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Home / Futures Blog / The Rath Overlay (June 05 2015)

The Rath Overlay (June 05 2015)

June 8, 2015 by Drew Rathgeber

This is a sample entry from Drew Rathgeber’s newsletter, The Rath Overlay, published on Friday, June 5, 2015.


This morning we have gold trading at $1,174.80 (Q5) per troy oz. holding below key support at $1,200, also another key bearish area I’ve noticed is $1,176 and we currently sit a few dollars below this. Silver is still trending lower at $16.11 (N5) per troy oz. about .50 lower than last Friday. Emini S&P unable to hold above 2100 currently trading at 2093.50 (M5) however very much still trapped in a sideways/up channel with the DOW at 17874 (M5) & Mini Russell 2000 Index at 1247.3 (M5). In the Grain sector we have Corn bouncing pretty hard off of $3.50bu (N5) now trading at $3.64bu (N5), Soybeans also bouncing off its lows trading at $9.46bu (N5) with Wheat having a fresh bullish angel cross trading at $5.26 (N5). Natural Gas trading on its lows at $ 2.63 (N5) mmBtu, then we have Crude Oil also trading lower at Friday at $57.62 (N5) also just starting to show some signs of weakness. All of these lower commodity prices have been in the wake of a neutral to weaker U.S. Dollar.

To learn more about the ‘Rath Overlay’ and everything is has to offer please click here.

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 Markets

Emini S&P – June (ES)

emini-jun

Period Moving Average Price Change Percent Change Average Volume
5-Day 2104.90 -12.50 -0.59% 1186087
20-Day 2111.80 +9.25 +0.44% 1177785
50-Day 2095.73 +39.75 +1.94% 1221692
100-Day 2076.00 +78.50 +3.9% 786585
200-Day 2031.68 +138.50 +7.08% 393535
Year to Date 2072.32 +48.25 +2.36% 735268

Technical breakdown on the 15/40 daily charts, looking somewhat bearish, however could easily see a day time reversal.

Gold – August (GGC)

gold-aug

Period Moving Average Price Change Percent Change Average Volume
5-Day 1183.4 -16.0 -1.34% 118426
20-Day 1198.3 -9.5 -0.8% 68257
50-Day 1197.8 -25.1 -2.09% 30275
100-Day 1209.9 -61.1 -4.95% 16093
200-Day 1214.3 -126.3 -9.71% 8242
Year to Date 1210.1 -12.1 -1.02% 15080

I’ve been watching this one closely, we are testing the same exact level that we were at in June of 2013, and with a descending triangle set-up which from a technical perspective a bearish set-up we have a strong support at $1,150 however my concern is we keep testing and re-testing this area and we are going into the summer months.

Corn – July (ZC)

corn-july

Period Moving Average Price Change Percent Change Average Volume
5-Day 359-5 +13-0 +3.7% 140448
20-Day 360-1 +3-0 +0.83% 160155
50-Day 371-7 -38-4 -9.55% 140954
100-Day 384-2 -52-2 -12.54% 91752
200-Day 388-4 -35-6 -8.93% 52982
Year to Date 386-2 -48-0 -11.64% 87052

Nice bounce off support at $3.48bu, still trending down overall though, and now coming up to the top of the channel for a possible short entry, with correct risk management you could make a decent short trade from $3.66bu.

Crude Oil – July (GCL)

crude-jul

Period Moving Average Price Change Percent Change Average Volume
5-Day 59.35 -2.65 -4.39% 281275
20-Day 59.66 -2.27 -3.79% 273045
50-Day 58.01 +5.64 +10.84% 162496
100-Day 55.43 +7.66 +15.32% 100249
200-Day 66.11 -33.51 -36.76% 52459
Year to Date 55.23 +1.39 +2.47% 94551

As I mentioned last week, Crude oil does look very bearish, however it’s sitting on support, if you wanted to go long you could from this level without risking the boat and having correct risk management in play.

U.S. Dollar –June (DX-M)

usd-jun

This market has been all over the place with the Greece/Euro situation from a technical perspective has been tough to gauge; personally I’ve resorted to the weekly charts to get a better feel for support, resistance, and channels.

The Week Ahead

  • 6/8 – JOLTS 10:00AM ET
  • 6/10 – Petro Report 10:30AM ET
  • 6/10 – Treasury Budget 2:00PM ET
  • 6/11 – Jobless Claims 8:30AM ET
  • 6/11 – Retail Sales 8:30AM ET
  • 6/12 – PPI-FD 8:30AM ET
  • 6/12 – Consumer Sentiment 10:00AM ET

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Risk Disclosure

THE RISK OF LOSS IN TRADING COMMODITY FUTURES AND OPTIONS CONTRACTS CAN BE SUBSTANTIAL. THERE IS A HIGH DEGREE OF LEVERAGE IN FUTURES TRADING BECAUSE OF SMALL MARGIN REQUIREMENTS. THIS LEVERAGE CAN WORK AGAINST YOU AS WELL AS FOR YOU AND CAN LEAD TO LARGE LOSSES AS WELL AS LARGE GAINS.

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.

COMMODITIES TRADING INVOLVES RISK. ONLY RISK CAPITAL SHOULD BE INVESTED. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.

This material is conveyed as a solicitation for entering into a derivatives transaction.

This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.

Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.

Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.

You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.

Filed Under: The Rath Overlay

About Drew Rathgeber

Drew began his career at one of the nation’s largest physical spot bullion dealers in 2003. From there he made the transition into commodity futures in 2006. Because he has worked on both sides of the fence, ‘Spot’ and ‘Futures’, he has an astute understanding of how the precious metals markets can work for Retail Traders, Hedgers, and Commercials. He can use this knowledge to help investors and traders alike. Drew also has years of experience in electronic software execution, automated systems, hedging, newsletters, options strategies and outright futures contracts. Through his expertise in these areas, he can guide you and answer all of your questions while teaching you how to manage risk.

Today you can see Drew working in many different capacities in the commodity futures markets. You can even see his weekly IMA Live precious metals commentary every Tuesday and Thursday or sign-up for his weekly newsletter, the “Rath Overlay”, which highlights commodity futures markets and possible future events using his time-tested yet simple trading strategy.

Drew grew up near the popular surf beaches of Southern California. Drew is still an avid surfer and snowboarder. Currently his latest craze is United States Masters Swimming (USMS). He is a nationally ranked swimmer and enjoys competitive open water distance swimming.

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Risk Disclosure

This material is conveyed as a solicitation for entering into a derivatives transaction.

This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.

Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.

Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.

You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.

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