MARKET UPDATE
JUDY CRAWFORD
(TRADES FOR THURS., OCT. 2, 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 (888-301-8120) or email. I look forward to hearing from you!
GENERAL COMMENT: I think it important to point out that many markets rallied up to their 20 day moving averages on their daily charts and that stopped the advance or some actually got over it but could not sustain it - so far. Here is the list: beans, meal, swiss, euro-fx, Canadian, dow, emini, silver, gold, cotton, oj, coffee, crude, hogs, cattle. That is very unusual for so many to be in the same position. What is also noteworthy is that on the monthly charts, both the Dow and the Emini rallied up to the 20 day moving average last month and that stopped their advance. As we speak they are backing off from that indicator. That indicator also happens to intersect with some longer term resistance on both their charts. It would be healthy for both the Dow and the Emini to have a correction. They have rallied almost "straight up" since March. Nothing goes on forever. Every market needs to back and fill to sustain any sort of advance - assuming we have seen the bottom. My point being, we could be at a critical phase and one has to ask if this will trigger some major sell-offs? Some good - some bad. Possibly this also explains some of the struggle the markets are going through at these levels. These points on the individual markets need to be watched closely.
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TRADE ALERTS:
Sell December cotton. Sell 60.89 stop. Protective stop 62.85. Potential projection 56.00.
Reasons for the Trade:
1. On the monthly chart, cotton rallied up to resistance at 65.00 level and has been selling off.
2. The weekly chart formed a key reversal top last week. Every time it has done so, cotton has followed through with approx. a 9.00 sell-off. That would give cotton a potential down to 56.00.
3. The weekly chart appears to be starting the correctional phase to a recent wave up.
4. The daily chart formed a key reversal top last week.
5. The daily chart has two sell signals.
6. The daily chart sold off under the 20 day moving average again today.
7. Today was an inside day that can trigger a signal and market direction.
Sell November orange juice. Sell 89.10 stop. Protective stop 93.35. Potential projection 80.00.
Reasons for the Trade:
1. On the monthly chart, oj has failed to rally and hold above the 20 day moving average for the third month in a row. It is now trading under that indicator again.
2. On the monthly chart, oj tried to rally over the 1000.00 resistance for three months in a row and is selling off again from that level.
3. The weekly chart triggered a preliminary sell signal this week.
4. The weekly chart has a previous sell signal that is still intact.
5. On the weekly chart, oj is back under the 20 day moving average. That is negative.
6. On the daily chart oj sold off under the 20 day moving average last Thursday. It has traded under that indicator since.
7. On the daily chart, oj made a high on August 12. The recent rally that peaked on Sept. 18 appears to be the set up for a second wave down since that high.
8. On the daily chart, oj rallied up to the 20 day moving today and that stopped the rally. It closed near the low end of the day's trading range.
9. Today was an inside day that can trigger a signal and market direction.
Sell December cocoa. Sell 30.62 stop. Protective stop 31.60. Potential projection 28.00.
Reasons for the Trade:
1. On the monthly chart, cocoa rallied up to previous resistance at 32.00 and has been selling off. The last time it was at this level was in 2008 and it produced an extensive sell-off at that time.
2. The weekly chart formed a key reversal top last week from the same area. The weekly had also produced a key reversal top at this level in 2008 prior to a major sell-off.
3. The daily chart formed a key reversal top last week.
4. On the daily chart a sell signal would push cocoa under the 20 day moving average.
5. Today was an inside day that can trigger a signal and market direction.
GRAIN COMMENTS:
DEC CORN: I have a feeling this will be a "long haul" (as the saying goes) if this trade materializes . Corn continues to consolidate and crawl along. It is now at the higher end of its range and backing off. Considering the consolidation, if it breaks out to the upside, the rally should be a good one. It sure has the base under it. Closed 340 ½, down 3 ½.
Position: Long 342 ¼ (9.29).
Projection: 375.
DEC WHEAT: It made a new low yesterday at 439 ½ and then formed a key reversal bottom on the daily chart. In spite of that, it has a few hurtles it needs to get over before it will turn positive. For one thing, it needs to close back over 450 (with follow through) and it needs to get over the 20 day moving average that now intersects around 460. That indicator has dominated and limited rallies since it violated it in early June. Long term there is minor support at 430 but the real support is down around 400. Just watching. Closed 452 ¾, down 4 ¾.
NOV BEANS: Last time I leaned towards more sell-off and that has not changed. They attempted to get over the 20 day moving average for four days. No such luck. As pointed out before, what has slowed the sell-off is that they are in support on the daily chart. The low end of that support is 900. It is very important both short and long term. Not holding that, could push beans down to 850 near term. I see nothing to do. Closed 918, down 9.
DEC MEAL: It continues to struggle with the 20 day moving average. At least it has succeeded in rallying over it several times. That is more than the beans can claim. Irrespective, meal cannot sustain it. Right now it is trying to hold 280 support. Today was an outside day. If it sells off under 279.80 it will be triggering a sell. Unfortunately the trade would require too much risk. Just watching. Closed 280.80, down 4.70.
DEC BEAN OIL: It rallied over the 20 day moving average today and reached 34.90. There is resistance at 35.00 and that stopped the potential turn around. Long term that is a resistance area too. If it can't get back over that level, the next support is 34.00 long term, with the major support at 30.00. Closed 34.59, up 26.
MEAT COMMENTS:
DEC HOGS: I have wanted to buy them but was waiting for more long term support. It isn't happening. They were trying to hold 50.00 and have now sold off under it. On the daily chart, they have support at 47.50 but violated the 20 day moving average today that intersected at approximately 49.50. They look headed for 45.00 but have some decent support at 47.00 on the daily chart. Closed 48.62, down 97.
DEC CATTLE: They triggered a buy this morning. They then sold off and stops were reached. Just watching. Closed 84.97, down 115.
Position: Long 86.37 (10.1). Exit 84.77 (10.1). Loss $640.
Projection: 90.00.
SOFTS COMMENTS:
DEC COTTON: Last time I pointed out that every time it violates the 20 day moving average and trades under it, it has good follow through. That appears to be the case again. Also, the weekly continues to suggest a correction is starting. A trade could be developing. See Trade Alert for details. Closed 61.34, down 1.50.
NOV ORANGE JUICE: I have been attempting to short it. It continues to hold the 90.00 support and seems stuck between that and the 20 day moving average that intersects at approximately 94.00. I will try again tomorrow. See Trade Alert for details. Closed 92.35, up 80.
DEC COFFEE: Yesterday it could not take out the previous day's low and just "sat there." When a market does that, the probability of a rally is pretty high. I covered the position at 126.65 for a very small loss. It then rallied 230 points. Today it rallied up to the 20 day moving average and stopped. It then sold off to close near the close of the day's range. Just watching. Closed 126.70, down 1.05.
Position: Short 126.50 (9.29). Exit 126.65 (9.30). Loss $56.25.
DEC COCOA: I attempted to short it but the outside day triggered a buy instead. It rallied to 31.58 yesterday. I will try again tomorrow. See Trade Alert for details. Closed 30.92, down 49.
MAR SUGAR: It is starting to form the classic "rally back to test the contract high" formation. If sugar fails from here, we are, most likely, looking at a major top. It has a lot of support on the daily chart at 24.00 that goes down to 23.00. Sugar needs to get under all of that for more confirmation. Just watching. Closed 24.64, down 74.
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.
