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.

CURRENCIES & FINANCIALS: 

MAR  MINI JAPANESE YEN:  I tried to buy it today.  It triggered a sell instead and sold off to 129.40!   Its next support is at 129.00 on the daily chart.  Just watching.  Closed 129.67, down .65.

MAR SWISS FRANC:  The earlier buy continues to follow through.  It is clearly over the 20 day ma on the daily chart.  I had pointed out in my last Update that average has been a lid on this market since early November.  Consequently, this change of events, should be positive and I would suspect more rally.  The next major resistance is up at 108.00.  Closed 107.15, up .79.

MAR DOLLAR INDEX:  It closed under the 20 day ma yesterday with follow through today.  From the low made in late October, this correction would reach the fibonacci .382 retracement at approximately 79.450.  So far it has had a .250% retracement.  Before that it has the strong support at 80.000.  Long term on the monthly chart, if it cannot hold 80.000, it will run into the 20 day ma at 78.250 approximately.  The monthly has a buy signal.  The weekly has more than one buy signal.  Closed 80.405, down .417.

MAR MINI EUROCURRENCY:  An inside day Tuesday triggered a buy on Wednesday.  It has followed through and closed over the 20 day ma today on the daily chart.  That is positive.  This is significant as it is the first time it has closed over it since it failed in early November.  The entire sell-off since then to the recent low has been held back by that average - literally.  This develop suggests the potential for more rally.  The key now is 130.00.  That is good resistance.  Rallying to that level would be comparable to the previous rallies since the early November high.  If it fails then, we have seen the rally and we could probably expect new lows.  If it gets through that, this could then be the most extensive rally since November and could reach 132.00 to 133.00.  Closed 129.37, up .97.

MAR CANADIAN DOLLAR:  It triggered a buy today.  It rallied to 99.00 and sold off. That is previous resistance.  The last time it tested that level it got to 99.08.  This time it surpassed that and reached 99.17.  Keep stops at 98.10.  Closed 98.71, up 7.
Position:  Long 99.13 (1.19).
Projection:  99.60.

MAR AUSTRALIAN DOLLAR:  It was stuck within yesterday's range today.  And yesterday's range was pretty narrow.  After making a high on Tuesday at 103.78, it can't seem to get over that price level.  Just watching.  Closed 103.33, down 14.

MAR E-MINI S&P:  It made a new high today at 1311.50.  This is the second day it has closed over 1300.00.  That is positive.  Keep stops at 1281.00. Closed 1310.50, up 8.25.
Position:  Long 1297.50 (1.17).
Projection:  1327.00.

MAR 10 YR. NOTES:  I tried to buy them yesterday.  The price was not reached.  Today they sold off to 130.160.  They closed right on the 20 day ma on the daily chart.  The breakout mentioned previously has not followed through and could be a false breakout.  Just watching.  Closed 130.225, down .180.

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.