MARKET UPDATE
JUDY CRAWFORD
(TRADES FOR WEDNESDAY, SEPT. 3, 2008)
888-301-8120
jcrawford@zaner.com

GENERAL COMMENT:  The bearish position I have had on several markets continue to be reconfirmed by market action.  Unfortunately, some of them occurred during the night session and had advanced too much to warrant entry during today.  However, we are looking at long term changes in many markets, I believe, and there should be more opportunities again.

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 phone 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 hogs.  Buy 70.62 stop.  Protective stop 68.70.  Potential projection 74.00.
Reasons for the Trade:
1.  On both the monthly and weekly charts hogs are holding in support (68.00 level). 
2.  On the daily chart, hogs sold off to previous support and have been holding there for three days. 
3.  On the daily chart, hogs formed a key reversal bottom today suggesting a trend change from down to up.
4.  Today was an outside day that can trigger a signal and market direction.

Sell December coffee.  Sell 141.55 stop.  Protective stop 145.45 stop.  Potential projection 134.00.
Reasons for the Trade:
1.  The monthly chart triggered a preliminary sell signal last month.
2.  On the weekly chart, coffee broke out of the 140.00 to 141.00 resistance last week. That is major resistance going back to last October.  It rallied up to the downtrend line and stopped.  It is now back under that resistance.
3.  Coffee broke out of its extensive consolidation to the upside in late June but did not follow through.  It sold back into the consolidation soon after.  It has been a tendency with markets that when they do that, it is a false breakout and they eventually follow through in the opposite direction - in this instance the real breakout could be to the downside.
4.  On the daily chart, coffee broke out over the 148.00 resistance last week but  failed to hold.  It is now back under the 146.00 resistance.
5.  A sell signal would push coffee under the 142.00 current support.

GRAIN COMMENTS:

DEC CORN:  The weekly chart triggered a preliminary sell signal this week.  The daily chart gapped down today and reached the 560 support.  It did go under that price but rallied back over it.  It has three previous sell signals - the third being triggered today.  The 580 level is now resistance and a rally to that level to fill the gap could be a selling opportunity.  Either way, there should be more follow through with this current sell-off.  Closed 569 1/4, down 15 3/4.

DEC WHEAT:  The monthly chart triggered a preliminary sell signal this month.  That is not supportive for buying wheat which I have been waiting to do. It is under the previous 780 support which is not good either.  On the daily chart the next major support is at 700.  It did gap down today and you may see a rally to fill that gap at 798 1/2.   Just watching for now.  Closed 766 3/4, down 34 1/2.

NOV BEANS:  On the weekly chart, beans triggered a preliminary sell signal this week.  They did gap down and could be starting a second wave down.  Because of the gap, beans may try to rally to fill it.  In fact they closed out the day near the high end of they day's range.  The monthly chart is not showing any real change even though I have pointed out in detail bean's attempt at forming a major top on the monthly for a second time.  This time it may stick.  On the daily chart, beans finally broke out of the congestion they were forming and appear to be starting a fourth wave down.  The daily also triggered a sell today from Friday's inside day.  A rally to fill that gap could be an opportunity to sell.  Closed 1298 1/2, down 25 1/2.

DEC MEAL:  I attempted to sell it Friday.  The price was never reached.  It formed an inside day Friday and triggered a sell today.  The monthly has resistance at 360 (basis the September contract) and the weekly still has a buy signal.  Last week it rallied up to the 20 day moving average and that was it.  The daily appears to be starting a third wave down.  Like the beans, it is attempting to fill the gap (356) and closed near the high end of the day's range.   Closed 355.40, down 2.60.

DEC BEAN OIL:  The weekly chart triggered a sell this week while the monthly is near support at 50.00 (basis the September contract).  The daily chart triggered a sell today from Friday's inside day.  That is the second sell signal.  It sold off into a support area and is holding.  I would not be surprised if it rallied to fill the gap (53.64) like the rest of the bean complex.  Closed 52.83, down 1.37.

MEAT COMMENTS:

DEC HOGS:   Last time I mentioned that the hogs sold off into previous support.  They have been holding there for three days and formed an outside day today.  The weekly already has a sell signal and is holding in the same support.  Don't be surprised if they rally from here.  See Trade Alert for details.  Closed 69.95, up 40.

OCT CATTLE:  On the monthly chart, they are almost right back at historic highs (104.70).  The monthly is also triggering a buy signal.  On the weekly chart they gapped up and, most likely, will fill that gap.  Just watching.  Closed 103.75, down 30.

SOFTS COMMENTS:

DEC COTTON:  I attempted to sell if Friday, the price was never reached.  I sold it this morning at 68.14.  It then rallied back over the 20 day moving average.  Keep stops at 70.97 and let the market work.  Closed 70.18, up 65.
Position:  Short 68.14 (9.2).
Projection:  64.00.  

NOV ORANGE JUICE:  In my last report I pointed out that the chart action was "setting up" for a move.  OJ collapsed today.  The weekly looks like it is starting another wave down.  The monthly chart formed a key reversal bottom last month but also triggered another sell signal!  It is now under the 105.00 support which is not good.  The daily triggered a sell today from Friday's inside day.  It appears to be starting a new wave down.  Closed 106.20, down 5.95.

DEC  COFFEE:  I have been trying to sell it but my price was not reached again today.  After selling off back under the 148.00 resistance, it then sold off under the 146.00 support on Friday.  Not good.  Today it continued the sell-off but is trying to hold at the 142.00 support which is constructive.  See Trade Alert for details.  Closed 144.45, down 1.30.  

DEC COCOA:   I attempted to sell it Friday.  The price was never reached.  It gapped down today under the 28.50 support and sold off to 26.41!  My projection was 25.50.  There should be further follow through.  Closed 26.64, down 195.

OCT SUGAR:   It triggered a sell on Friday.  I moved stops down to 12.89 this morning.  It sold off to 12.37.  There is some support at 12.60 but not a lot.  Closed 12.71, down 7.
Position:  Short 13.14 (8.29).
Projection:  12.00.

METALS COMMENTS:

DEC COPPER:  The sell signal triggered last week continued to follow through today to 315.90.  The previous low at 321.00 was taken out, suggesting the start of another major wave down.  If there is follow through, the potential projection is to 273.00.  Long term it is attempting to hold the 320.00 support area.  Closed 327.30, down 11.40.

DEC (mini) GOLD:  Stops were reached this morning.  It sold off to 795.20.  The low made on the 15th was 777.70.  This sell-off could be a test of that low.  Obviously the key is if it can hold it.  The monthly is holding at the 20 day moving average for the second month in a row.  The weekly is pushing into support.  Watching closely.  Closed 810,50, down 24.70.
Position:  Long 837.10 (8.27).  Exit 811.00 (9.2).  Loss $866.52.

DEC SILVER:  Its monthly chart looks very different than the gold.  It has violated the 20 day moving average.  On both the monthly and weekly chart it keeps pushing deeper into support and is now near the lower end of that support. Just watching.  Closed 13.145, down 55.70.

MISC. MARKETS COMMENTS:

OCT CRUDE OIL:  Last time I pointed out that the long term charts were not positive and I suggested that the consolidation on the daily chart was setting up for another wave down.  That is exactly what has happened.  The monthly has a key reversal top and a sell signal from earlier.  The next support area on the weekly chart is 100.00.  It also triggered a sell this week.  The daily chart triggered a sell on Friday.  If it attempts to rally, it will run into heavy resistance around 112.00 up to 114.00.  That should be an opportunity to sell.  Closed 109.71, down 5.75.

OCT (MINI) NATURAL GAS:  I have been just watching this market.  It continues to sell off and long term continues to push into support.  The monthly has a sell signal and closed under the 20 day moving average last month.  The weekly triggered another sell signal this week.  The daily triggered a sell last Friday.   I have wanted to buy it but it is just not ready.  Closed 7.261, down .682.

SEPT JAPANESE YEN:  Last time I was concerned with the resistance at 92.50 as I saw the yen rallying.   It tried both Friday and today to get over that resistance.  It did but could not hold it, forming a double top at 92.99 and then closing back under 92.50 today.  Long term the yen is in an uptrend but in a correctional phase to a second major wave up.  The current correction has not yet met the normal projection.  In short, there should be further sell-off.  Waiting to sell.  Clsoed 92.12, up 10.

SEPT DOLLAR INDEX:  The outside day referred to last time triggered a buy.  It rallied over the current resistance area that it was stuck in and reached another resistance level at 78.40 made last October.  That resistance is minor in comparison to the level it just broke out of.  Long term it is now suggesting that the next resistance will be at the 80.00 level.  Just watching.  Closed 78.14, up 46.

SEPT EUROCURRENCY:   It was holding the 146.00 support but failed today.  The new low is 144.56.  Long term it is starting to push under the 20 day moving average.  The weekly chart has pretty decent support at 144.00.  It may hold there for a rally but longer term this market is turning into a bear.  Closed 145.04, down 127.

SEPT CANADIAN DOLLAR:  The sell signal mentioned last time has continued to follow through and has taken out the low (93.14) of the last sell-off.  It is giving every appearance of starting a new wave down.  Be careful.  It is trying to hold in some long term support going back to July 2007.  It might try to rally.  Irrespective, long term it appears a major top has been made and a rally should be an opportunity to sell.  Closed 93.58, down 39.

DEC BONDS:  They are crazy.  Thursday they formed a key reversal top on the daily chart.  An inside day on Friday triggered a sell today.  But that was short lived.  They turned around and rallied and formed an outside day.  They are almost back to the high (119.120) made last week. Today's high 119.055.  Long term they look as though they will rally higher.  Just watching.  Closed 118.315, up 25.5. 

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.