Commodity Futures Weekly Newsletter- For the week of May 12th, 2025
Feeder Cattle sets a new high, Coffee holds resistance, Wheat below support, Yen on support, Gas in mid-range, Gold due for correction, Bonds support is vulnerable, and S&P Futures push to resistance.
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A publication by the Research Team at Capital Trading Group: 800-238-2610
Indices
S&P E-mini-Futures
S&P Futures recovery rally pushes toward Resistance.
Hello and Welcome! As usual, in this week’s newsletter we will start with the Indices, with the E-mini S&P in focus. The daily chart shows a continued recovery from the chart low of 4832, following a clear A,B,C decline from the chart high of 6,166.50. The market posted a 5,741 high this week.
Resistance remains located at 5,824 & 5,837.25
The advance from the 4,832-chart low remains in 3-waves higher. To keep the series of lower lows and lower highs intact from the top, 5,837.25 is key resistance. The recovery is currently labeled as Wave X and if each leg of the 3-wave rise from 4,832 becomes equal in Wave X, we see 5,824 as a measurement below 5,837.25. Support remains at 5,127.25 for the advance and as it holds, the upward recovery would be thought to be in progress. If 5,127.25 is breached, the recovery would likely be complete. With RSI still in bullish territory at 57.02, continue to expect further upside while reading out above 50.
Conclusion
Continue to use 5,127.25 as critical support for the advance. With a sharp rally, there is little to identify as meaningful interim support. We can see, the rise is in 3-waves. If we witness a 5-wave rise from 4,832, the focus would be on a complete correction ending at 4,832 and a continuation to new highs above 6,116.50. If critical support at 5,127.50 is violated to the downside beforehand, favor another zig zag lower toward 4,832 and 4,711 at the 23.6% Fibonacci Support of the entire rise to the 6,166.50 all-time high of the Index. The 5,520 high in the initial leg up from the Wave C low of 4,832 is the level which would be the closest area of support.
Financials
10 Year Treasury Bond Futures
10 Year Bonds remain above Support but appear vulnerable.
No real changes this week. The 10 Year Treasury Bond Futures remain above the prevailing Trendline Support. The current rise from Trendline Support can only be counted in 3-waves up, not the 5-waves up needed to feel a break of 114’10 was the next event. Without that occurrence, Trendline Support is vulnerable.
A 3-wave advance from Trendline Support remains the key feature
The price action from the 107’06 early 2025 low would be the base for any new advance. As is, the action can continue to be construed as constructive, with 5 small non-overlapping waves to the recent 114’10 high. This would be Wave 1 of a new cycle. Clearly, any new high above 114’10 would favor this outcome. A break of Trendline Support would not negate this scenario. Only a break of 107’06 would. With RSI below 50, at 44.95, bullish momentum has been subdued. Add in the rise from Trendline Support could only manifest 3-waves higher and the recipe for a breach of Trendline Support and test of Structural Support of 107’06 is brewing. With the recovery in Stock Indices incomplete, the correction in Bonds may also be incomplete.
Conclusion
The main support level of 107’04 is pivotal as any breaks would be interpreted as bearish for Bond prices. Any breaks above 114’10 would be Bullish for Bond Prices. Until then, a decline below 109’08 at the April 2025 low may be needed. Use any breaks of Trendline Support to favor that outcome.
Metals
Gold Futures
Gold Futures still digesting recent gains.
Gold Futures trend remains up. It appears a correction is due to retrace Wave 3 in an eventual Wave 4 retracement. Until prices retrace to below 3,111.90, it is too early to be confident Wave 4 is in progress.
Trend Channel resistance remains in force
Gold Futures closed the week again below Trend channel Resistance. ending the week at 3,329.10. It will take a weekly close above the all-time high of 3,509.90 to keep Wave 3 up in progress. Without that occurrence this week, prices remain in a position to begin the awaited pullback. The evidence that Wave 3 is mature is building. Prices nearly reached the 3.618x Fibonacci Extension target of 3,513.50, stalled at Trend Channel Resistance and have closed consecutive weeks below Trend Channel Resistance. RSI also reached an Overbought condition and there is a small divergence between the two most recent highs. Despite those observations, until prices retrace to below 3,111.90, taking back 23.6% of the Wave 3 gains, it is too early to be confident Wave 4 is in progress.
Fibonacci Supports for a retracement are at 3,111.90 & 2,865.70
A very shallow correction would retrace 23.6% of the gains in Wave 3 from the Wave 2 low of 1,823.50. This is listed on the chart at 3,111.90. A deeper Wave 4 correction would retrace 38.2% of the gains in Wave 3. This projects to 2,865.70 and is also listed on the chart. This 38.2% Fibonacci retracement level is a more standard measure for 4th Wave retracements and aligns well with current Trend Channel Support.
Conclusion
Prepare for a deeper correction in an eventual Wave 4. A sideways to lower correction in Wave 4 would precede eventual new highs. A simple A,B,C decline as a zig zag or a more sideways Bullish triangle are Wave 4 candidates. With escalating tensions abroad, if Gold Futures close a Daily session over 3,509.90, prior to reaching 3,111.90, then 3,802.10 would become the Fibonacci Extension target, at 4.236x the length of Wave 1 in a persistent Wave 3.
Energies
RBOB Gasoline Futures
Gasoline Futures remain in the middle of trading range.
The weekly chart of Gasoline Futures continues to show a range-bound market with no break of defined ranges. It will still take a weekly close above 2.32 as a breakout sign of the recent range to target upper resistance at 2.62 and 2.79 respectively. Until then, the low of 1.8545 is support for the trading range.
Prices could not break through Support of the current trading range
With prices at 2.1112, prices rose 9 cents this week, taking back last week’s 9 cent decline. An RSI reading below 50, now at 49.79, puts Gasoline Futures in neutral territory. Right smack dab in the middle of the trading range. The market here is not trending. We must patiently await more price action to identify the next clear opportunity.
Conclusion
As before, accept any weekly close above 2.3215 as an upside breakout of the recent range. Conversely, accept any weekly close below 1.8545 as a downside breakout of the recent range.
Currencies
Japanese Yen Futures
Yen Futures close the week on Trendline Support.
Japanese Yen Futures show each breach of trendline support or resistance has led to potentially sizable gains since the start of 2024. With trendline support being tested, watch for a Daily close below the support line as opposed to a breach. With structural support nearby beneath trendline support, a secondary close below 0.006796 would add confidence that the next sizable move lower was in progress.
Trendline support could be broken soon
With a current RSI reading of 47.06, the move back below 50 is what was needed to feel that the supportive trendline will eventually give way to lower prices. The emerging series of higher highs and higher lows is still intact while prices remain above 0.006796, shaded in grey. This 0.006796 level resides below Trendline Support. If violated, the January 2025 low of 0.006330 would move to key Support, much like the 107’06 corresponding level in 10 Year Bonds.
Structural support at 0.006796 is key
Both Bonds and Yen Futures remain precariously above their respective Trendline Support. As that remains true, downside opportunities are premature. It would become mature however were 0.006796 to give way. The correlated 10 Year Bond level is 109’08.
Conclusion
While above 0.006796, the series of higher highs and higher lows remains place. As before, any Daily close below trendline support would be the first sign needed to turn Bearish. The second sign, a Daily close below 0.006796 would be a strong indication that the rally from 0.0066330 in January of 2025 was complete.
Grains
Wheat Futures
Wheat Futures close the week below Support of trading range.
Wheat Futures have broken through support at 525. This week, a second Daily close below 525 was registered at 521, besting last week’s close of 524’4. As stated last week, the next move in prices to below 524’4 could present a Bearish Opportunity to well below 500 and here we are. Maintain Resistance at the secondary high of 575’2 if a new series of lower lows and lower highs continues to escalate.
Trading Range low at 517’4 is the next downside hurdle
Prices moving below 517’4 would eliminate the potential that a new cycle higher was building, thereby clearing the way to further downside. The first step in that direction, a Daily close below 525 was achieved at 524’4. The next step was achieved this week with a week ending Daily Close of 521. Step by step would lead to a jump over the next downside hurdle at 517’4 to leap lower to 500 and below.
Conclusion
With a Daily close beneath support at 524’4, at 521, favor further downside price movement to follow to below 500, with 425 as the next Support while Resistance at 575’2 remains in place. Use breaks below 517’4 as confirmation. With the RSI below 50, at 38.79, sentiment remains Bearish.
Softs
Coffee Futures
Coffee Futures hold beneath Resistance.
Coffee Futures traded below Resistance at 418.90 this week. Until we see a Daily close above Resistance, a second A,B,C decline to come remains the preferred view.
Resistance at 418.90 remains in place
Last week’s high at 418.90 remains as Resistance for further declines. As it holds, a potential “double” zig zag is the view for more eventual downside pressure. The current 3-wave rise remains labeled as Wave X, in the middle of another A,B,C move lower as shown on the chart in greyscale. With RSI at 52.50, bearish momentum would gain steam by falling below the midpoint which it could not achieve this week. This would ignite Wave A of the next A,B,C decline to below 323.90. Only a Daily close above 418.90 would mandate a revised view.
Conclusion
Continue to favor more downside from below 418.90. Conversely, if a full 12345ABC cycle is indeed complete as per the model, at 323.90, a new high above 429.95 would become favored on a Daily close above 418.90 in a revised view.
Livestock
Feeder Cattle Futures
Feeder Cattle sets new all-time high at 298.50.
Feeder Cattle Futures remain firmly within the up-trending channel. With a Bullish RSI reading above 50, at 68.27, a new all-time high of 298.50 was printed this week. Remaining Market Neutral, with a shortterm Bulllish perspective here remains the call awaiting onfirmation of a peak in Wave 5.
Another new all-time high at 298.50 in thrust from a Bullish Triangle
This week’s high of 298.50 in the thrust higher from a Bullish triangle pattern continues. As previously discussed, thrusts from Wave 4 triangles precede 5th Wave peaks however as per the model. This means any further new highs would be ending a 5-wave rise not starting one. Trend channel Resistance for Wave 5 is perched above in the 305-310 area and rising, with 320 the potential upper projection for a Wave 5 top to form. Again, thrusts from 4th wave triangles are terminal events and could end at any time.
Conclusion
The Bullish triangle continues to thrust to further new all-time highs. In the optimum scenario, Wave 5 will reach 305 and meet Trend Channel Resistance as shown. Downside opportunities may arise from the top. Support is nearby at the wave 4 triangle endpoint of 281.90. If price moves below 281.90, move from Neutral to Bearish expecting declines to break Trend Channel Support in Wave A of a larger A,B,C Corrective Wave after 5-waves up in an Impulsive Wave as per the Elliott Wave Theory model overlayed upon the chart.
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Thank you!
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