if you are looking for me!
I hope everyone had a great month of May. We had a lot of fun in the markets, thank you for following along…now bring on JUNE!!!
LET’S DO THIS!!!
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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