MARKET UPDATE : December 2, 2011

To follow up with my comment yesterday regarding several central banks making more dollars available to european banks, as suspected the response was a short lived, knee jerk reaction in the market place. 

The markets are pretty much insinuating today that the influx of dollars didn't solve anything.  It probably gave some banks some "breathing room" but beyond that, nothing to write home about.  The underlying problem, the "beyond belief" debt in euroland hasn't even begun to be resolved.  Of course there is our massive debt too but all eyes are on europe currently. 

Because of this move by the central banks and the reaction of the markets it has caused a lot of conflict on the charts.  Consequently I did not see much in the way of trades for tomorrow.  Bottom line most markets are in a bear mode but could still try to rally.  If they do it should just set up selling opportunities at a later date.

GRAIN DIRECTION? 

In reviewing all the charts on the grains it appears that there is a 50/50 chance that they may try to rally.  If so, I don't see it lasting very long considering all the negatives and the way they have been trading.  Technically they are all in trouble so I have to lend towards the sell-off resuming.  If they do rally it should be an opportunity to short higher up.
 
THE MARKET UPDATE is designed to help you combat emotion.  How?  It is designed to not only help you learn how to trade but also to develop discipline.  That is only achieved through a structured approach to trading.   By my reviewing technically all the major markets helps you obtain knowledge of the markets.  By my giving structured trade suggestions helps you see what discipline and a consistent trading habit requires.  Knowledge, discipline and habit help minimize emotion.  Also by including 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, you can simply use my guidelines for placing your own trades.

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Sell January bean oil.  Sell 49.07 stop.  Protective sotp 50.12.  Potential projection 45.00.
Reasons for the Trade:
1.  On the monthly chart bean oil closed under the 20 day ma last month.  It is currently trading under it.
2.  The monthly has a previous sell signal that is still intact.
3.  The weekly chart is in a downtrend.
4.  On the weekly chart bean oil sold off and closed under the major 50.00 support last week.  That is negative.
5.  On the daily chart bean oil has attempted to rally over the 50.00 resistance for three days without success.
6.  The daily chart has a previous sell signal that is still intact.
7.  On the daily chart the current wave down has not met projections.
8.  Today was an inside day that can trigger a signal and market direction.

Sell December mini yen.  Sell 128.450 stop.  Protective stop 129.150.  Potential projection 126.000.
Reasons for the Trade:
1.  The monthly chart formed a key reversal top in October.
2.  The weekly chart has a key reversal top.
3.  The weekly failed the 20 day ma last week and is trading under it this week.
4.  The macd is negative on all three charts.
5.  The daily chart has a previous sell signal that is still intact.
6.  On the daily chart the yen failed both the 20 and 100 day ma last week.
7.  Today was an inside day that can trigger a signal and market direction.

Sell December mini eurocurrency.  Sell 134.090 stop.  Protective stop 135.270.  Potential projection 130.000.
Reasons for the Trade:
1.  The monthly chart has a previous sell signal that is still intact.
2.  On the monthly the fx is trading under the 20 day ma.
3.  Both the monthly and the weekly are in a downtrend.
4.  On the weekly the fx has sold off under both the 100 and 150 day ma two weeks ago.
5.  The weekly chart has a previous sell signal.
6.  The daily has a previous sell signal.
7.  Today was an inside day that can trigger a signal and market direction.

GRAIN COMMENTS:   Switching to March contracts where appropriate.

MAR CORN:  It continues to hold to the 20 day ma on the monthly chart and is trying to hold above 600.  Even if it can manage a rally from this level it will hit heavy resistance around 636 up to 650.  As mentioned before it still hasn't taken out the low made in early October.  It is the only grain that has not.  Just watching.  Closed 601 1/2, down 6 1/2.

MAR MINI WHEAT:  Stops were reached yesterday on the Dec. contract.  On the monthly chart it has been trading under the 20 day for four months now.  On the weekly it is trying to get back over the 150 day ma.  Either way it is in a downtrend but on the weekly chart this wave down has met potential projections.  Just watching.  Closed 602, up 6 1/4.
Position:  Short 582 1/4 (11.23).  Exit 603 (12.1).  Loss $262.50 (+comm/fees).
Projection:  500.

JAN MINI BEANS:  Stops were reached yesterday.  They are trying to get back over the 150 day ma on the weekly.  They closed under it last month.  On the daily chart the current wave down has not met projections.  Same on the weekly.  It has a projection of 1000.  Also based on the huge top formation that beans formed during most of the year, it has projections down to 900.
Position:  Short 1181 1/2 (11.17).  Exit 1141 1/2 (12.1).  Profit $345 (-comm/fees).

JAN MEAL:  It is in some support long term going back to May of 2010.  There is a potential for a rally to 300.00.  Overall the weekly chart is still very negative even though it could rally because of that support.  Normally when a market reaches a previous support for the first time again, it reacts and rallies off of it.  The opposite if it is resistance.  My concern, considering the overall bearish tone, is how far the rally can go.  Just watching.  Closed 289.00, down 3.20.
 
JAN BEAN OIL:  Switching to January.  It failed the 20 day ma on the monthly chart last month and closed under it.  On the weekly it is attempting to hold at the 100 day ma.  A trade could be developing.  See Trade Alert for details.  49.70, up .20.


MEAT COMMENTS:
 
FEB HOGS:  Today's sell-off pretty much confirmed that yesterday's rally was in sympathy with what was going on market wide and not much more.  Yesterday hogs tried again to reach 92.50 without success.  Today they sold off to 90.25.  In early November they violated the 100 and 150 day ma on the daily chart but managed to rally back over it.  Possibly this time they will fail with more follow through.  Waiting for the right setup to short.  Closed 90.27, down 1.30.
 
FEB CATTLE:  I tried to short them yesterday.  They rallied instead.  They tried again today to rally but are struggling at the 123.75 resistance.  They came close to closing over it today but could not pull it off.  The 20 day ma intersects at approximately 123.50 and that is causing problems too.  Long term the monthly chart is not showing much except that when it gets around 122.00 to 123.00 it can't sustain it.  The weekly chart has a sell signal.  Just watching.  Closed 123.72, up .12.
 
SOFTS:
 
MAR COTTON:  It is doing everything in its power to try to hold above 90.00.  I doubt it will last.  Long term its next support is around 82.00 to 83.00.  The weekly triggered a sell last week when it failed to hold the 150 day ma.  Even if it rallies the odds of it getting over 100.00 are pretty low.  Why?  Both the 20 and 150 day ma merge in that area.  Plus it has technical resistance going back to July from market activity in the same area.  That is a lot to plow through.  Just watching.  Closed 91.30, up .39.
 
JAN ORANGE JUICE:  It continues to have a problem with 180.00 resistance. This has been going on for over a week.  This market could go either way.  Just watching.  Closed 177.25, up 1.15.
 
MAR COFFEE:  It is still trading within the "descending triangle."  It is struggling to get back over the 20 day ma and did close over it both yesterday and today.  But the follow through has not been there yet.  Just watching.  Closed 235.70, down 1.20.
 
MAR COCOA:  The weekly chart is triggering another sell this week and continues to look headed towards 22.00.  Move stops from 24.40 down to 23.27.  Closed 22.87, down .18.
Position:  Short 23.71 (11.28).
Projection:  22.00.

MAR SUGAR:  A huge outside day on Monday triggered a buy yesterday.  It almost reached the 24.00 resistance continues to back off.  On the weekly chart it has continued to try to hold at the 150 day ma both last week and this week.  The monthly, however, failed and closed under the 20 day ma last week.  It has continued to trade under it this week.  Just watching.  Closed 23.59, down .10.

METALS COMMENTS:

MAR COPPER:  The market rallied aggressively along with the rest yesterday.  It closed over the 350.00 resistance.  That is positive.  It is now having trouble getting over the 360.00 resistance area.  Just looking at the chart it still appears to have a potential to 390.00.  Closed 353.40, down 4.15.
 
FEB MINI GOLD:  It rallied to the 1750.00 resistance and is backing off.  The 20 day ma also intersects at that level on the daily chart.  It needs to get over that resistance.  Just watching.  Closed 1739.80, down 10.50.
 
MAR MINI SILVER:  I tried to short it yesterday.  It reached the price at night only.  It formed a huge outside and that triggered a buy today.  It rallied up to the 20 day ma and stopped.  Just watching.  Closed 32.759, down .045.
 
ENERGY, CURRENCIES, FINANCIALS:
 
JAN MINI CRUDE OIL:  The daily chart looks very bearish.  It has violated the uptrend formed since the October low.  It has a key reversal top.  It has the potential to form a 1,2,3 top formation.  And it continues to struggle at the 100.00 price level.  But the monthly triggered a buy last month.  Just watching.  Closed 100.20, down .16.
 
DEC MINI JAPANESE YEN:  Stops were reached yesterday.  It rallied up to the 20 day ma both yesterday and today and stopped.  A trade could be developing.  See Trade Alert for details.
Position:  Short 129.270 (11.23).  Exit 128.930 (12.1).  Profit $157.50 (-comm/fees).
Projection:  125.000.
 
DEC SWISS FRANC:  It continues to consolidate between 108.00 and 110.00.  It does have a buy signal but getting over 110.00 has been a problem.  It also has the 20 day ma to deal with at that same level.  Closed 109.12, down .44.
 
DEC DOLLAR INDEX:  Stops were reached yesterday.  It continues to hold the 78.000 support.  That is good.   I would like to see a better set up on the long term charts before I suggest a buy again.  Closed 78.433, down .058.
Position:  Long 78.920 (11.23).  Exit 78.680 (12.1).  Loss $295 (+comm/fees).
Projection:  80.000
 
DEC MINI EUROCURRENCY:  I tried to short it yesterday.  It reached the price at night only.  I'll try again tomorrow.  See Trade Alert for details.  Closed 134.56, up .20.

DEC CANADIAN DOLLAR:  On the daily chart it appears to be starting a new wave up.  It could test the 100.00 level.  It will run into the 100 day ma there plus that is previous resistance going back to at least August.  It closed back over the 98.00 support yesterday and held it today.  Closed 98.52, up .51.
 
DEC AUSTRALIAN DOLLAR:  It rallied and reached the 100 and 150 day ma on the daily chart yesterday.  That stopped the rally.  Just watching.  Closed 102.20, down .19.
 
DEC E-MINI S&P: Yesterday it rallied over both the 100 and 150 day ma.  It barely closed over the 150 day ma and struggled there today.  It also has heavy resistance at 1250.00.  Closed 1243.50, down 2.50.
 
DEC 10 YR. NOTES:  Still in the same range between 129.250 and 131.000.  They are now at the low end.  Closed 129.315, down .055.