MARKET UPDATE
JUDY CRAWFORD
(TRADES FOR FRIDAY, AUGUST 22, 2008)
888-301-8120
jcrawford@zaner.com
GENERAL COMMENT: In my last Update I pointed out the potential for rallies in several markets. That is occurring. Many reached resistance levels already while others have a ways to go. Considering the aggressiveness of the rallies and the oversold situations, they could push into these resistance areas more. Many are forming setups to sell the market.
ABOUT TRADING:
A client of mine, Larry, made the following comment: "When trading you are committing your money to something that you have no control over so you have to do it in a way to keep yourself out of trouble. You need a system to help you in volatile markets." No truer words were spoken. Statistics show that the successful trader is wrong well over 50% of the time but still makes money because he uses a system.
Developing a system takes time. The purpose of my Market Update is not only to give market guidance but also to show you what the basic components to any system should have prior to placing a trade: an Entry, an Exit, and a Projection. The goal of the Update is to point you in the right direction, save you time and, hopefully, improve your trading skills.
SOME IMPORTANT THINGS TO KNOW:
1. "Trade Alerts" are good for the next day only.
2. I do not enter markets during the night session.
3. I always have stops in during the night session.
4. I will move stops during the day and only existing clients are notified of these changes at that time. 5. You are welcome to contact me at any time (whether you're a client or not) to discuss a market or anything in question in the Updates. Either email or hone is fine. I personally answer all inquiries.
OPENING AN ACCOUNT:
Please feel free to contact me regarding opening an account. You will work with me personally. I'm affiliated with Zaner Group, an Introducing Broker, which enables us to clear more than one clearing firm so we can fit the trader to the firm best suited for them. Looking forward to hearing from you!
TRADE ALERT:
Buy December wheat. Buy 908 1/2 limit. Protective stop 865. Potential projection 10.00.
Reasons for the Trade:
1. The monthly chart is forming a preliminary key reversal bottom.
2. On the monthly chart, wheat continues to hold both the 20 day moving average and the 750 support.
3. On the weekly chart, wheat rallied above the 20 day moving average last week and is holding above it this week.
4. Since the low made in May on the weekly chart, wheat has had one wave up and appears to be setting up for a second wave with a potential to 10.00.
5. On the daily chart, wheat appears to be setting up for a second wave up with a potential to 10.00.
6. On the daily chart, the low made in early August was a key reversal bottom.
7. The daily chart has two previous buy signals that are still intact. It triggered an additional buy yesterday.
Buy November orange juice. Buy 108.10 stop. Protective stop 105.10. Potential projection 116.00.
Reasons for the trade:
1. On both the monthly and weekly charts, OJ has been holding in support.
2. On the daily chart OJ has two previous buy signals that are still intact.
3. On the daily chart OJ appears to have had one wave up and the recent sell-off of two days ago could be the set up for a second wave up. That sell-off stopped in minor support.
4. On the daily chart OJ is trading into a pennant. A buy signal would establish a breakout from that pennant to the upside.
5. A buy signal would push OJ over the 20 day moving average.
6. Today was an inside day that can trigger a signal and market direction.
Buy December (mini) gold. Buy 826.50 limit. Protective stop 804.00. Potential projection 803.50. Potential projection 860.00.
Reasons for the Trade:
1. On the monthly chart the recent sell-off held at the 775.00 support. This is also where the 20 day moving average intersects.
2. On the weekly chart, gold is holding at the 780.00 support. That support held the market last November prior to the rally to 1000 +.
3. On the daily chart, gold has had two major waves down. The second and most recent wave down has exceeded projections suggesting an oversold market.
4. On the daily chart, gold has rallied back into the major support formed late last year.
5. Gold triggered a buy yesterday.
CHANGE IN OPEN STOPS:
Long October mini natural gas from 7.880 to 8.010.
Short September dollar index from 77.60 down to 77.10.
GRAIN COMMENTS:
DEC CORN: It is now pushing into the very heavy resistance that formed from April through June between 600 and 640. Today's high 625. In my last report I suggested that a rally to this area could set corn up for a sale. The first rally corn managed to produce that peaked on July 30 stopped at this level. Watching closely. Closed 617 1/2, up 22 1/2.
DEC WHEAT: It triggered a buy yesterday. It rallied to 957 today. That is a resistance area but considering the base under the market, it should eventually go through that towards the objective. I moved stops up from 865 1/2 to 924 1/2 before the close and it was reached with a profit. I would buy a further setback. See Trade Alert for details. Closed 922 1/4, up 22 3/4.
Position: Long 901 1/4 (8.20). Exit 924 1/2 (8.20). Profit $1162.50.
Projection: 10.00.
NOV BEANS: Last time I pointed out how volatile they are. After forming that key reversal top, they turned around and made a new high. They are now pushing into resistance. Today's high 1369 3/4. They have resistance between 1360 and 1420. Just watching. Closed 1348, up 48.
DEC MEAL: I tried to sell it today. It rallied instead and reached 368.40. It is now is minor resistance. Early this year it tried twice to get through 355.00 before collapsing to the 270.00 area. That area has been an issue since. Today it closed over it and reached the next resistance at 365.00. I see this rally as a set up for a sell. Watching closely. Closed 358.70, up 5.00.
DEC BEAN OIL: It rallied today and reached 56.35. It will not run into any serious resistance until 58.00. Waiting to sell. Closed 56.35, up 2.50.
MEAT COMMENTS:DEC HOGS: I lowered the stop this morning as I did not like that during the night session they held the same support they held yesterday. I was stopped out at almost cost. Their past history has been to hold near the 73.00 support level. They did so yesterday and today when they made a low at 73.25 and 73.27 respectively. Waiting to sell again. Closed 74.32, down 10.
Position: Short 74.65 (8.19). Exit 74.57 (8.20). - 0 -
SOFTS COMMENTS:
DEC COTTON: Stops were reached yesterday with a profit. Today it rallied and made a high at 70.28. It is still in a downtrend. The current wave down has met projections so there could be more of a follow through rally this time. Just watching. Closed 69.84, up 1.96.
Position: Short 69.49 (8.14). Exit 68.45 (8.20). Profit $520.
NOV ORANGE JUICE: A trade could be developing. See Trade Alert for details. Closed 106.55, up 25.
DEC COFFEE: Since my last Update it has continued to rally but is still stuck in its range. Right now the high for this rally is 145.35. It really needs to close above 148.00 to change the situation. It does have good resistance at 146.00 but it has gotten over that before to only fizzle out at 148.00. Watching closely. Closed 143.65, up 2.60.
DEC COCOA: I attempted to sell it today. It rallied instead. Being its usual self it rallied 185+ points. Ever since the high in early July, it has "spiked" up like this twice before. Both times it was an opportunity to sell. It is starting to push into resistance between 28.00 and 29.00. Since the contract high it has been in a downtrend and this appears to be the setup for a fourth wave down. Waiting to sell. Closed 28.41, up 185.
OCT SUGAR: Stops were reached today. It rallied to 14.34. Its main problem area is 14.40. It got above that once but it could not close above it. It is not clear whether it is starting a new wave up since it is still range bound and the chart just isn't clear. It needs a close above 14.40 to confirm the start of a new wave up at this point since that has consistently been a trouble area. Closed 14.14, up 50.
Position: Short 13.05 (8.15). Exit 13.87 (8.21). Loss $918.40.
SEPT COPPER: It formed a key reversal top yesterday only to negate it today. It rallied to 356.25 today and is now pushing into resistance. It just does not have the base under it to push through the considerable top that copper has formed since early this year. But knowing how weird copper is, that does not mean it cannot push further into this resistance anywhere from 360.00 up to 375.00. Just watching. Closed 354.60, up 14.90.
DEC GOLD: I bought it yesterday. That was a short lived trade as it was stopped out. It followed through today and made a new high at 845.00. It does not have much of a base under it but this market is so oversold along with other factors, I still see setbacks as buying. On the 14th it got to 842.90 before selling off to the recent low. Today's high is right in that territory so possibly it will retrace. I will go with the small contract allowing me to place the protective stop where it should be. Yesterday's stop should have been under the outside day but using the regular size contract that would be risking too much. As it turns out, the sell-off did not negate that formation and started to follow through today. See Trade Alert for details. Closed 839.00, up 22.70. Position: Long 823.30 (8.20). Exit 809.80 (8.20). Loss $1350. SEPT SILVER: It is rallying along with the other metals but it looks more like a "tag along" affair. I do not see anything impressive here. Just watching. Closed 137.727, up 68.70.
MISC. MARKETS COMMENTS:
OCT CRUDE OIL: Last time I mentioned the potential for a rally. It did do that and broke out of the consolidation it had formed today and rallied to 122.04. It is now in resistance going back to early June. If it backs off from this resistance, it should be an opportunity to buy. Closed 121.18, up 5.62.
OCT (MINI) NATURAL GAS: It triggered a buy yesterday. It reached 8.490 today. Move stops from 7.880 to 8.010 for now. Closed 8.359, up .183.
Position: Long 8.257 (8.20).
Projection: 9.000.
SEPT JAPANESE YEN: It triggered a buy today and rallied right up to the 92.50 resistance level. It has been in a downtrend since March and this rally should set up another selling opportunity. Closed 92.18, up 99.
SEPT DOLLAR INDEX: I tried to sell it yesterday. The price was not reached. I tried again today and had to pay up a little. It sold off to 76.17. It has minor support at 76.20 but I do not see it holding here. There should be more to the sell-off. Move stops from 77.60 down to 77.10. Closed 76.33, down 89.
Position: Short 76.59 (8.21).
Projection: 74.80.
SEPT EUROCURRENCY: Last time I suggested the potential for a rally and that it has done. Today's high 148.85. The 150.00 level is minor resistance and that could slow the market but the real resistance is up at 153.00. Just watching. Closed 148.57, up 139.
SEPT CANADIAN DOLLAR: It has been rallying too and this should produce an opportunity to sell. Today's high 95.97. The main resistance will start at 97.00. Closed 95.61, up 152.SEPT BONDS: They formed a double top today so I took profit at 117.23 even though they have been trying to hold 117.16 for several days. Just watching. Closed 117.235, down 10.
Position: Long 116.26 (8.13). Exit 117.23 (8.21). Profit $906.25.
Projection: 118.24.
There is substantial risk of loss in trading futures and options. Past performance is not indicative of future results.
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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
