Current Positions:
- Long two corn July week 2 424.00 call options.
- These were assigned to Sep. futures on Friday, ~$700 profit. Recommend holding.
- Long two soybean July week 2 1134.00 call options.
- These were assigned to Aug. futures on Friday, ~$4,750 profit.
- Exit options to consider:
- Protective stop: 1170 stop (really far away, low of Friday’s outside day up)
- Target: 1220–1225 using a stop-limit order to attempt to capture a potential high.
- Long 2 October Lean Hog Futures
- After an outside day down on Friday and Follow through today we suggest exiting this position at the market. ~$2,500 profit.
New Long Live Cattle Recommendation
We favor establishing a long position in August live cattle futures. From a technical perspective, the correction that began in late June has approached key support levels. Friday’s test of horizontal support, drawn from the low of the June 4 outside day up, was met with buying interest, reinforcing that level as an important technical floor. The market’s inability to extend the recent decline after testing support suggests selling pressure is beginning to fade.
A 50% retracement of the decline from the June 22 high projects an initial upside target near 241.325. A move through that level would likely encourage additional technical buying and could set the stage for a retest of the June highs. With support clearly defined beneath the market, current levels offer an attractive risk-to-reward opportunity for establishing long exposure.
Live Cattle Recommendation
Entry: Buy 2 August Live Cattle futures at the market.
Target: $245.00-$250.00. This level represents a cluster of previous lows/highs from June 18-26, and will likely be a key resistance point.
Risk Exit: Exit on a close below $233.750. As noted above, this level marks key horizontal support extending from the June 4 outside day higher. A close below this level would invalidate the current bullish technical outlook and suggest additional downside is likely.
If you have any questions about the trade or would like to discuss alternative entries (or any other trade really), give your broker a call. If you don’t have one, our main line is 800.558.3431.
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Disclaimer: The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that Brock Investor Services, Inc 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 is based on the opinion of Brock Investor Services, Inc and 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. There is a risk of losses as well as profits when trading futures and options. This brief statement does not disclose all the risk aspects of derivative trading, therefore careful study carrying FCM’s Risk Disclosure is strongly encouraged before the recipient of this email trades.