MARKET UPDATE
JUDY CRAWFORD
(TRADES FOR WED., OCT. 21, 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!
ABOUT TRADING: Emotion is more your enemy than any market will ever be. The purpose of my Market Update is to help combat emotion and establish discipline by presenting a trading plan that a trader can understand and trades that have reasons so that a learning process evolves.
The Market Update includes the basics that any trading plan should have: Entry, Exit, and Projection. If those are not determined prior to a trade, you are asking for trouble. It also includes the reasons for the trades as a learning tool and a way to possibly improve your approach to the markets.
The Market Update is published on Tuesday and Thursday. Additional Trade Alerts are published on alternate days. To sign up for both register on my website: http://www.tradingfuturesmarkets.com/ and submit. You may also want to request some of my free trading booklets.
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TRADE ALERTS:
Buy December corn. Buy 390 1/4 stop. Protective stop 368 1/2. Potential projection 425.
Reasons for the Trade:
1. The monthly chart has a double bottom - technically suggesting a trend change from down to up.
2. The monthly chart is triggering a buy this month.
3. The weekly chart triggered a buy last week.
4. A buy signal on the daily chart would take out the high made last Wed. Since the contract low, each time corn had a correction and then took out the previous high prior to the correction, it continued to follow through.
5. The daily chart triggered a buy yesterday.
Buy December mini wheat. Buy 531 3/4 stop. Protective stop 495. Potential projection 575.
Reasons for the Trade:
1. On the monthly chart, wheat is back over the 500 major support.
2. On the monthly chart, the low in wheat last month held at the low end of support formed in 2007.
3. On the weekly chart, wheat rallied over the 20 day moving average last week. It held that indicator today which is now support. That is positive.
4. On the daily chart, wheat formed a double bottom on Oct. 5 - technically suggesting a trend change from down to up.
5. The daily chart has a previous buy signal that is still intact.
GRAIN COMMENTS:
DEC CORN: I tried to buy it today. It reached my entry price at nite. As you know, I do not position at nite. It sold off during the day. I'll try again tomorrow. See Trade Alert for details. Closed 384 1/2, down 1 3/4.
DEC MINI WHEAT: I tried to buy it today. It sold off instead as the 525 level is resistance near term. Today's low 508. I will try to buy it again tomorrow. See Trade Alert for details. Closed 517 1/2, down 1/4.
NOV BEANS: It now appears that the 1000.00 level is a problem for beans. Last week they rallied as high as 1012 1/4 but it was short lived. They sold off to the 970 level and tried again. Today's high was 1004 3/4 before they started to sell off. Part of their problem could be the sell signal they triggered on the 15th. It hasn't really followed through much but it still is there. Another concern is the key reversal top they formed on the day they reached 1012 1/4. Not encouraging either. These negative issues suggest more sell-off but how much. They clearly have rallied out of the near term downtrend they were in since the Aug. 13 high. What I'm watching is the 950 support level. If they sell off to that and hold, we could be setting up for a buy but, so far, they persist in holding 975. Just watching. Closed 982 1/2, down 13 3/4.
DEC MEAL: In comparison to beans, it has sold off a lot more from its recent highs - in fact approximately $19.00. It is very close to its 290.00 support area. The equivalent of that in beans would be 950. Its 20 day MA intersects at 288.00 so these areas are the points to watch. Closed 292.50, down 5.80.
DEC BEAN OIL: It triggered a buy on Friday and rallied to 37.94 today before selling off. Keep stops at 35.40 for now. Closed 37.47, down .12.
Position: Long 37.15 (10.16).
Projection: 41.00.
MEAT COMMENTS:
DEC HOGS: I raised my stop as I was not comfortable with their action. I was stopped out on Friday. They attempted to rally after that but finally sold off today - making a low at 52.10. There is support at 52.50 and they did closed above that. Watching closely to buy again. Closed 52.87, down 117.
Position: Long 54.12 (10.12). Exit 53.57 (10.16). Loss $220.
DEC CATTLE: Last time I pointed out that they were still in a downtrend even though they rallied and were over the 20 day MA. Yesterday they gave the first "hint" of trend change: Technically if a market takes out the high of the previous rally( when in a downtrend), that suggests an attempt at a trend change. They did just that. The previous rally high was 86.50 on Oct. 1 before they started a new wave down to 83.40. Yesterday's high was 86.575. They barely took out that Oct. 1 high, but they did do it. Today they have formed an inside day and are lower. It appears the 86.25 level is a tough one for cattle. To follow through in a trend change, they need to get over that level and hold. That may be asking a lot of cattle. I'm sure they will throw out a few false indicators just to drive everyone a bit crazy. Just watching. Closed 86.15, down .30.
SOFTS COMMENTS:
DEC COTTON: Last Thursday it formed an inside day. That initially triggered a buy in the morning and rallied to 68.92. It then sold off down to 66.35! How crazy. What I think is behind it is that cotton finally reached a gap at 69.67 made on Oct. 3, 2008. Once a market fills a gap, it will often back off in the opposite direction. Possibly cotton will now sell off to test the breakout at the 65.00 level that it was consolidating in for several months. Too early to tell. Just watching. Closed 67.23, up 76.
JAN ORANGE JUICE: Switching to January contract. An inside day yesterday triggered a buy today. I prefer to watch as the current wave up is very close to its potential projection around 124.00. If it follows its previous pattern, it should then have a pretty good sell-off to eventually buy into. Considering the extent of the previous sell-off in mid August, it might even offer an opportunity to short the market too. That would be a more risky trade as OJ has rallied over its major downtrend on the monthly chart. It did so several months ago and has, so far, confirmed what that suggests - a major trend change from down to up. To support that even further, OJ has rallied over the 20 day MA on the monthly chart. This month's low tested it and it has been straight up since. As I have pointed out for some time, OJ has given every indication of a major bottom. Closed 120.05, up 1.10.
DEC COFFEE: Last time I was stopped out. The very next day, it rallied to new highs. Very annoying. It reached 145.40 yesterday. That is a previous resistance area. It sold off today to the 140.00 support and appears to be holding. The current wave up has met projections and based on past behavior, there should be more to this sell-off. Just watching. Closed 141.80, down 2.45.
DEC COCOA: It took out the previous high (33.29) made on Oct. 9 yesterday and rallied to 33.45 today. The current wave up has projections to 34.00 on the daily chart. Just watching. Closed 33.38, up 33.
MAR SUGAR: It finally triggered a sell today. The current low is 23.28 which is under the 20 day MA but it did not stay there as it managed to close above it. Keep stops at 24.71 for now. Closed 23.74, down 43.
Position: Short 23.89 (10.20).
Projection: 20.00.
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.
