Strategy Idea...Seasonal Nat Gas Play.
Before the chaos of 2021/2023, natural gas spent nearly a decade trading between $2.00 and $4.00, with the mid-$3.00s being significant resistance. Further, fracking technology has kept supplies abundant in the U.S. with limited opportunities to export. Thus, we suspect that we are returning to a quiet phase of $2.00 to $3.00 gas as a norm. We like playing the downside in gas, but positions should be kept at minimal quantities. The chart and bearish seasonality make this a high-probability venture, but the risk of being wrong is larger than in other markets. Seasonality suggests the natural gas market "should" give back most of the gains.
Strategy Idea...Reload bullish oil positions.
The oil market has completely ignored stock market strength; it wasn't that long ago that these markets were two peas in a pod. They did everything together. However, sometimes positioning trumps everything else, and the wave of speculative buying lured by Middle East turmoil had to be unwound due to a lack of supply disruptions. Nevertheless, the uptrend is intact, and fundamentals haven't changed. Oil is still in an uptrend; we believe this is a reload.
Strategy Idea...Buy December Corn Puts
Since the high-flying grain rally of 2022, corn futures have habitually rolled over on, or around, the 200-day moving average. Corn rallies have habitually failed.
Strategy Idea...Bearish wheat spread for hedge or spec.
The option market has built quite a bit of volatility premium into wheat calls. Perhaps they recall the 2022 wheat rally that saw prices nearly triple in price before collapsing. We talk to a lot of farmers, and nearly all of them are complaining about the weather and yield challenges. The options market is pricing in a bigger wheat rally, but we doubt it will materialize.
The DeCarley Perspective...Complacency Kills.
The reward for holding an asset is often slow, but risk comes fast. There could be many reasons for it, but my take is that investors become more comfortable buying as the market moves higher. The result is slow and consistent buy orders hitting the market. Complacency Kills
Strategy Idea...Synthetic calls in the Japanese Yen
The Bank of Japan has been noticeably absent as the Yen has declined to the lowest level in several decades against the dollar. Yet, we see sharp support nearby (.6200), seasonality generally calls for an April or May low, and the world is short Yen in one way or another (via speculation or carry trade positions in which investors borrow Yen to purchase assets in higher-yielding currencies). Further, while Japan is still behind other central bankers in normalizing interest rates, they have started the process. CORRECTION: THE SYMBOL FOR THE MINI YEN IS J7U24 (NOT E7U24)


If "don't fight the Fed" were a picture.
We are generally optimistic, and we know it pays to be bullish on equities far more often than to be bearish. Yet, we have a sneaking suspicion that we are on the eve of a risk event in which the piper must be paid for all of the creative and aggressive economic stimulus that has occurred since the financial crisis. Is 2024 the new 2007/2008?
The DeCarley Perspective...Extreme Currency Valuations have a Shelf Life.
The Japanese currency has been in a freefall against the US dollar for weeks, leaving the Yen at its lowest valuation since the 1990s. While the Bank of Japan is known for intervening in the currency markets, the Central Bank has been noticeably quiet. Extreme Currency Valuations have a Shelf Life
The ES can't hold a bid, this correction isn't over.
The aggressive stimulus and liquidity injection of 2020 have left us with an environment of aggressive speculation in which market participants chase prices higher without regard to risk. Just like too many dollars chasing too few goods caused inflation, assets have increased in value as too many investment dollars make their way into a handful of assets. The US stock market has always increased steadily over time, but the slope of gains forged in recent years is unnatural. Further, higher interest rates have created competition for investment dollars; Treasury buyers are paid 4.5% to 5.0% interest to wait for the next shoe to drop, at which time they could benefit from price appreciation. Warren Buffet referred to this market cycle as a casino; I live in Vegas and know the house always wins. In the big picture, stocks are expensive, and bonds are cheap.
The S&P 500 has broken some bullish patterns.
The equity market has outperformed the most bullish projections, but it has also had some help. It is difficult to justify current valuations with fundamentals; although the economy performs well on most metrics, corporate earnings are overpriced. We've noticed similar dysfunction in some commodities;the most glaring example is cocoa. If the trend changes, there will be signs.
The DeCarley Perspective...Crude oil has Rallied without the Help of Speculators or Chinese Demand.
The oil market has quietly assembled an impressive $15.00 per barrel rally. The lack of fanfare can likely be attributed to the lack of volatility. There were days in 2022 when oil jumped or collapsed from $10.00 to $15.00 in a single trading session, yet the run from $70.00 to $85.00 took about three months. These slow grinding rallies are generally not to be sold into (been there and done that, don't do it). Crude oil has Rallied without the Help of Speculators or Chinese Demand
The DeCarley Perspective...Cocoa futures have gone mainstream.
Since the early 1980s, cocoa has been arguably the most boring commodity; until now, the price of cocoa hovered between $1,500 and $3,000 per ton, with only a few temporary breaches of this range. More recently, cocoa futures spent a decade mostly trading between $2,000 and $3,000. Thus, the market was well overdue for a supply scare. However, even the most bullish of bulls probably didn’t see $10,000 cocoa on the horizon. I have some strong and controversial opinions on the matter. Cocoa futures have gone mainstream.

Futures Chart Analysis

ES~Weekly S&P 500
ZN vs ES ~ Monthly
ZW ~ Monthly (Bitcoin Comparison)

DeCarley Press

Can the Yen find a bottom?
Extreme currency valuations tend to have a shelf life. We talked about this on Ausbiz TV last night (Tuesday morning in Sydney). Today’s Yen weakness feels as unsustainable as the 2011 Yen strength was. Extreme currency valuations tend to have a shelf life. We talked about this on Ausbiz TV last night (Tuesday morning in Sydney). Today’s Yen weakness feels as unsustainable as the 2011 Yen strength was.
Talking oil and gold on Schwab Network
Crude oil futures are overstretched, but the big picture is probably higher for longer. Carley discussed this and the gold breakout on Schwab Network. CLICK HERE TO VIEW THE CLIP
What happens if oil breaks above $84.00?
Futures and options broker Carley Garner joined Nicole Petallides on the Schwab network to discuss the implications of a break above $84.00 in the front-month futures contract. Seasonality is supportive of the oil rally, and momentum above $84.00 could lead to prices in the vicinity of $100. Click Here to Watch the Video
Crude oil, gold, currencies, and more on the Schwab Network
Futures and options broker, Carley Garner, joined Schwab Network this morning to explore the landscape in crude oil, gold, and currencies. The discussion included weakness in Chinese commodity demand, OPEC production cuts, and seasonal analysis. Futures and options broker, Carley Garner, joined Schwab Network this morning to explore the landscape in crude oil, gold, and currencies. The discussion included weakness in Chinese commodity demand, OPEC production cuts, and seasonal analysis.
Will crude oil see $100 again?
Analysts are making bold bearish calls in crude oil, but futures broker, Carley Garner, has a differing opinion. Scott Shellady and Carley talked about it on the Cow Guy Close on RFD-TV. CLICK HERE TO WATCH THE SEGMENT


Good Friday Schedule 2024
For all intents and purposes, the futures markets will be closed on Friday, March 29th. Accordingly, we will be out of the office tomorrow but will be available by email and text message (numbers below) should an emergency occur.
1099s are available in the Gain Reports Portal and the Zaner360
You can now download your 2023 1099 reports when logged into the Zaner360 platform by going to "Reports", then "Statements", then "1099s".

Trading Webinar Archives

Posted on 10/27/2023
Seasonally bullish option spread strategy using E-mini S&P 500 futures options.
DeCarley Trading
Posted on 09/29/2023
Commodity Option Trading in Today's Market Environment
DeCarley Trading
Posted on 09/07/2023
I'll be speaking in Sydney Australia at the Australian Technical Analysts Association Conference!
DeCarley Trading
Posted on 08/01/2023
Revisiting July 2022 Commodity Option Trading Strategies
DeCarley Trading
Posted on 07/25/2022
The Futures Markets can be used for Portfolio Hedging and Portfolio diversification.
DeCarley Trading
Posted on 07/25/2022
Strategizing in today's hot commodity markets.
DeCarley Trading

Live Economic News/Data

Gold, silver and copper rally has just taken a breather — new highs are not that far off, experts say
UBS strategists in a note last week raised their forecasts for gold to $2,500 per ounce by the end of September, and $2,600 by year-end.
'Drone wall' against Russia: Six NATO countries announce border defense plan
Lithuania, Latvia, Estonia, Poland, Finland, and Norway are joining forces to build a 'drone wall' to protect their borders against Russia.
Deepfake scams have robbed companies of millions. Experts warn it could get worse
A growing wave of deepfake scams has looted millions of dollars from companies worldwide, and cybersecurity experts warn it could get worse as criminals exploit generative AI for fraud.

Futures Market News

Posted on 05/24/2024
Live cattle cash market firm, 5/24/24
CME Group
Posted on 05/24/2024
S&P 500 futures close lower on the week, 5/24/24
CME Group
Posted on 05/24/2024
Corn futures volatility higher ahead of holiday, 5/24/24
CME Group
Posted on 05/24/2024
WTI bounces after 4-day slide, 5/24/24
CME Group
Posted on 05/24/2024
Treasuries consolidate amid strong consumer sentiment data, 5/24/24
CME Group
Posted on 05/24/2024
Palladium futures sink for 4th day, 5/24/24
CME Group