MARKET UPDATE
JUDY CRAWFORD
(TRADES FOR WED., JULY 1, 2009)
888-301-8120
jcrawford@zaner.com
Unique and timely technical review of all the major markets including trade suggestions plus the technical reasons for the trades. Published on Tuesday and Thursday, learn while you trade! Additional trade suggestions for alternate days (titled Trade Alerts) are published but not available here. To receive free the complete Market Update including the additional Trade Alerts, sign up on my website: www.tradingfuturesmarkets.com. If you have any questions or want to discuss a particular market or trading in general, give me a call or email. I look forward to hearing from you!
GENERAL COMMENT: Many markets technically look confused or seem in a struggle for lack of a better description. Or possibly they are in a transition phase. It is too early to tell. These phases can get choppy so one needs to be aware of that.
On another note, I have been finding discrepancies in my quoting system recently to the extent that I have had to change stops in a couple of instances. I contacted the quoting/charting company regarding this and they were going to look into it.
ABOUT TRADING: Trading is not easy. Emotion is more your enemy than any market will ever be. That is why a trading plan is so important. It forces discipline and a removal from emotion. In my Market Update I show you the trading components all trading plans need: Entry, Exit, Projection. If those are not determined prior to a trade, you are asking for trouble. I also share with you the pecularities of the markets that you don't find in a textbook but only through years of trading experience.
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TRADE ALERTS:
Buy September coffee. Buy 121.80 stop. Protective stop 118.60. Potential projection 130.00.
Reasons for the Trade:
1. On both the monthly and weekly charts, coffee continues to hold in the 120.00 support area.
2. On the weekly chart, the recent major sell-off appears to be a test of the breakout in May from the major bottom it was forming prior to that. This is normal for a market to do. Once the breakout is tested and holds, the market resumes the rally produced from the major bottom.
3. On the daily chart, coffee has been consolidating around the 120.00 support for nine trading days. That is constructive. That is also a previous support area formed earlier this year.
4. On the daily chart, coffee formed a key reversal bottom last Thursday. That is positive.
5. Today was an inside day that can trigger a signal and market direction.
GRAIN COMMENTS: The USDA report came out this morning for the grains regarding acreage and quarterly stocks. It was not good for corn or wheat and constructive for beans. The odd part of it is that the long term charts for the beans do not support the report - at least until now they have not.
SEPT CORN: I tried to buy it on Monday but my price was never reached. It has continued to drift lower since my last report and today, it sold off down limit (30 cents) after the bearish report this morning. The bottom line is that since the contract low (335 ¾) made in December, corn has been range bound from a high end at approximately 460 down to roughly 375. Today it obviously sold off under that with a limit down low at 354 ½. Where do we go from here? Technically the key is how it reacts if it gets to 335 ¾. Longer term it has not done anything negative. It still has a major key reversal bottom. And I would take notice that in June of 2007 corn did the same thing it is doing now. That month it had a huge range from 426 down to 323 (it closed the month out at 329 ½). It then stabilized and then started the major move that rallied the market to 776. Unless something technically changes, of course, this market still appears to be setting up for a major rally and this sell-off, if it copies last year at all, is the set up for a good buy in the near future. Closed 354 ½, down 30.
SEPT WHEAT: I have attempted to buy wheat but the price was never reached. September wheat's contract low was made last December at 522 ¾. Today's low 525 when it responded to the report. Longer term nothing has changed technically with wheat yet. The monthly still has a buy signal. Since the huge drop last October, wheat on the monthly trades like it does not want to be under 500. Watching closely. Closed 540 ¾, down 17.
AUG BEANS: The report was constructive for beans but just looking at the long term charts, it looks as though their sell-off is just beginning?? They do have some support at 1100 but a sell-off to 1050 or 1000 technically looks more reasonable considering the extent of the rally that topped in early June. Just watching. Closed 1119 ¼, down 2 ¾.
SEPT MEAL: It triggered a sell on Monday. Today it sold off to 324.80 and then rallied up to 340.00. Like the beans, technically it looks like its sell-off is just starting. Keep stops at 342.50. Closed 339.30, up 2.90.
Position: Short 335.10 (6.29).
Projection: 315.00.
AUG BEAN OIL: Longer term it has decent support at 34.00. Just looking at the long term charts, its sell-off does not look over at all. It is now in the middle of a huge gap on the daily chart that will be filled at 34.11. Technically it could go to 33.00 - 32.00 as bean oil has had a tendency to have very steep corrections. It still appears to be in the early phases of a bull move and this sell-off should turn into an opportunity to buy. Closed 35.22, down 73.
MEAT COMMENTS:
AUG HOGS: They triggered a buy today. I had to pay up. Please note I changed the stop to 57.30. For some reason my charting service has in more than one case recently changed the high and/or low of a market the following day. Closed 60.65, up 202.
Position: Long 59.50 (6.30).
Projection: 62.50.
AUG CATTLE: I have commented on how the cattle have been stuck in a range. Yesterday they decided to rally and this time they rallied in one day to the high end of their trading range. Of course, that stopped them and today they did make a new high again at 85.80 but that is still not producing a breakout from the range. Just watching. Closed 85.25, down 1.50.
SOFTS COMMENTS:
DEC COTTON: It formed a huge outside day today. It rallied to 58.94 (and then collapsed down to 55.89). The 20 day moving average intersected at 58.38 plus cotton was starting to push into some resistance in the same area as the 20 day that probably influenced it. On the daily chart, cotton has had two waves down. This current rally could be the set up for a third wave down. Yet, 56.00 is good support and it has been trying to stay above that. Just watching. Closed 57.48, up 51.
SEPT ORANGE JUICE: On the daily chart, OJ has been pushing into support (around 76.00) formed last March. That area produced a major rally that peaked at the end of May. Today it rallied from 76.10 up to 79.75. It has resistance at 80.00 so I suspect it will back off again and do more consolidating. If it continues to "work" in this area, we may be looking at a bottom. Watching closely. Closed 78.85, up 250.
SEPT COFFEE: I attempted to buy it today but the price was not reached. Yesterday was an outside day. Today was an inside day. I'll try again tomorrow. See Trade Alert for details. Closed 119.90, down 35.
SEPT COCOA: Since last Thursday's key reversal bottom on the daily chart, it has made attempts at 26.00 resistance but that is about it. For the last three trading days it has been stuck between 26.00 down to 25.00. This market is very confused. For the last five months on the monthly chart, cocoa forms a key reversal top one month. The very next month it forms a key reversal bottom. Back and forth. This month it formed a key reversal top again. The weekly chart is just as messy. Right now I do not see any direction. Just watching. Closed 25.10, down 43.
OCT SUGAR: Another new high today at 18.09. Longer term it is pushing into resistance around the 18.00 level. Watching closely to sell. Closed 17.85, down 5.
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
