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Home / Futures Blog / Beyond the Spotlight: Gold, Natural Gas and Soybean Oil, 01/23/2017

Beyond the Spotlight: Gold, Natural Gas and Soybean Oil, 01/23/2017

January 23, 2017 by Don DeBartolo

For the Week of January 23, 2017

This weekly feature examines chart formations, along with technical indicators, of two to three commodity markets. Breakouts of these formations may lead to trading recommendations published by the Trade Spotlight advisory service.

Highlighting This Week’s Potential Breakouts:

Gold

Following the U.S. Elections on November 8th, the April 2017 Gold futures contract sold-off 154.1 points over two months. Since near the end of the 2016 trading year, the futures contract has since rallied 90 points. Seeking additional upside in this market. The target is the 50% Fibonacci Retracement of last fall’s sell-off or 1235.7. There is a current resistance level near today’s session high at 1222.2. There is a lower trend line below recent lows dating back to the start of the year. The trend is up, as MACD is bullish, however it is waning above the baseline. The Trend Seeker (a U.S. Chart Company tool to help identify a market’s trend) is up and with an extreme ranking. The Stochastic indicator, a momentum indicator, is overbought. Watching for a pullback towards the 20-day (1180.1) and 50-day (1186.1) Moving Averages, as well as the 50% Fibonacci Retracement (1177.7) of the last rally. This will provide a better entry opportunity to the upside. The upside target is the 50% Fibonacci Retracement of 1235.7.

Natural Gas

The March 2017 Natural Gas contract is currently resting on a lower trend line with touches at 2.764 (11/09/16), 3.110 (1/09/17), and 3.169 (1/23/16). A close below the trend line triggers an entry to the downside. The Trend Seeker (a U.S. Chart Company tool to help identify a market’s trend) is currently down with an extreme ranking. The MACD, a trend indicator, is bearish below the baseline. The Stochastic indicator, a momentum indicator, is bearish as well. Three Moving Averages (the 20-day, 50-day, and 200-day) are converging. A cross-over with the 20-day Moving Average is a bearish signal. The downside target is the 2.764 (11/09/16) pivot point low. Over the past two trading years this market tends to bottom out in mid-February. Therefore this could be a shorter term trade.

Soybean Oil

There is a Head & Shoulders Formation in the May 2017 Soybean Oil futures market. A break of the neckline triggers an entry to the downside. The neckline looks to be a close below today’s low of 35.35. The first shoulder was made on 36.85 (10/24/16). The head of the formation is the twelve month contract high of 38.11 (12/08/16). The second shoulder was made with the either the 37.20 (1/12/16) or 36.45 (1/13/17) highs. The Trend Seeker (a U.S. Chart Company tool to help identify a market’s trend) is currently down with an extreme ranking. The MACD, a trend indicator, is bearish below the baseline. The Stochastic indicator, a momentum indicator, shows strong movement to the downside. The 20-day Moving Average crossed a 50-day Moving Average confirming the downside trigger. The downside target is the twelve month contract low and first point of the lower trend line at 30.44 (7/28/16).

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.

Filed Under: Trade Spotlight

About Don DeBartolo

Don C. DeBartolo is a Series 3 licensed broker registered with the National Futures Association (NFA). As a former arbitrage clerk in the S&P 500 futures pit at the Chicago Mercantile Exchange (CME), Don has floor trading experience. Taking his trade execution expertise and ability to navigate a fast-paced environment, Don transitioned to the brokerage side of the business. Since 2005, he has worked at Daniels Trading, a brokerage firm in the heart of the financial district in Chicago. His responsibilities as a broker include providing market analysis, trade execution, and money management to his clients around the world. In March 2010, he developed a formal trade advisory for clients of the firm seeking specific trade recommendations and subsequent risk management.

Due to his widespread proficiency and experience with the futures and commodity options markets, he is able to offer his clients timely insight, specialized trade recommendations, and educational information through various videos and writings.

Studying at Loyola University Chicago, Don discovered the international sport of rugby. Still today, he plays for the Chicago Griffins, a member of the highest league of rugby competition in the United States. Skill and discipline are two traits that carry over from the pitch to the trading screens.

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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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