K DELTA 2015: Commodity futures trading system
Updated 04-13-15
KDelta 2015 profit =$21,651 = 216.5% for 2015 YTD: 62% winning trades
Active trades: Natural Gas & Soybean Meal
Natural Gas (May) prices should bottom in 2015. The price of Natural Gas has been depressed for over 6 years by excess supply and increasingly efficient means of low cost high volume extraction through Fracking. The demand side of the equation has languished far below its potential due to politics despite the cleaner aspect compared to Coal or Gasoline. There are many kinds of Natural Gas and all were in production decline until the fracking boom exploded higher in 2008. Shale Gas production has gone from less than 5% to over 40% of domestic Natural Gas supplies over the past decade. Currently Large Speculators, Hedge Funds and Managed Money have completely abandoned ship by Shorting Natural Gas, expecting prices to stay low or go lower. Their extreme pessimism hints that prices will bottom in 2015 and begin to rally. An economic acceleration in Europe and elsewhere will likely be the trigger that confirms a bottom in all fossil fuels before year end. Thus far demand growth remains weak, the rising Dollar keeps deflationary pressures on all commodities and very low agricultural prices remove some demand for natural gas in fertilizer. The fundamentals are Bearish and prices reflect the current reality, however due to very negative sentiment, any upward break of the downtrend lines (~$3.00) is likely a sign that a longer term rally has begun.
Short term, Natural Gas has room to fall based upon our recent Sells at the support line at 2620 basis May futures. We have a profit stop in place awaiting a potential exit in the 2420’s.
Soybean Meal (May)
The strong Dollar is a deflationary factor that encourages cheaper goods from abroad. The outlook for US agriculturals and Soybean Meal continues to be Bearish with (1) strong Dollar and (2) weak Brazilian Real currency (down 30% since August) along with (3) excellent US growing conditions and (4) the continued effort by Brazil to expand their export crops (26% more soybeans imported into the US over the past 2 years). Exec Spec readers are short from >314 with 300 and 292 as the next likely targets. However, like Natural Gas, Managed Money funds have liquidated all of their record long bets on the upside for Meal. Such pessimism implies that prices are vulnerable to a medium term low during this years growing season.
See below for the current open and pending trades for the KDelta model as well as all closed out trades for 2015 Year To Date (YTD). The pending trades shown below are mostly Sell signals in the Agriculture and Currencies thanks in large part to the strong US Dollar that keeps domestic prices low as cheaper foreign currencies allow lower priced imports to compete for our consumer dollars. Once Europe can reduce the large growth gap in US vs Eurozone GDP’s then this deflationary trend should be neutralized.
Assume a $10,000 opening account & one contract per trade/signal
Legend: Currencies: Australian $=A6, British Pound=B6, Canadian $=C6,New Zealand $=N6, Euro=E6, Yen= J6, Swiss Franc=S6, US Dollar=DX. Ags: Corn= ZC, Wheat=ZW, Soybeans=ZS, Soybean Meal=ZM, Soybean Oil=ZL, Oats=ZO, Wheat=ZW, KC Wheat=KE. Metals: Copper=HG, Gold=GC, Silver=SI, Platinum=PL, Palladium=PA. Stock Indexes: SP 500=ES, Dow/DJIA=YM, Nasdaq=NQ, Mini-Russell 2000=TF. Softs: Cocoa=CC, Coffee=KC, Sugar=SB, Cotton=CT, Orange Juice=OJ, Lumber=LB. Bonds: T-Bonds=ZB, 10 Year Note=ZN, 5 Year Note=ZF. Energies: RB=Unleaded Gasoline; HO=Heating Oil; CL= Crude Oil; QM=mini-Crude Oil
Below: $P/(L)/contract=profit and loss of single contract trade per signal
P/L % margin= profit & loss per trade based upon margin required per contract
Profit/Loss based on $10k account for 2015 YTD
Open positions:
04-09-15 Sell ZMK 314.1 Exit 300.6
04-09-15 Sell NGK 2580 Exit 2421
Pending Signal using Buy or Sell Stops only:
Sell J6M 8200 Exit 7950
Buy N6M 7639
Buy ESM 2110 Exit 2180
Buy ESM 2107.25 Exit 2130
Buy TFM 1269.6 Exit 1279.2
Sell ZSK 928-4
Sell ZMK 292.2
Sell ZLK 29.55 28.07
Sell ZCK 367 Exit 358
Sell CCK 2673
Sell RBK 169.12 Exit 160.54
Buy HOK 181.48
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$ P/(L) P/L
Date Signal Entry Exit date/price Contract %margin
03-30-15 Sell NGK 2619 04-02-15 2718 (990) (23%)
04-02-15 Buy ZWK 540-6 04-07-15 526 (738) (52%)
04-02-15 Buy KEK 579-4 04-07-15 564-4 (250) (18%)
03-31-15 Sell ZOK 265-2 04-01-15 262 162 13%
April results: 1 win & 3 losses P/L=$ (1816)
YTD results=18 wins & 10 losses: P/L = $21,851=218%
03-17-15 Sell ZCK 373-4 03-20-15 377-6 (213) (19%)
03-13-15 Sell D6H 7800 03-18-15 7921 (1210) (66%)
03-10-15 Sell J6H 8218 03-12-15 8272 (675) (21%)
02-12-15 Buy NQH 4342.5 03-10-15 4389.5 940 24%
02-13-15 Buy ESH 2089 03-06-15 2089 0 0
02-26-15 Buy DXH 95.24 03-05-15 96.60 1360 82%
02-26-15 Sell E6H 112.74 03-04-15 111.28 1825 54%
02-26-15 Buy HOJ 19423 03-04-15 18823 (2520) (50%)
March results: 3 wins & 4 losses: P/L= $(493);
YTD=$17W&7L: YTD P/L=$23,667=237%
02-25-15 Buy RBJ 18825 02-27-15 19528 2952 52%
02-25-15 Buy A6H 7860 02-26-15 7830 (300) (12%)
02-24-15 Buy HGK 264.10 02-26-15 270.60 1625 43%
02-17-15 Sell LBK 303.75 02-24-15 292.9 1193 68%
02-18-15 Sell OJK 133 02-23-15 129 600 45%
02-17-15 Sell KCK 161.15 02-19-15 154.20 2606 59%
01-16-15 Sell ZSH 990-6 02-03-15 966-6 1200 44%
February results:6 wins & 1 losses:14W/3L:P/L=$9,876:YTD=$24,160=+242%
01-28-15 Sell QMH 4479 01-29-15 4369 550 20%
01-26-15 Sell S6H 11353 01-29-15 10891 5775 69%
01-22-15 Sell B6H 15026 01-26-15 15053 (169) (9%)
01-13-15 Sell ZMH 336.9 01-20-15 322.2 1470 67%
01-15-15 Sell NQH 4080.5 01-16-15 4101.5 (420) (11%)
01-12-15 Sell HOG 16714 01-13-15 16316 1671 44%
01-12-15 Sell QMG 4682 01-13-15 4545 685 37%
12-15-14 Sell HEG 83.25 01-06-15 78.17 2032 154%
01-02-15 Sell D6H 8544 01-05-15 8472 720 57%
12-30-14 Sell CLG 53.97 01-05-15 50.03 1970 105%
January results: 8 wins & 2 loss: P/L=$14,284= +143% gain on $10k account
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