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Dave’s Analysis (Mar 1, 2025)

Summary

May Wheat Market Analysis:

President Trump’s 25% tariffs on Mexico and Canada remain scheduled to commence on March 4, 2025, despite some recent discussions and debates around their implementation. This tariff imposition has introduced a significant level of uncertainty into the market, contributing to notable volatility. Over the past nine trading days, May Wheat Futures (ZWK25) have experienced a sharp decline, falling from 621.75 on February 18, 2025, to 555.0 on February 28, 2025.

Analysis:

  • Dominant Market Cycle: Currently, the predominant market cycle spans 12 trading days, with the next cyclical low anticipated on February 28, 2025. This cycle is instrumental in predicting price movements and identifying potential entry points.
  • RSI(2) Indicator: The Relative Strength Index (RSI) with a 2-day period suggests that a short-term low is imminent. This technical indicator is critical in assessing the momentum and identifying potential reversal points in the market.
  • Zero Balance Indicators: My short-term, mid-term, and long-term zero balance indicators are all exhibiting bullish signals. These indicators are designed to measure the equilibrium in price movements and can provide valuable insights into future market direction.
  • Volume Trends: Over the past four trading days, trading volume has decreased alongside declining prices. This trend indicates a reduction in bearish sentiment and could signify the potential for an upward movement as the selling pressure diminishes.
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    Recommendation:

    • Trade Entry: I recommend buying May Chicago Wheat (ZWK25) at a stop price of 566.00. This level is chosen based on technical analysis and market conditions that suggest a favorable entry point.
    • Risk Management: After entering the trade, place a trailing stop loss order with a risk of 10.25 points. This strategy is designed to protect your investment by automatically adjusting the stop loss level as the price moves in your favor, helping to lock in potential profits.
    • Price Confirmation: As always, I require price confirmation before entering the trade to ensure that the market conditions align with the analysis. This step is crucial in mitigating risks and enhancing the probability of a successful trade.

    Additional Resources:

    For more detailed insights and strategies on managing trades after entry, please refer to my trading philosophy for futures available on this website. This resource provides comprehensive guidelines and techniques to help you navigate the complexities of futures trading effectively.

    Happy Trading, Dave Register CTA

About the Author

Dave Register is ExitPoint’s primary developer and creator of the original ExitPoints systems. With a masters in both Physics and Statistics, over 50 years of experience in management information systems and designing AI systems to accurately predict futures market trading, Dave is a respected member of the trading community. His passion for predicting market trends is both personal and professional, a primary interest that he enjoys sharing with others.

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Risk Disclosure:

Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading and onlythose with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.

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Hypothetical Performance Disclosure:

Hypothetical performance results have many inherent limitations, some of which are described below. no representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. for example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all which can adversely affect trading results.

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