Aug 092018
 

It’s really strange how somethings work. Ya never know which platform will have the most accurate information especially when it comes to futures. When trading the Live Stock futures it’s super important to expect weird anomalies.
So what to do when setting up your continuous daily/weekly charts? I donno!
The market manipulation is crazy and it usually has nothing at all to do with fundamentals. A lot of weird seasonality things happen, and they all correspond with rolling from contract to contract.

What we are witnessing in #LeanHog futures right now reminds me of #LiveCattle in 2016 when they big money funders drove down the price for what seemed to be no particular reason. People just kept getting stuck trying to buy the bottoms and just kept getting ran over for months and months until finally ppl were just finished puking out of the market and gave up, but then came the big move. I talk about it on the show – #TradeBuddiesLive

Let’s look at some charts!
The important one is at the end but lets start with Live Cattle and what happened in 2015-2016.

We can see that there was a fundamental that drove price up in 2014 then the big funds took profits until they actually started holding a neutral position, or when looking at the legacy COT report we see a short position what I like to call a “Fund Flip” since the fund flip we saw a little rally and traders trying to “catch the falling knife” but continually got ran over for the entire year of 2016 because of the fund’s resilient posture. We did get back to a fair value price but there was a massive backwardation in the future spreads which is kind of an inside trick that the funds use to jack everyone I think. They will hold the short or neutral posture and continue to drive down price even though the fundamentals were telling a different story. Fundamentals don’t matter. Technical’s do. Now if there were a big fundamental to drive up price then it would be a different story but in this case it was a normal market condition. So learning first hand how commodities tend to work, you have to wait for the commodity to prove itself and even then sometimes it can’t get the price to rise, so in most cases the funds will just keep shorting the market till it’s lowest price, even well below fair value.

Here we can see all the contract changes. Drive price down till it hits the DEC at the lowest point. Everyone thought price would hold the 120, then the 110, then the 100, then finally after everyone got completely sick of trading it and getting crushed, the mid 90’s, and then BOOM!

Now let’s take a look at Lean Hogs.
Front month getting crushed when no ones looking at the back month’s. I’ve heard very experienced traders talking about buying the V contract at 57 to trade back up to the upper 60’s but I think they forgot about something… Now the V trading 48! which was my target all along because I was thinking it would push the DEC down to the bottom which is 43.
Now for a technical anomaly. Some platforms make different rollover dates, which is when the active contract changes.

Here we are looking at a weird anomaly with TD Ameritrade’s Think Or Swim platform which is probably the most popular out of most. The price filled a crazy big gap between it’s J contract and the Q before finding a bounce. Something kept driving down that price to fill that. Other platforms rolled their active months sooner. So how did TOS see that? I don’t know but let’s look at another weird anomaly.
Here we look back in time at the Q contract. Notice anything weird?
You should cause there was about twice as many days in the Q contract in 2018 than in 2017 via the TOS platform. Don’t ask me why, maybe you know?

With other platforms you see different ways to setup your continuous charts, so what to choose?
With Sierra Chart you have a bunch of different options. I’ve been using the “Date Rule Rollover, Back Adjusted” and it seems to work good with the moving averages. The other’s will jack them up.
So WTFrig! CQG makes the V go active on the 7/27 and TOS is on 8/10. Can’t we all get along..? This is crazy. But anyways, if you use good spread charts like the ones I offer free on my site then you should be doing ok for the most part, as far as negotiating most of the madness.

Bottom line is that the price movement in a normal market condition can be manipulated so much that you can’t leave any stone unturned. Always watch the spreads and COT on all commodities and always, always, expect the unexpected.

Have you noticed me talking about this on Trade Buddies Live for the last month..?

May 102017
 

Lately on #TradeBuddiesLive we have been keeping an eye on spreads, and man there have been some interesting things going on. Here’s some charts I’m very much interested in. Tune in on today’s live show for more info.

Lean Hogs-

Live Cattle –

Wheat –

May 052017
 

OMG! The most insane action I’ll probably ever see!  After 4 or so Limit Up’s hit we now see 2 Limit Downs  following the Thursday open which was an instant gap to limit up, CRAZY!!  I watched the price action on my ladder all morning on Thursday and man was it interesting to watch the big dogs slowly chop away at the limit orders that were stacked on the top. After a few thousand contracts were filled there was finally a relief and then the stops just flowed and you could watch them taking their profits as the top blew off, thus being a “blow off” top. A lot of times the following day will be a doji and them a quick double top before a larger move down but the selling just kept up with all longs liquidating. It’s impressive to watch.

On the chart we can see the gap fill following the contract roll which was a $14 difference then the bog pop. Gap up a to limit up is ridiculous and I don’t think I’ll ever see anything like it again. 

And now we see the lock limit down and none of the longs can get out and are trapped.

We could see another big day on Monday cause there could be another considerable gap but a lot of times you’ll see the limit orders are set to “day” meaning they will cancel at the end of the session so right at the close you will sometimes see thousands of contracts “pull” (removed). Going from Wed to Thursday I don’t believe think they pulled a lot of them or they were set to “Good Till Cancel”.

Well it sure is crazy!!  What an experience.

May 022017
 

Lots of bearish talk on cattle over the last few weeks but when you think about the backwardation and where the cash price trading then the technical studies of being over bought go out the window. On this chart we can see the difference in the contracts and when the April contract ended/rolled into the June it was so under priced that they shot the gap. Unbelievable! Biggest gap fill EVER! But why wouldn’t it?

Well,   you live, you learn…

Bottom line I think is to be aware of the entire market and take commentary lightly. We now seem to be chasing the cash price…

I think the ppl talking bearish on Cattle were actually long. 😉

Aug 302016
 

BUY /LEZ6 @107.15

2016-08-30_11-58-17

The big johnson candle. DEC Live Cattle. The price action today was nuts. Going into the close there was major buying following a slow depressing grind lower. Looks like a head fake break down there. Go long!

download

I’ve been catching some good trades on Cattle and Hogs at these low levels but I haven’t been posting them. Kinda chilling out on the Market Trade posts. I did long lean hogs though recently and I’m in the red. Look for big moves off the harvest lows dudes!!!  With all the commods on lows they should make monster moves to the up side VERY soon.
Don’t forget I’m watching December contracts! You need to be able to take a ton of pain. Like a kick in the nuts. For example I was already in cattle this morning so I was down around $450 before they rallied it into the close. Ended up with $500 positive and hopefully we’ll see a lot more big players step in for tomorrows trade after they take notice of this price action.

nutcrush

9/6/16 – BUY /LEZ6 @103
I’m getting fucking hosed. I made a perfect trade for a day and didn’t take it off. DOH! Just added 1 more. Man, good think I got balls of titanium. This is really something you should never do. My brain keeps telling me to stay in the trade because of certain levels on the big picture. How much lower can it go?  Shit I don’t know but I guess it’s good for the poor cows if those stupid cow Nazi’s can’t farm them no more.

9_6_2016 , 12_39_29 PM

9/8/16 – Holy fuck! These god dam bastards keep trying to shake everyone out. It’s like they literally hold traders by their ankle upside down and shake every last penny out of them. So I’m noticing a couple things about the cattle trades and looking at the big picture you’ll notice that we are pretty much on the lower value area of the all the collected volume from the last 10 years. Looks like Feeder Cattle (GF) has a little more room for downside but the Live Cattle (LE) has already hit what seems to be the bottom sitting well below the 10 year lower value area.

2016-09-08_GF

2016-09-08_LE

So I’m holding my Live Cattle and getting hammered on it. I feel like the Michael Burry from the story “The Big Short” when he holds his position for a long long time while the crooks on Wall Street jack the market and he gets crushed in the process until the trade finally turns his direction. I need to dig out my heavy metal albums I think. I’m ready to double my position when these fucking assholes push it even lower. So folks, if you learn anything from this trade it is wait for the trade to “turn and confirm” and don’t try and catch the falling knife.

9/9/16 – SOLD/LEZ6 @104.975

9/12/16 – So I put a limit order to get out of one of my contracts right around my average which got filled Friday. I did have to pay up for it by just a few but it was worth it because the 105 seemed like it had a little resistance and in case they crushed it again I wanted to be able to double down when it sank lower again. Fortunately it didn’t drop and we may have just seen a BIG bottom in Live Cattle. YEY!  I do have a stop right now at 105.90 and now trading 106.725 I have a great chance of keeping the trade going because I’m hoping tomorrow it will clear 107 and it seems there is good support here and today was WASDE so to see good up momentum following WASDE is strong. So at this time my average for my trade should be right around 105.25ish. So this will be a profitable trade unless I do something real stupid and take my stop out which I don’t want to do and like Gary Kamen says “Do not let a winning trade turn into a loser.” which I did at the very beginning of this trade. Here’s what I’m thinking, if there is a DI cross coming up I will be looking to add in contracts or scalp intraday long. Here’s the cool thing. If I see the confirmations I’m looking for I can simply scalp off value area low resets and stay in as long as possible and if the trade go’s against me I can leave it on and be confident that the chances of it being a positive trade before contract expiration is very good. Got to be on the right side of the big picture. I have to keep an eye on the long term trend. Hope to see the 10 year POC (point of control) on the chart above which is around 124. Below you can see the current daily chart with the DI cross I’m looking for.

2016-09-12_LE

9/13/16 – SOLD/LEZ6 @105.90
Darn it! They are gonna chop this sucker. I’m out with a small profit. I’ll be looking to buy the dip.

2016-09-13_LE

DISCLAIMER – JVOND SUCKS AT INVESTING! FOR LEARNING PURPOSES ONLY!