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XW1! trade ideas

Head & Shoulders Top in December 2022 Wheat?Paul Wankmueller CMT of Blue Line Futures sees a Head and Shoulders Top in December 2022 CBOT Wheat. Feel free to reach out with any Technical Analysis Questions! Today Wheat broke through the neckline of a Head & Shoulders top with conviction, confirming the pattern. Using the distance between the neckline and the top of the head, the continuation can conclude at the previous resistance. Futures trading involves a substantial risk of loss and may not be suitable for all investors. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
CBOT:ZWZ2022Short
by Paul_Wankmueller
Time for a Relief Rally?Wheat Fundamentals: Yesterday's crop progress report showed spring wheat ratings at 66% good/excellent, 7% better than estimates. Winter wheat is 54% harvested, a hair behind expectations. Yesterday's weekly export inspections came in at 111,830 metric tons, well below the range of estimates. Technicals: Our bias has been in bearish territory for a while now, but the market retreated back to some significant levels. Previous resistance in December and February from 800-815, was the breakout point on February 22nd. The full retracement in our eyes represents a short-term opportunity for relief in what is also a deeply oversold market. The chart still looks ugly as sin, but as with corn, there's a good risk/reward trade to the buyside at these levels, whether that be short covering or initiating a new position. We are moving our bias out of bearish territory to outright Neutral. Bias: Neutral Previous Session Bias: Neutral/Bearish Resistance: 898 ½-903****, 960-970*** Pivot: 839-849 Support: 800-815****, 739-749*** Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
CBOT:ZWU2022
by OliverSloup_BlueLine
Weat Continues Lower Wheat Technicals (September): September wheat futures continued their descent yesterday, breaking and closing below the 200-day moving average for the first time in this contract's lifetime (September 2022 futures). This opens the door for a drop down near 800 which is where the market started accelerating to the upside during the Russian invasion of Ukraine. Market moves like this often overshoot breakout points, so a trade with the $7 handle in the near future wouldn’t be out of the question. Resistance above the 200-day moving average (901 ½) doesn’t come in until closer to 960. Bias: Neutral/Bearish Previous Session Bias: Neutral/Bearish Resistance: 960-970***, 1028 ¼-1037 ½**** Pivot: 898 ½-903 Support: 839-849**, 800*** Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
CBOT:ZWU2022
by OliverSloup_BlueLine
Wheat Futures Stage a Recovery Rally Wheat Technicals: Wheat futures are attempting to rebound back towards our resistance pocket, 960-970, previously this was support. If the Bulls cannot achieve a conviction close back above this pocket, we could see the selling pick back up. With that said, a breakout and close above here could spark a wave of short covering, with little significant resistance until about 1030. Bias: Neutral/Bearish Previous Session Bias: Neutral/Bearish Resistance: 960-970***, 1028 ¼-1037 ½**** Support: 898 ½-903****, 839-849*** Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
CBOT:ZWU2022
by OliverSloup_BlueLine
Wheat Futures Start to Stabilize Wheat Techncials (September): The market has been in free fall for the last week after breaking below the low end of the range and the 100-day moving average. The market is trying to find its footing in the early morning trade, but the Bulls have their work cut out for them to repair the immense amount of technical damage that has been done since breaking down. The first hurdle come in from 960-970. Consecutive closes above there could spur prices to retrace the “scene of the crime” aka the breakdown point from last week, which is well above the market. On the support side of things, 898 ½-903 is the first pocket. This represents previously important price points and the 200-day moving average. A break and close below this pocket and we could see the selling accelerate yet again. Bias: Neutral/Bearish Previous Session Bias: Neutral/Bearish Resistance: 960-970***, 1028 ¼-1037 ½**** Support: 898 ½-903****, 839-849*** Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
CBOT:ZWU2022
by OliverSloup_BlueLine
Importance of resistance and long-term chartsI just had to pop this chart on here this morning – it is the CBOT monthly wheat chart. It demonstrates that no matter what your time frame that it is important to look at long term charts and it also demonstrates the importance of resistance. There are two resistance points to mention on here – the first is the 1349 2008 high and the second is the shallow parallel line I have drawn, which connects the 1977 low and the 2000 low. I shifted this line up to connect to the 1349 2008 high and this provided resistance at 1373. The market tested these twin perils in March and failed miserably. The mid-point of this range is about 810 and this where I suspect the market will head. Disclaimer: The information posted on Trading View is for informative purposes and is not intended to constitute advice in any form, including but not limited to investment, accounting, tax, legal or regulatory advice. The information therefore has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient. Opinions expressed are our current opinions as of the date appearing on Trading View only. All illustrations, forecasts or hypothetical data are for illustrative purposes only. The Society of Technical Analysts Ltd does not make representation that the information provided is appropriate for use in all jurisdictions or by all Investors or other potential Investors. Parties are therefore responsible for compliance with applicable local laws and regulations. The Society of Technical Analysts will not be held liable for any loss or damage resulting directly or indirectly from the use of any information on this site.
CBOT:ZW1!Education
by The_STA
1
In Search of an Edge for Non-Professional TradersCBOT:ZW1! What do Gold, Crude Oil, Natural Gas, Corn, Soybeans, and Wheat have in common? Their prices all go up in a global crisis. In other words, these strategically important commodities are positively correlated with the level of risk. “Risk Up, Price Up; and Risk Down, Price Down”. Everyday non-professional traders (NonProfs) usually have a disadvantage trading these futures contracts. Let’s see who we are up against: • Commercial Firms, including producers, processors, merchants, and major users of the underlying commodities. • Financial Institutions, such as investment banks, hedge funds, asset managers, proprietary trading firms, commodity trading advisors and futures commission merchants. These professional traders (Profs) have industry knowledge, market information, research capabilities, trading technologies, high-speed and seemingly unlimited amount of money. They contribute to about 80% of trading volume for a typical futures contract. So, what could you do in an uphill battle? Recall our Three-Factor Commodity Pricing Model( ): Commodities Futures Price = Intrinsic Value + Market Sentiment + Global Crisis Premium In peaceful times, the coefficient of Crisis Premium is zero. The Profs win out easily. When a global crisis breaks out, price pattern may be altered completely. The chart illustrates how CBOT Wheat Futures behaves before and after the start of Russia-Ukraine conflict. Based on Efficient Market Hypothesis (EMH), a baseline futures price reflects all information regarding the Intrinsic Value and Market Sentiment factors. However, the Crisis Premium is unknown to all of us. The Profs could not use fundamental analysis or technical analysis to gain a better understanding of Mr. Putin’s mindset. Few had inside information of the inner working of the Kremlin or the Russian generals, either. Your guesses are just as good as the Profs when it comes to what’s happening next. An analogue: In a close-range hand combat, the Profs have no use for their arsenal of missiles, fighter jets and tanks. NonPros with limited resources are on an equal footing to trade against the Profs. It’s critical to pick a fight that you have a chance to win. Recall that we discussed how to define global crisis with binary outcomes, and select financial instruments based on their responses to those outcomes. ( ) For CBOT Wheat Futures, Ukraine conflict has become the dominant price driver since February 14th. But after four months, we still have no clue when or how the war could end. Let’s define it in two simple outcomes: War and Peace. The first one includes all scenarios that the war would continue or intensify, where the second one could be a peace deal or a victory in favor of either Russia of Ukraine. As a NonProf, you don’t want to dive deep into the impossible task of forecasting the different scenarios. Keep it simple: War = Risk Up, Peace = Risk Down. The probability of either outcome is real. It’s difficult to predict which one is more likely. Therefore, directional trades of Long or Short are both risky. Many event shocks exist to make the wheat price fluctuate. If a major wheat producing country announces an export ban, wheat price could fly because of global market shortage. However, a phone call between Mr. Putin and Mr. Zelenskyy could punch wheat price to the ground. Russia is the No. 1 wheat exporter. An end of the conflict could end the sanctions against Russia and increase global supply by 44 million tons of wheat. Looking back in 2018 and 2019, we know how strongly Gold Futures reacted to a call between the U.S. and China. A Long Strangle options strategy may be appropriate under these circumstances. Investor would purchase a Call and a Put option with a different strike price: an out-of-the-money (OTM) call option and an OTM put option simultaneously on the same wheat futures contract. This is based on my belief that wheat futures price could experience a very large movement, but I am unsure of which direction the move will take. The following is an illustration (not an actual trading strategy): September Wheat Futures (ZWU2) is quoted at $10.54/bushel on June 14th. An OTM call with a $12.00 strike price is quoted at 17 cents. An OTM put with a $9.00 strike price is quoted at 4.625 cents. Look at the chart again, you will see wheat price at $7.80 right before the war and up to $13.70 in early March. A Long Strangle will cost $1,081.25, as each call and put contract is based on 5,000 bushels of Chicago wheat. This is the maximum amount you would lose if wheat price stuck at current level in the next two months. A big move, either up or down, could make one of the two trades profitable, and hopefully with enough profit margins to cover the other losing trade. Happy Trading. Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
CBOT:ZW1!
by JimHuangChicago
4
Wheat Is Hanging on by a Thread Wheat (July) Technicals: Wheat futures are on the verge of a bigger technical breakdown if they cannot get back into positive territory today. The next support level below here doesn’t come in until 925-930, with the more significant pocket not coming in until 897-902. Bias: Neutral/Bearish Previous Session Bias: Neutral/Bearish Resistance: 1027 ¼-1034 ¼****, 1095-1102****, 1142 ¾-1150*** Pivot: 982 Support: 960-967 1/4**, 925-930**, 897-902*** Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
CBOT:ZWN2022
by OliverSloup_BlueLine
Wheat Breaks Down to a MUST HOLD Support Pocket Wheat Technicals: Wheat futures got taken to the woodshed yesterday, breaking below the low end of support which we had defined as 1027 ¼-1034 ¼. In yesterday’s report we noted that a failure of the Bulls to get back out above this pocket and “we could see the selling pressure accelerate.”. Our next support levels below that pocket didn’t come in until 982 and 967 ¼, both of which have been achieved. As mentioned in yesterday’s Tech Talk, we wouldn’t be surprised to see the market consolidate and even rebound off of these lower support levels. Eventually, we think they will give way, and there’s not a lot of support until sub $9. Bias: Neutral/Bearish Previous Session Bias: Neutral/Bearish Resistance: 1027 ¼-1034 ¼****, 1095-1102****, 1142 ¾-1150*** Pivot: 982 Support: 960-967 1/4**, 925-930**, 897-902*** Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
CBOT:ZWN2022
by OliverSloup_BlueLine
Wheat Futures Break Below Support Wheat Commitments of Traders Update: Friday’s CoT report showed Managed Money were net sellers of 5,736 futures/options through June 14th. This shrinks their net long to 6,939. Broken down that is 77,203 longs VS 70,264 shorts. Technicals: Wheat futures are breaking below the low end of the trading range, trading to their lowest price since the first week of April. Previous support now becomes resistance, if the Bulls cannot reclaim ground above 1027 ¼-1034 ¼ we could see the selling pressure accelerate. Bias: Neutral/Bearish Previous Session Bias: Neutral Resistance: 1095-1102****, 1142 ¾-1150***, 1200-1205 ¼** Pivot: 1027 ¼-1034 ¼ Support: 982**, 967 1/4** Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
CBOT:ZWN2022
by OliverSloup_BlueLine
WHEAT FUTURES (ZW1!), H1 Potential for Bullish RiseType : Bullish Rise Resistance : 1103'6 Pivot: 1084'0 Support : 1072'4 Preferred Case: On the H1, price is moving above the ichimoku cloud which supports our bullish bias that price will rise from the pivot at 1084'0 where the overlap support and 23.6% fibonacci retracement are to the 1st resistance at 1103'6 in line with the overlap resistance, 78.6% fibonacci projection and 127.2% fibonacci extension . Alternative scenario: Alternatively, price may break pivot structure and drop to the 1st support at 1072'4 in line with the overlap support and 38.2% fibonacci retracement. Fundamentals: Since both countries, Russia and Ukraine, are major exporter of agriculture goods and their persistent war will lead to a shortage of agricultural goods and give us a bullish bias for wheat .
CBOT:ZW1!Long
by Genesiv
Wheat: More of the Same, Trading in a RangeWheat Fundamentals: This morning’s weekly export sales report showed net sales of 236,900 metric tons (MT) for 2022/2023. Technicals: Wheat futures were able to defend technical support yesterday, we’ve had that defined as 1027 ¼-1034 ¼. If you’re Bullish, this is a spot to consider buying against as the risk is fairly well defined. If we break and close below that pocket, that would be your sign to take the L and move on. If the Bulls are able to continue defending that pocket, we could see a retest of our pivot pocket, 1095-1102. Bias: Neutral Previous Session Bias: Neutral Resistance: 1142 ¾-1150***, 1200-1205 ¼** Pivot: 1095-1102 Support: 1027 ¼-1034 ¼****, 982**, 967 1/4** Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
CBOT:ZWN2022
by OliverSloup_BlueLine
Wheat Futures Test Significant Support Wheat Technicals: Wheat futures came within a stone's throw of 4-star support overnight, we've had that labeled as 1027 1/4-1034 1/4, the low was 1036 1/2. If you're Bullish (we aren't) that is a good spot to consider buying as the risk is fairly well defined. A break and close below that pocket could open the door for a break back below $10.00 and below, with the next significant support coming in closer to 975. Bias: Neutral Previous Session Bias: Neutral Resistance: 1142 ¾-1150***, 1200-1205 ¼** Pivot: 1095-1102 Support: 1027 ¼-1034 ¼****, 982**, 967 1/4** Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
CBOT:ZWN2022
by OliverSloup_BlueLine
2