MARKET UPDATE
JUDY CRAWFORD
(TRADES FOR FRIDAY, JANUARY 20, 2012)
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.

THE MAJOR PLAYERS.
The trading world has revolved around the eurocurrency and the dollar for the obvious reasons - the ongoing mess across the pond and here.  As many traders have pointed out to me, they feel like they are trading the dollar no matter what market they are in.  That's pretty close to the truth.  When the dollar goes up, most other markets go down and vice versa.  The fundamentals of the individual commodities seemed overwhelmed by the economic problems of the world.
Since late October the eurocurrency has been in a consistent slide south as the dollar has been in a consistent rally.  The current wave down in the eurofx has far exceeded the previous one.  A bit oversold?  Could be and maybe that is what the daily chart is suggesting when it closed over the 20 day ma today.  I point that out because that is exactly how the previous wave down ended - the day the eurofx managed to close back over the 20 day ma on the daily chart on Oct. 10.  I suspect today's action could be a red flag for similar action.  If so, and if this potential rally matches the last one, the eurofx could try for 136.00.  Of course, to get there it has many hurtles to deal with as outlined below in the eurocurrency comments.

Likewise, it is no surprise that the opposite occurred with the dollar.  Its previous rally ended when it failed to hold the 20 day ma.  That correction went on for most of October.  When the dollar managed to close back over the 20 day ma, that sell-off ended.  If the dollar is going to correct from this level and it matches the one seen in October, the dollar could test 78.000 to even 77.000.
What does all this mean?  If this occurs do not be surprised to see strong rallies in most of the other commodities.  Many are already suggesting that potential.  
Of course, all this hinges on what happens in euroland.  Rumors are saying that Greece will not be able to pay back the upcoming loan due.  And Germany.  When will they have had enough?  Bottom line, there are plenty of wild cards floating around but if you just look at the charts and what they did before, they are beginning to suggest some decent rallies.  Time will tell.

                "EMOTION is your enemy more than any market will ever be."

GOAL OF THE MARKET UPDATE: The purpose of my Update is to share with readers what the technical aspects of a market is suggesting.  It is not my personal opinion but merely conveying to readers what market action potentially suggests drawn from my years of experience with the markets and what similar behavior in the past has produced.  I do for you the technical analysis that most of you do not have the time to do personally. 
The Update is also designed to help you learn what to look for in a market technically and to develop good trading habits irrespective of the results of a particular trade. It is also a guide and tool for those who want to compare it with their own work.

TO RECEIVE THE COMPLETE MARKET UPDATE: Your access to the Update through Internet websites is not the complete Update. It does not include comments on alternate days (Monday, Wednesday & Friday) or not necessarily all the markets followed. To receive the complete Update via email, you may register for it on my website.  I also offer free trading booklets:  http://www.tradingfuturesmarkets.com/.

OTHER SERVICES AVAILABLE TO YOU: In addition to my advisory service I also offer brokerage services. My commission rates vary according to the services you want from me.  My clients range from self directed to full service. The Market Update is free to all clients.

MY TRADING APPROACH: I normally enter trades only on buy and sell stops. If the market is not going in the direction of the trade, I am normally not interested and the order is not executed.
I do not enter new positions during the night session but only during the day trading hours. I always use globex and always have a protective stop working - even during the night session.  My computation of trading costs for each trade in the Update includes commission plus an estimate of exchange fees.

TRADE ALERTS:  None for Friday.

GRAIN COMMENTS:  

MAR CORN:   It triggered a sell yesterday and has not followed through.  It closed back over 600 today.  That is of concern.  Keep stops at 612.
Position:  Short 596 (1.18).
Projection:  550.

MAR MINI WHEAT:  Like corn, it is back over the 600 support today.  Other than that the weekly is still very negative. The last time it rallied, the rally totaled 25 cents only.  If this rally equals that, it could go to 615 but the real resistance is 625.  Just watching.  Closed 605 3/4, up 13 1/2.

MAR MINI BEANS:  I tried to short them but the price was not reached.  They triggered a buy instead and reached 1197 1/2 today.  That is where the 20 day ma intersects on the daily chart.  Also, that is getting pretty close to the 1200 resistance area.  Just watching.  Closed 1197, up 13 1/2.

MAR MEAL:  The buy mentioned last time has continued to follow through.  Today's high 316.00.  It is now over the 20 day ma and that suggests the potential for meal to reach 320.00 near term.  Just watching.  Closed 315.70, up 3.70.

MAR BEAN OIL:  It triggered a sell yesterday on the daily chart but there has not been any follow through.  The monthly has a buy but is still trading under the 20 day ma.  This market could be a toss up.  Just watching.  Closed 51.06, up .66.

MEAT COMMENTS: 

FEB HOGS:  They tried to rally over the 86.25 resistance.  It did not work.  They sold off today to 85.27.  Technically the daily chart made a low at 82.62 on Dec. 16.  They rallied and then tested that low stopping at 82.77.  They then started to rally again - suggesting the start of a second wave up.  That wave took out the high of the first rally - further confirming a second wave up and a potential bottom.  So is this sell-off that started today just a minor correction to this second wave up or is it more?  We don't know.  Starting at 85.00 it has good support and even more down at 84.50.  It is a wait and see as to how the market reacts.  Closed 85.40, down .87.

FEB CATTLE:  They rallied today and got over the 123.75 resistance.  Today's high 124.75.  The next resistance is 125.00.  Long term this rally negated the sell on the weekly chart.  To negate the sell on the monthly will require cattle taking out 125.37.  They don't have far to go.  Just watching.  Closed 124.20, up .97.

SOFTS: 

MAR COTTON:  An inside day yesterday triggered another buy today.  Cotton has closed over the 100 day ma on the daily chart for the last three days.  That is positive.  The real challenge now is 100.00.  There is a lot of market resistance at that level and a little under it plus the 150 day ma intersects at 99.21.  On the monthly it is over the 20 day ma and is trying to get over the 150 day ma.  In short, cotton is now pushing into a tough area.  Watching closely.  Closed 98.17, up .64.

MAR ORANGE JUICE:  It triggered a buy yesterday with follow through today.  It closed over 200.00.  If this rally can follow through, OJ should reach 210.00 at least.  It is very close to the 2007 high of 209.50.  Closed 200.65, up 9.45.

MAR COFFEE:  An inside day yesterday triggered a buy today.  There was not follow through - at least not yet.  It is trying again to get back into that descending triangle.  I am concerned that coffee has spent too much time trying to negate that breakout to the downside from that triangle.  That makes me suspect there will be more rally near term.  Prefer to just watch.  Closed 226.65, up 1.80.

MAR COCOA:  The gap formed when it triggered a sell earlier this week was filled today.  It is not giving any indication yet if it is starting another wave up instead.  If that be the case, the earlier high at 23.88 would be taken out.  Just watching.  Closed 23.20, up 55.

MAR SUGAR:  It triggered a buy today and rallied to 24.88. It took out the high of Jan. 4.  That is positive.  As mentioned before, the open interest has been building for well over a month.  If this breakout can follow through, the rally could be a good one.  Keep stops at 23.84.  Closed 24.61, up .61.
Position:  Long 24.42 (1.19).
Projection:  25.50.

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.