Market Update: Futures

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 trend is your friend as the saying goes.  But lately the trend has been to no where.  Many markets have stalled out and are consolidating instead of following through with the sell-offs they started after some pretty good rallies.  In some markets it has been going on for weeks now.  They start to breakout and then stop.  Back and forth.  Back and forth.

There are exceptions.  Crude for one, OJ, Gold, S&P.  
It is almost as if the markets are waiting for something.  Most likely the euroland debacle that seems to go on forever.  It is to the point of becoming a little worn around the edges.  It has worn out its welcome and it seems they will bicker and kick the can down the road some more.  Consequently, the markets don't know where to go.  They need news and new news.  And that could come from China.  The rumblings I am hearing are not good about their economy.  There is talk of a housing bubble there much like what the U.S. went through.  All of this could have a very negative ripple affect on the world economies.

 

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

 
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.

Sell December Meal.  Sell 306.10 stop.  Protective stop 314.50.  Potential projection 290.00.
Reasons for the Trade:
1.  On the monthly chart meal sold off under the 20 day ma three months ago.  Attempts to rally over it continue to fail.
2.  The weekly chart triggered a sell last week.
3.  On the weekly chart, meal sold off under both the 100 and 150 day ma several weeks ago.  Attempts to rally back over them have failed.
4.  The daily failed to hold at the 310.00 support.
5.  On the daily chart meal triggered a sell two days ago.
6.  On the daily chart meal sold off under the 20 day ma last week.  An attempt to rally over it failed.
 
Sell December AUD.  Sell 102.29 stop.  Protective stop 103.57.  Potential projection 100.00.
Reasons for the Trade:
1.  The monthly has a double top.
2.  The weekly has been in a downtrend since the July high.  It appears to be starting a third wave down.
3.  The daily chart has two previous sell signals that are still intact.
4.  On the daily chart a sell would push the aussie under both the 20, 100 and 150 day ma.
5.  The daily is in resistance.
6.  Today was an inside day that can trigger a signal and market direction.
GRAIN COMMENTS:  

DEC CORN:  I tried to short it.  It rallied instead and had the highest close so far today since attempting to get over 650.  Today's high 664.  On Oct. 21 it got to 665 1/2 and then sold off to close the day under 650.  Today it closed above 650 and it is the highest close so far since it has been trying to get over 650.  Just watching.  Closed 660 1/2, up 7 1/4.

DEC MINI WHEAT:  I went long today at 644 1/2.  It rallied to 659 1/4.  Keep stops at 622 3/4.  Closed 657, up 18 1/4.
Position:  Long 644 1/2 (11.8).
Projection:  700.

JAN MINI BEANS:  They triggered a sell yesterday and sold off to 1198.  Today was an inside day.  I lowered the stop down to 1217 3/4 from 1231 3/4.  Closed 1205, up 3 1/4.
Position:  Short 1217 (11.7).
Projection:  1150.
 
DEC MEAL: It is not holding 310.00.  Today's low 307.60.  A trade could be developing.  See Trade Alert for details.  Closed 307.60, down 1.70.
 
DEC BEAN OIL:  I covered the bean oil this morning.  I did not like the strength in the market.  It closed back over the 20 day ma.  Just watching for now.  Closed 51.85, up .65.
Position:  Short 50.94 (10.31).  Exit 51.52 (11.8).  Loss $403 (+comm/fees).

MEAT COMMENTS:
 
DEC HOGS:  They have continued to sell off.  In two days they violated the both the 100 and 150 day ma.  They will reach some support at 85.000.   Move stops from 87.15 down to 85.75.  Closed 85.22, down .40.
Position:  Short 86.65 (11.3).
Projection:  82.50.
 
DEC CATTLE:  The 125.00 resistance has stopped them for now.  They got to 125.37 and have been selling off since.  The last time they reached this level was in mid July.  They got to 125.57 and sold off.  They sold off to 117.95.  So far this current correction is a correction to a third wave up.  It could go to 120.00.  It is close to reaching support at 122.50.  Closed 122.75, down .65.
 
 
SOFTS:
 
DEC COTTON:  Still nothing new here.  It is trying to hold the low end of its huge range near 95.00.  Today's low 95.96.  Just watching.  Closed 97.62, up .86.
 
JAN ORANGE JUICE:  It rallied to 175.00 resistance and has started to sell off.  If it can follow through it could reach the previous low area around 167.000.  It has good support under 165.00.   Just watching this market.  Closed 172.95, down .20.
 
DEC COFFEE:  Near term it did have more rally.  I mentioned that possibility last time because of the double bottom that it had formed.  It attempted to get over the 20 day ma both yesterday and today.  It succeeded but could not close above it.  It appears that coffee is still consolidating.  Just watching.  229.60, down 3.40.
 
DEC COCOA:  I bought it yesterday.  I raised the stop yesterday because it formed an inside day and it was reached today.  It also triggered a sell.  The sell-off did stop at the 20 day ma.  It sure has trouble holding over 27.00.  The attempts just can't follow through yet.  It appears to be still consolidating just like coffee.  Closed 26.63, down 65.
Position:  Long 27.15 (11.7).  Exit 26.76 (11.8).  Loss $445 (+comm/fees).
MAR SUGAR:  I covered the short this morning.  It just kept hold in the same area for too long.  Not a good sign.  It did rally and reached 26.18.  Just looking at the chart, it may be setting up for another rally.  Closed 25.91, up .59.
Position:  Short 26.47 (10.28).  Exit 25.48 (11.8).  Profit $1053.80 (-comm/fees).


METALS COMMENTS:

DEC COPPER:  It is consolidating around 3.50.  It formed an inside day today.  Just looking at the daily chart, it near term appears to have started the correction to a second wave up but without follow through.  It should sell off to around 3.30 but it sits at 3.50.  Just watching.  Closed 353.30, down .25.
 
DEC MINI GOLD:  It reached 1800.00 yesterday and attempted to get over it again today.  It is now selling off and forming a key reversal top in the after market.  The day session close does not form a key reversal top.   It has heavy resistance at 1800.00 and I would be surprised if it doesn't sell off from it this the first time.  Closed 1799.20, up 8.10.
 
DEC MINI SILVER:  It is trying to get over 35.000 resistance.   It will reach both the 100 and 150 day ma between 36.800 and 37.500 assuming it can rally.  If gold gets weak, I doubt that it will.  Just looking at the chart, silver seems to be dragged along by the gold.  Closed 35.153, up .325.
.
 
ENERGY, CURRENCIES & BONDS:
 
DEC MINI CRUDE OIL:  What is making crude rally is beyond me.  It is a lead economic indicator and based on what crude has been doing, we are in an economic boom.  You have got to be kidding!  Anyway, it is pushing into some resistance now but I suspect it will try for 100.00 sooner or later.  Closed 96.80, up 1.28.

DEC MINI JAPANESE YEN:  As follow up to my last comment on the yen, it sure isn't following the same reaction it had when they intervened in early August.  After consolidating for a few days, it finally rallied today but not much.  It reached the 129.00 resistance and stopped.  It is also dealing with the 100 day ma at that level too.  Closed 128.78, up .60.
 
DEC SWISS FRANC:  The head and shoulders bottom mentioned earlier is still intact but barely.  It formed a key reversal bottom today to the recent sell-of.  If there is follow through, it could try for 115.00.  So far it is consolidating like many markets.  Nothing new.  Closed 111.89, up .86.
 
DEC DOLLAR INDEX:  I tried to buy it yesterday.  It reached my price only during the night session.  I tried again today.  The price was not reached.  It sold off and took out last Thursday's low.  It may try to test 76.000 again.  There is a lot of support there.  Watching closely to buy.  Closed 76.751, down .390.
 
DEC MINI EUROCURRENCY:  It has a buy signal from last week but has done nothing.  It continues to be held back by the 20 day ma.  Just looking at the chart, it suggests that it will try for 140.00 again.  Closed 138.40, up .69.
 
DEC CANADIAN DOLLAR:  It has been consolidating and holding the 98.00 support.  It has been in a downtrend since the July high.  It appears to have started a third wave down but has stopped at that 98.00 support.  It also triggered a buy today.  I think this one is a toss of the coin.  Just watching.  Closed 98.95, up .35.
 
DEC AUSTRALIAN DOLLAR:  A trade could be developing.  See Trade Alert for details.  Closed 138.40, up .69.
 
DEC 10 YR. NOTES:  They triggered a sell on Friday.  They rallied but are now selling off again.  Move stops from 130.300 down to 130.190.
Position:  Short 129.210 (11.4).
Projection:  128.000.