Blue Line Breakfast Report - Cocoa Sugar Coffee OJ
“Actionable Trading Ideas that help you stay ahead of the markets”
Fundamentals: Cocoa finally broke support on the deteriorating global economic backdrop due to the coronavirus. Remember that cocoa is very demand sensitive and although the supply side has been strained due to dry weather in Ghana and Ivory Coast.
Technicals: The bull flag was broken yesterday moving trend traders to the sidelines. We will now have to wait for a move over 3020 or a break below 2714 in order to establish a new direction.
Previous Session Bias: Neutral
Resistance: 2900***, 2935****
Support: 2771***, 2750****
Fundamentals: Energy prices were crushed yesterday and are on a weaker foot to start the session today. Ultimately if the coronavirus continues to spread we should see a decline in air travel and an increase in people driving to their vacation destination therefore boosting Gasoline and ethanol.
Technicals: Sugar is back near support and is either making a head and shoulders top or just gearing up in coiling action. Trend traders remain long but the stops are near current price levels with a close below 14.53 will move traders to the sidelines.
Previous Session Bias: Bullish/ Neutral
Resistance: 15.00***, 15.29****
Key Pivot: 14.53 - Point traders would exit longs and head to sidelines
Support: 14.50***, 14.00****
Orange Juice (May)
Fundamentals: The market is drafting higher on an uptick in citrus demand. We are positioning to the long side using option strategies. Currently we like selling short dated put options to purchase longer dated call spreads. Remember that when you sell a put its the equivalent of being long a futures so manage your risk appropriately.
Technicals: The market has formed a bull flag but has pulled back to key support. Watch the key support of 97.10 and key resistance of 102.50. The trend traders are long at 102.30 on the breakout and need an extension back through the top of the flag to get the party started.
Previous Session Bias: Bullish/Neutral
Resistance: 102.90***, 105****
97.10 - Point where trend traders would head to the sidelines
Support: 99.00***, 98.00****
Fundamentals: Demand destruction continues to weigh in on coffee as well as the outside tone in the markets. With coffee shops closed in multiple countries this could spark a new downdraft in the market.
Technicals: Coffee has had a wild range over the past 48 hours with nearly a 10 cent range. Use 115 as your resistance point and 105 as your support. If we see either of these technical levels broken we may see extensions in either direction.
Previous Session Bias: Neutral
Resistance: 110***, 115****
Pivot: 115 - Spot where trend traders get long.
Support: 105***, 100****
Good luck and good trading,
Chief Market Strategist
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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