MARKET UPDATE
JUDY CRAWFORD
(TRADES FOR FRIDAY, MARCH 12, 2010)
888-301-8120
jcrawford@zaner.com
The Market Update is designed to not only help you learn how to trade but also improve your trading approach. By reviewing technically all the major markets as well as give trade suggestions that include the reasons for the trades, you are able to follow and/or compare my work with yours. Or, if you do not have the time, as many don't, simply use my guidelines for placing your own trades.
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TRADE ALERTS:
Important information regarding placement of trade alert orders:
1. They are placed for the day session only.
2. They are placed on a buy stop or sell stop basis. That means the market must rally up to the stop price to go long and/or sell off down to the stop price to short.
3. All orders are good for that day only.
Sell June hogs. Sell 79.65 stop. Protective stop 81.15. Potential projection 77.50.
Reasons for the Trade:
1. Both the monthly and weekly charts are in resistance.
2. On the daily chart, hogs violated the uptrend formed since the Feb. 1 low today. That suggests a near term trend change from up to down.
3. On the daily chart, hogs violated the 20 day ma today. That is negative.
4. On the daily chart, hogs closed under the 80.00 support today.
5. Today was an outside day that can trigger a signal and market direction.
GRAIN COMMENTS: All the grains made lows in early February at important support levels and then rallied - all at the same time. Then beans and meal peaked in late February and started to sell off. Corn and wheat soon followed when they peaked on March 1 and started to sell off. Beal oil ignored all this and kept rallying and/or consolidating. Since meal and wheat peaked, they have now taken out their lows made in early February. Not a good sign technically. This is what concerns me about this scenario: Since the grains are tending to follow each other, will corn and beans be the next to take out their Feb. lows? And how will they do this? Both have some decent support under them. Wheat and meal had none. Will that support help corn and beans to rally first? Also, if all the grains are headed lower, what about bean oil? It has been moving along blissfully unaware of what has been going on elsewhere??? Yesterday it rallied to 41.00 resistance. Finally today it is starting to sell off. One has to ask, "is bean oil the best short among the grains?" In terms of the other grains, it is where the other ones were around March 1. Food for thought. No pun intended.
MAY CORN: It continued to drift lower today. It failed to hold the 370 support and is now looking at the 360 support area on the daily chart. That is where it held in early Feb. Today's low 361 1/2. That price level is deep into support formed in mid 2009. That could hold the market near term. Move stops from 371 1/4 down to 367. Closed 365 1/4, down 1/4. Position: Short 374 1/4 (3.8). Projection: 325.
MAY WHEAT: It has taken out the low it formed in early Feb. That is not good technically as it confirms the start of a third wave down since the high made in mid November. There is minor support at 475 that it held last October. It may try to rally from that level. Today's low 475 1/2. Closed 478 3/4, down 2 3/4.
MAY MINI BEANS: Last time I pointed out that they appeared headed for 925. Since Tuesday, they rallied to 946 and closed over the 20 day ma yesterday. That didn't last even 24 hours. Today they collapsed and made a low at 929. Closed 930 1/2, down 27 1/2.
MAY MEAL: My earlier projection down to 240.00 is still a strong possibility. Meal has failed major support at 260.00 and cannot seem to come up for air. It held that level in early February but took it out last week. Attempts to get back over it failed miserably. Today's low 251.20. Closed 252.60, down 6.60.
MAY BEAN OIL: Long term it looks very constructive but if the pressure continues in the other grains, I can't see it holding. It reached the 41.00 resistance and has been selling off. It if cannot hold 40.00 support, be prepared for a more extensive sell-off. Closed 40.11, down 91.
MEAT COMMENTS:
JUNE HOGS: A trade could be developing. See Trade Alert for details. Closed 80.20, down .45.
APRIL CATTLE: Long term they are pushing into resistance. As pointed out before the uptrend in cattle should have more to it. However, it did break out of a major consolidation long term to produce this. It is normal to go back and test that breakout. Considering that they are now in resistance, a sell-off to test that breakout from this level is not unreasonable. Looking at the big picture, the consolidation they formed could eventually push them up to 100.00. A sell-off would be an opportunity to buy. Closed 93.82, down .05.
SOFTS:
MAY COTTON: Today it violated and closed under the 20 day ma for the first time since early Feb. It is also under the 80.00 support. Unless something dramatic happens, the monthly chart is forming a key reversal top. This all suggests lower prices for cotton and a major top in the making. The first real significant support is down at 77.00. Closed 78.77, down 1.44.
MAY ORANGE JUICE: The day after the neutral report, it started to rally today. It is still stuck in the same range that has been in since late December. If it can break out to the upside, the potential projection for the next wave up would be 161.00. Long term resistance is at 160.00 so possibly that will finally stop the market and produce a major sell-off. Just watching. Closed 149.80, up 2.85.
MAY COFFEE: I tried to short it today. It triggered a buy instead but the follow through has not been there yet. It did close over the 20 day ma and that is positive. Just watching. Closed 133.75, up 1.00.
MAY COCOA: An outside day yesterday triggered a buy today - just barely. Yesterday was also a key reversal bottom with a new low at 27.54. If the buy can follow through, it could reach 29.00 near term. Just watching. Closed 28.54, up .10.
MAY SUGAR: It made a new low yesterday at 18.82. It does have some support at 18.50. Long term there is better support at 18.00. That is also where the 20 day ma intersects on the monthly chart. It is getting oversold. A rally to the 21.00 resistance would be an opportunity to short. Closed 19.27, down .42.
Trading commodity futures and options involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge and financial resources. Opinions are subject to change at any time and are not a solicitation or recommendation to buy or sell futures contracts or options on futures contracts. The information contained in this message has been obtained from sources believed to be reliable but is not guaranteed as to its accuracy or completeness. All known news and events have already been factored into the price of the underlying commodities discussed.
Past performance is not indicative of future results. All suggested trades are based on technical signals/indicators and do not include slippage or cost. Not all trades suggested are taken. Results are based on what the signal indicates not necessarily an actual trade.
Actual results may vary.
