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Chart View: Top 7 Monthly Futures Charts by Jeff Gilfillan

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Past performance is not indicative of futures results—no more indicative than February and March of 2020.

 

For this month’s Chart View, I pulled a handful of monthly continuation charts to illustrate the severity of the recent price action since the global outbreak of Covid-19.

 

The energy, livestock/dairy, and equity index sectors suffered the largest year-to-date % moves through April 15th, as illustrated in the first column chart below. This year’s high-to-low % ranges are more severe, as several contracts such as the E-Mini Dow and Palladium have retraced back more than 50%. As you can easily see on the E-Mini Dow chart, the initial move touched nearly to the exact 50% point from high to low since the inception of this contract and back to the late 90s relative to the Dow cash index.

 

The low for the S&P 500 futures touched just above the 8-year moving average (SMA) and the 38% fib level of the H/L range of the contract’s life dating back to the early 80s.

 

Among these charts, some reverted to long-term value levels and some diverted away from strong levels of market acceptance. The E-mini S&P 500 reverted to top of long-term value levels built post-financial-crisis from 2014 to 2016, within the range of 1800 to 2200. The E-mini Dow futures reverted to top end of a long-term median level and value level (often the same) at 18,500. ICE US Cocoa futures also reverted to previous long-term value and median levels just recently (December ‘19) abandoned.

 

The charts displayed below that diverted away from long-term value areas are gold, feeder cattle, and Brent crude oil futures. CME Comex gold futures actually broke away from long-term value (1175-1330) back in July of 2019 and created a bull flag, and they broke out again just prior to and following COVID-19 related volatility. March was a roller coaster of a month that involved a liquidation-style move lower which touched the lower part of the previous bull flag and quickly  found new buyers, ultimately developing an outside month and touching the 61.8% fib point of the 2011-2012 range that hit all-time contract highs. As of this writing, we are sitting right on the 50% point of that range. The outside day target would hit around 1840, which is below all-time contract highs at 1911.

 

Feeder cattle and Brent crude futures diverted south of long-term value zones. Feeder cattle has built strong value from 140-149, which is also the 50% price level going back to 1996. The swift rejection of this area quickly resulted in a move that touched the 61.8% level of the value zone from 96-118 developed mostly between 2004 and 2010. As of this writing, the market is sitting right on the top of this former value zone. Brent crude futures, along with RBOB gasoline futures, suffered the largest YTD % moves and certainly had other external forces driving price discovery. ICE / CME Brent crude oil futures tested contract lows going back to 2002. Long term value zones are quite wide (from 46-80) and go back to price discovery developed since 2016.

 

Based on how the aforementioned markets reacted to the global pandemic, it might be wise to look at gold and crude oil for signs of stability, as they appear to be the markets (in my book) that were most ahead of the facts.

 

 

DISCLAIMER: Trading in futures products entails significant risks of loss which must be understood prior to trading and may not be appropriate for all investors. Past performance of actual trades or strategies cited herein is not necessarily indicative of future performance. The information contained herein is provided to you for information only and believed to be drawn from reliable sources but cannot be guaranteed; Phillip Capital Inc. assumes no responsibility for errors or omissions. The views and opinions expressed in this letter are those of the author and do not reflect the views of Phillip Capital Inc. or its staff.

 

 

CME/ICE Futures Year-To-Date % Change as of 04/15

 

Source: Barchart.com (data)

 

 

 

CME Group – CME S&P 500 futures – 5, 8, 24 year Moving Averages (SMA)

 

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CME Group – CME S&P Futures Continuation Monthly

Chart – Track N’Trade

 

Futures trading is not for everyone. The risk of loss in trading can be substantial. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.

 

 

 

CME Group – COMEX Gold futures (GC) - YTD as of 04/15 = +11.05%

 

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CME Group – CME Gold Futures Continuation Monthly

Chart – Track N’Trade

 

Futures trading is not for everyone. The risk of loss in trading can be substantial. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.

 

 

 

CME Group – CBOT E-Mini Dow futures (YM) - YTD as of 04/15 = -20.30%

 

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CME Group – CBOT E-Mini Dow (YM) Futures Continuation Monthly

Chart – Track N’Trade

 

Futures trading is not for everyone. The risk of loss in trading can be substantial. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.

 

 

 

CME Group – NYMEX Palladium futures (PA) - YTD as of 04/15 = -2.29%

 

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CME Group – NYMEX Palladium (PA) - Futures Continuation Monthly

Chart – Track N’Trade

 

Futures trading is not for everyone. The risk of loss in trading can be substantial. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.

 

 

 

Top 3 active futures’ (CME/ICE) losers YTD are energy related. #1 CME Group – NYMEX Crude Oil WTI (CL); #2 NYMEX Gasoline RBOB (HO); #3 ICE/CME – Crude Oil Brent.

 

ICE Crude Oil, Brent Down 56.55% Year-to-Date as of 04/15

 

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ICE Crude Oil, Brent – Monthly Continuation

Chart – Track N’Trade

 

Futures trading is not for everyone. The risk of loss in trading can be substantial. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.

 

 

 

ICE Cocoa futures - YTD as of 04/15 = -18.31%

 

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ICE – Cocoa futures (CO)- Futures Continuation Monthly

Chart – Track N’Trade

 

Futures trading is not for everyone. The risk of loss in trading can be substantial. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.

 

 

 

CME Group – CME Feeder Cattle futures (FC) - YTD as of 04/15 = -20.81%

 

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CME Group – CME Feeder Cattle futures (FC) - Futures Continuation Monthly

Chart – Track N’Trade

 

Futures trading is not for everyone. The risk of loss in trading can be substantial. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.