MARKET UPDATE
JUDY CRAWFORD
(TRADES FOR FRIDAY, SEPT. 3, 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.
HOLIDAY SCHEDULE: On Friday globex markets close at 3:15 versus standard 4:00. Most will open regular time on Sunday but close early on Monday between 12:00 (currencies & financials) and 12:15 (metals & energies). Bear in mind, the exchanges may change this at a moment's notice. I will not be in the office on Monday.
THE DOLLAR? It is again calling the shots with the currencies. Its huge sell-off yesterday produced aggressive rallies in the eurofx, the aussie and the canadian. It did the same in the yen and swiss but they could not hold it. Bear in mind, those two markets have been in strong uptrends and could be a bit overdone to begin with. The other three had started sell-offs with follow through but the Dollar's slide yesterday turned them around faster than a blink of an eye. That should tell you that if and when the Dollar holds and starts to rally (see Dollar comment below), it won't take a rocket scientist to figure out what those three currencies will do. The Dollar is pretty much calling the shots again but not like it did earlier this year. Its influence on other markets does not seem as strong.
Either way, the markets are again acting like they are waiting for "something" to give them direction. The follow through is limited before they start the other way. This is typical as markets struggle prior to a trend change. The end result of this should be strong trends once again.
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TRADE ALERTS:
Important information regarding placement of trade alert orders:
1. They are placed during the day only (and not at night). All trades are placed in the electronic markets 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 September bonds. Sell 133.09 stop. Protective stop 135.04. Potential projection 129.00. High risk trade.
Reasons for the Trade:
1. On the monthly chart, bonds are finally suggesting a top as they sell off from a previous resistance area.
2. On the monthly and weekly charts, the macd is turning down.
3. The weekly chart formed a key reversal top last week. It is being confirmed so far this week.
4. On the daily chart a sell signal would push bonds under the 20 day ma for the first time since July.
5. A sell signal would negate an interim key reversal bottom formed August 30.
6. On the daily chart the macd is negative.
7. The daily chart has a key reversal top that is still intact.
METALS COMMENTS:
DEC COPPER: In the last Update it had been selling off since getting over the 20 day ma. It now appears it was testing that breakout over that average. One it got near it, it turned around and has now reached the 350.00 resistance. Getting over that gives it potential to try for 380.00 resistance. Closed 349.55, up 1.80.
DEC MINI GOLD: Its high in June was 1266.50. As mentioned last time, there isn't much to stop it until 1260 - 1270. It triggered another buy yesterday and then formed a key reversal. Closed 1353.40, up 5.30.
DEC MINI SILVER: It appears headed for 20.000. The high for Dec. silver in May was 19.915. That is the area to watch. The weekly chart triggered a preliminary buy this week. Closed 19.672, up .279.
ENERGY, CURRENCIES & BONDS:
OCT MINI CRUDE OIL: I lowered the stop yesterday and it was reached with a profit. It continued to rally to 74.48 as a high. This is a good example of how a market started to follow through quite well from the sell signal, only to turn right around the next day and go beyond the entry point. It triggered a buy today from yesterday's inside day. The key right now for crude is to get over the 20 day ma that intersects at 75.55 approximately. Today's high 75.140. Closed 75.02, up 1.11.
Position: Short 73.825 (8.31). Exit 73.225 (9.1). Profit $545 (-comm&fees).
SEPT MINI JAPANESE YEN: Yesterday it attempted to reach the contract high made last month at 119.66. It reached 119.55 and then sold off, forming a key reversal top to the recent rally. Bear in mind this is starting to push into resistance formed in 1995 around 120.00. However, the historic high is up at 126.25 made in April 1995. Either way, the yen is still in an uptrend and the long term potential for the current uptrend is 124.55. It is struggling at this current level. Just watching. Closed 118.74, up .35.
SEPT SWISS FRANC: Long term it still appears headed for 100.00 at least. It will run into major resistance there. In 2008 it did spike up to 104.00 but it was short lived. On the daily chart it got over 98.00 resistance on Monday and has held it since. Between 98.00 and 100.00 the market did a lot of consolidating in October and November of last year. It will need to push through that, if it can. Just watching. Closed
SEPT DOLLAR INDEX: Yesterday the Dollar dropped like a rock, so to speak. The buy signal mentioned last time was negated. Near term it could have more selling off to do. Considering the extent of the selling yesterday, there should have been more follow through today. On the daily chart it is struggling at the 20 day ma. It needs to hold at the 82.000 support. If it cannot, expect more sell-off into the 81.000 support. Long term the key reversal bottom held through the month of August. That is positive. Right now the 20 day ma intersects down at 81.20 on the monthly so that could be the extent of this sell-off. There is no way to know at this point. Either way, long term the Dollar continues to suggest the start of a major uptrend. Closed 82.501, down .048.
SEPT MINI EUROCURRENCY: The recent rally was stopped by the 20 day ma both yesterday and today. That's the negative. The positive is that it is over the 128.000 resistance. I have mentioned before that the rallies since the high in early August have been pathetic at best. This has been the most extensive one to date. Technically nothing has changed long term and the fx is still in a downtrend. The weekly does suggest more of a rally as long as it can hold above the 20 day ma. That it is attempting to do this week. That average intersects at approximately 127.000. Closed 128.120, up 16.
SEPT CANADIAN DOLLAR: After the new low mentioned in the Tuesday Update, it immediately rallied back to the previous high area mentioned (95.46). Today the 20 day ma put a damper on the rally. Long term the market is in support and could rally but it still looks like it is making a major "rollover" to the downside on the long term charts. Closed 94.80, down 21.
SEPT AUSTRALIAN DOLLAR: Stops were reached yesterday. It rallied out of the down trend formed since the high in early August. It is over the 90.00 resistance. Long term the market continues to be topping. Closed 90.99, up .27.
Position: Short 88.62 (8.31). Exit 90.21 (9.1). Loss $1645 (+comm.&fees).
SEPT BONDS: This market if starting to build some negative slant for a change. Near term they are now back down in the support they have established since August. They keep running into trouble in the mid 136.00 level and end up down at the low 134.00 level. That is where they are today. That suggests to me that they could be forming a top. A trade could be developing. See Trade Alert for details. Closed 133.30, down .21.
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.
