MARKET UPDATE
JUDY CRAWFORD
(TRADES FOR WEDNESDAY, SEPT. 1, 2010)
888-301-8120
jcrawford@zaner.com
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.
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Sell October sugar. Sell 19.45 stop. Protective stop 20.26. Potential projection 18.00.
Reasons for the Trade:
1. Both the monthly and weekly charts are in resistance.
2. The weekly macd is turning negative.
3. The daily chart formed a key reversal top on the 25th that is still intact.
4. On the daily chart, sugar has been at the 20.00 resistance for over a week but cannot get over it with follow through.
5. On the daily chart, the macd is negative.
6. A sell signal would negate a buy signal triggered today. Normally when a market does so that quickly, it follows through in the new direction.
GRAIN COMMENTS:
DEC CORN: After selling off in the night session to 432, it then rallied and came within a half cent to the previous high (445 1/4). Today's high 444 3/4. On the monthly chart corn has taken out the high made in January (which ended the first wave up since contract lows last year). Technically doing so confirms a second wave up from that contract low. Even though it made the year's low in September last year, it ended the month up 45 cents higher and closed on the high of that month's range. It continued to rally (with corrections, of course) until it topped in January of this year. The current wave up has projections to 460 basis the September contract. That's another 36 cents added to the current close in December - if corn follows through. That translates to 475 December corn if this wave follows through. Closed 439 1/4, down 2 1/4.
DEC WHEAT: I have been referring to a third small wave down in the wheat recently but that it needed to take out the low made on the 18th (677 1/2). It has been rallying instead recently but the 20 day ma has been a problem. Yesterday's high was stopped buy it and today it is selling off again as follow through. If this third wave can follow through, wheat could sell off to 650. With the daily macd looking down, I suspect that will occur. Closed 685 3/4, down 18 3/4.
NOV BEANS: They rallied over their 20 day ma on Friday and the 1025 resistance. It was a short romance. They formed a key reversal top yesterday and have followed through in the sell-off today. Today's low 1006 3/4. Bottom line this could be the set up for a third wave down. If so, they need to get under 1000 first but the number to watch is the last low at 993 1/2. If that is taken out, that should confirm the third wave down. The next support is 975. Closed 1010, down 12 1/2.
DEC MEAL: It triggered a buy on Friday. I raised the stop to 294.90 as it is setting up a potential head and shoulders top. This became evident with yesterday's key reversal top. Today's sell-off violated the 20 day ma but did close on it. Stops were reached. It really needs to close over 300.00 with follow through. It is in an uptrend and nothing has changed to question that, so far. Closed 295.20, down 3.50.
Position: Long 298.10 (8.27). Exit 294.90 (8.31). Loss $375.
DEC BEAN OIL: It triggered a buy on Friday. It rallied to 41.10 yesterday and formed a key reversal top. It is back down at the 40.00 support area. Move stops from 39.45 up to 39.85. Closed 40.05, down .48.
Position: Long 40.35 (8.27).
Projection: 42.50.
MEAT COMMENTS:
DEC HOGS: Stops were lowered to 73.25 as yesterday was an inside day. The stop was right above that high. It was reached this morning. The macd suggests further rally so if they do, it should be an opportunity to short again.
Position: Short 73.87 (8.20). Exit 73.27 (8.31). Profit $185 (-comm&fees).
DEC CATTLE: They triggered a sell on Friday. Since the double top last week, they have done nothing but trade in a very narrow range between 100.00 approximately and 100.97. They are building up for a move, and if they do following through with the sell and get back under 100.00, they should have a good sell-off. Their low today was 99.90. Keep stops at 101.27. Closed 100.05, down .60.
Position: Short 99.77 (8.27).
Projection: 97.00.
SOFTS:
DEC COTTON: In my last report it looked headed for 90.00 (basis the October contract). That contract reached 90.34 today. Strangely, on the daily chart, the macd is not responding to the current strength in the market. It is going sideways. On the daily chart, the current wave up in December has exceeded projections - suggesting an over bought market. Just watching. Closed 86.20, down .23.
NOV ORANGE JUICE: Last time I said it needs to get under 135.00 in order to follow through in a down move on the daily chart. So far that hasn't happened and 135.00 is support. It has rallied and is attempting to get over the 20 day ma as of today. This potential rally could reach 145.00. That doesn't change the overall situation and down trend. That would be an area to consider shorting. Closed 140.40, up .05.
DEC COFFEE: It is setting up several negative indicators. The recent rally appears to be a test of the contract high that has failed (1,2,3, top formation) and today was an inside day on the daily chart. The margin on this market is now over $7000 and to suggest a trade would be a risk of well over $2000. Either way I see this market selling off. Closed 178.45, down 2.95.
DEC COCOA: Based on the weekly and daily charts (that are forming key reversal bottoms) cocoa may be due for a rally. The daily is trying to hold at support formed in 2009. It is the monthly chart that does not look good at all. It sure looks like cocoa is headed for 25.00. That suggests to me if cocoa rallies, it's an opportunity to short. Closed 27.36, up .22.
OCT SUGAR: I've attempted to short it as it could not get through the 20.00 resistance. It tried for that resistance again today so my price was not reached. Fundamentally there will be a sugar surplus for the first time in two years due to increased production by India. I'll try again tomorrow. See Trade Alert for details. Closed 19.75, down .06.
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.
