May 27, 2025
Commodity Futures Weekly Newsletter- For the week of May 12th, 2025
Feeders near a peak, Coffee continues falling, Wheat holds support, Yen rejoins trendline, Gasoline stuck in trading range, Gold can't confirm a top, Bonds below trendline, and the S&P Stalls below 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 rally stalls below 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 closed at 5,814.75 this week.
Resistance intact at 6,090.25
The recovery is currently labeled as Wave X in the middle of an ABCXABC decline. A double zigzag. Support is 5,127.25 for the advance and as it holds, the upward recovery would be thought to be in progress. With RSI still in bullish territory at 55.23, continue to allow for further upside while reading out above 50. The final resistance area below the all-time high of 6,166.50 is located at 6,090.25. This is where the recent leg of the 3-wave rise from 4,832 becomes 1.382x the length of the initial advance in Wave X.
Conclusion
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, toward 6,254.50, where the current leg of the rise from 4,832 reaches 1.618x times the length of the initial rise, and is listed on the chart. 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 trade below Trendline Support.
10 Year Treasury Bond Futures remains below previous Trendline Support. With RSI below 50, at 44.55, bearish momentum is still in play. A test of Structural Support at 109’08 is favored.
Trendline Support now Resistance
As before, 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. Only a break of 107’06 would negate this scenario. 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. The break of Trendline Support favors that outcome while lowered Resistance at 112’20’5 remains in place.
Metals
Gold Futures
Gold Futures cannot confirm a top.
Gold Futures remain above Support. Until prices retrace to below 3,111.90, it is too early to be confident Wave 3 has ended and Wave 4 is in progress. This week price settled at 3,357.70.
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. With the low of the decline from the all-time high 3,509.90 top only reaching 3,123.50 it is too early to call Wave 3 complete.
Conclusion
Continue to 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. If Gold Futures were to 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. A drop below 50 in RSI, currently at 69.04, would add weight to the proposed Wave 4 scenario.
Energies
RBOB Gasoline Futures
Gasoline Futures stuck in trading range.
No change in the analysis from last week. The weekly chart of Gasoline Futures again 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 trade above Support and beneath Resistance
With prices at 2.0789, prices fell 3 cents this week. An RSI reading below 50, now at 48.06, puts Gasoline Futures in neutral territory, still mired in the middle of the trading range. The market here is still not trending. We must continue to 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 rise back through Trendline Support.
Japanese Yen Futures moved back above trendline support this week. With structural support nearby beneath trendline support, at 0.006705 and RSI above 50, at 57.78, Yen Futures appear buoyed.
Structural support now at 0.006705
A move below last week’s low of 0.006753 would add confidence that the next sizable move lower was in progress. A second drop below Support at 0.006705 is needed to feel that the trend had turned lower.
Conclusion
Use any breaks of 0.006753 to favor a down-turn while lowered Resistance at 0.0071935 remains in place. With Yen Futures rising faster than Bonds, if the rally in Indices is complete, a break of Resistance at the April 2025 high of 0.0071935 would occur.
Grains
Wheat Futures
Wheat Futures hold Support.
Wheat Futures remain below Resistance at the April 2025 high of 569’2 after a successful defense of support of 500.
Resistance at 569’2
The next step lower to 500 and below would be achieved by witnessing a break of last week’s low of 506’02. To keep the series of lower lows and lower highs intact, Resistance at 569’2 must remain intact.
Bearish Candlestick Pattern negated
The Dark Cloud Cover pattern spotted last week was quickly negated the following day after breaching the high of the pattern. The potential reversal and continuation pattern lower did not lead to the potential follow-through lower. Though meeting the criteria, as the patterns name suggests, Cloud patterns work better near chart highs, as in the sky, then nearer to chart lows.
Conclusion
Still favor further downside price movement to follow to below 500, with 425 as the next Support while Resistance at 569’2 remains in place. Use breaks below 506’2 as confirmation. With the RSI no longer below 50, at 54.19, sentiment is not immediately Bearish. If RSI manages to again drop below 50, it will again rekindle the next attempt to break support.
Softs
Coffee Futures
Coffee Futures continue to fall.
Coffee Futures continued to again trade below Resistance at 418.90 this week, closing at 359.80. As before, 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 unchallenged
Same as last week. The Wave X high of 418.90 remains unchallenged as Resistance for further declines. As it holds, a potential “double” zig zag is the view for more eventual downside pressure. The 3-wave rise from 323.90 remains labeled as Wave X, in the middle of another A,B,C move lower as shown on the chart in greyscale. As in ABCXABC. With RSI at 40.22, bearish momentum has stayed below the midpoint this week. This favors Wave A of the next A,B,C decline to below 323.90 in motion. 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 at or near a peak.
Feeder Cattle Futures maintain a Bullish RSI reading above 50, at 62.85, so a new all-time high above 303.475 remains a possibility. The short-term Bulllish perspective here is complete however as we await confirmation of a peak in Wave 5.
Short-term support at 290
Trend channel Resistance for Wave 5 has now been met, just below the 305-310 target area. If any new marginal new high is needed to complete Wave 5, the 320 area, specifically 318.75, is the potential upper projection for a Wave 5 top to form. This is calculated by measuring the distance traveled in the widest part of the triangle, from 263.15 to 290. 36.85 points. When we add 36.85 to the triangle endpoint at 281.90, we get 318.75 as the projection. Again, thrusts from 4th wave triangles are terminal events and could end at any time. We can list 290 as support, as any drop below that level would take prices back into the span of the previous 4th wave triangle, indicating Wave 5 had likely peaked.
Conclusion
Support is nearby at the wave 4 triangle endpoint of 281.90. If price continues lower and we witness moves below 281.90, move to confidently Bearish expecting declines to break Trend Channel Support in Wave A of a larger A,B,C Corrective Wave after 5-waves up complete in an Impulsive Wave as per the Elliott Wave Theory model. A break below 50 in RSI or drop in prices below 290 would be a good indication that Wave 5 was finished and Wave A lower to beneath 281.90 had begun.
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Thank you!
Trading advice given in this communication, if any, is based on information taken from trades and statistical services and other sources that we believe are reliable. The author does not guarantee that such information is accurate or complete and it should not be
relied upon as such. Trading advice reflects the author’s good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice the author provides will result in profitable trades. There is risk of loss in all futures and
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