MARKET UPDATE
JUDY CRAWFORD
(TRADES FOR FRIDAY, SEPT. 5, 2008)
888-301-8120
jcrawford@zaner.com
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:
Sell December corn. Sell 553 1/2 stop. Protective stop 572 3/4. Potential projection 480.
Reasons for the Trade:
1. On the monthly chart corn is pushing up against the resistance formed by the high made in 1997.
2. The weekly chart has a sell signal.
3. On the weekly chart, corn has violated the uptrend formed since the October low.
4. On the weekly chart, corn has attempted to get back over the 600 resistance for the two previous weeks. It failed both times and gapped down this week.
5. The daily chart is in a downtrend. It violated the uptrend formed since the October low when it then broke out of the base it had built. The last major rally attempted to get back over that trendline and failed - forming a key reversal top.
6. The daily chart has three sell signals and is under the 20 day moving average.
7. Today was an inside day that can trigger a signal and market direction.
Sell November beans. Sell 1231 1/4 stop. Protective stop 1261 1/2. Potential projection 1100.00.
Reasons for the Trade:
1. The monthly chart has a key reversal top indicating a major trend change from up to down. This is the second month that is being confirmed.
2. On the weekly chart, beans sold off under the 20 day moving average several weeks ago.
3. On the weekly chart, they tried to rally back over the 1350 resistance for two weeks in a row. They failed and gapped down this week.
4. The weekly triggered a sell this week.
5. On the daily chart, beans are in a downtrend. They have had three waves down. The recent rally that peaked on Aug. 25 appears to be the setup for a fourth wave down.
6. The daily chart has a previous sell signal and is now trading under the 20 day moving average.
7. Today was an inside day that can trigger a signal and market direction.
Sell December meal. Sell 335.30 stop. Protective stop 346.50. Projection 310.00.
Reasons for the Trade:
1. The monthly chart has a key reversal top to months ago with continued follow through.
2. On the weekly chart, meal rallied up to the 20 day moving average last week and that stopped the rally.
3. On the weekly chart, meal rallied up to the 365.00 resistance area this week and has sold off.
4. The daily chart is in a downtrend. It has completed two waves down. The recent rally appears to be the setup for a third wave down.
5. On the daily chart, meal failed to hold the 355.00 support yesterday. It attempted to get back over it yesterday and failed.
6. On the daily chart, meal closed under the 20 day moving average yesterday for the first time since mid August. Today's rally was stopped by the average.
7. The daily chart has a previous sell signal.
8. Today was an inside day that can trigger a signal and market direction.
CHANGE IN OPEN STOPS:
Long September japanese yen from 91.70 up to 93.11.
GRAIN COMMENTS:
DEC CORN: It has a gap up at 580 3/4. It may or may not try to fill it. It has attempted for three days without success. If it does, I'll try to short from a different level. Today was an inside day and considering the negative technicals hanging over the market, I will suggest a sell from that formation. See Trade Alert for details. Closed 564 1/2, up 2 1/4.
DEC WHEAT: As you know I have been waiting to buy wheat. On the weekly chart the recent sell-off is attempting to hold in the 730 area (basis the Sept. contract). This is the same area that held the market in May prior to a rally to 950. To make a long story short, since November of 2007, wheat has stubbornly held between that price area up to 750 with every major sell-off. Unfortunately, the recent sell-off started to do some technical damage long term and on the daily chart. On the monthly it triggered a preliminary sell signal. Wheat never did that before when it tested this level in sell-offs. Not a good sign. Also, every time before it was not even near the 20 day moving average. Right now it is pushing to get back over it on the monthly chart. That's a red flag too. Now the daily triggered a buy today but getting back over 780 (December contract) has been a struggle for two days. Wheat has a gap up at 798 1/2 that it may try to fill. Wheat needs to get back over and hold 780 and that needs to be confirmed before I'm interested in buying again. This is a crucial time for wheat and the fact that it violated that support area for the first time concerns me. Also if that buy signal is negated right away that does not bode well for wheat either. Watching closely. Closed 777, up 2 1/4.
NOV BEANS: Last time I talked about the gap that they may try to fill. They did try and almost made it shy 2 3/4 cents. As pointed out many times in the last few years markets have tended to fill gaps only partially so I suspect this could be it in terms of filling it. Yesterday was a huge outside day. Today was an inside day. I would sell them. See Trade Alert for details. Closed 1235, down 16 1/2.
DEC MEAL: I tried to sell it today. The price was never reached. I'll try again tomorrow. See Trade Alert for details. Closed 342.00, unchanged.
DEC BEAN OIL: I thought it would rally to fill the gap at 53.64. This shows you how weak these markets are. Today it even failed to hold support and made a new low for this move. Closed 50.24, down 1.00.
MEAT COMMENTS:
DEC HOGS: I attempted to buy hogs but they rallied to my price during the night session only. During the day they sold off and never reached the entry price again. They formed another outside day and triggered a sell today. Just watching. Closed 68.40, down 35.
OCT CATTLE: They are trying to hold at the 103.00 support. Projections for this wave down are to 100.00. Waiting to sell. Closed 103.30, up 15.SOFTS COMMENTS:
DEC COTTON: This market is ridiculous and boring. Looking at the same numbers all day makes you wonder if it will ever move during your life time. Finally it did start to sell off. Two days ago it held 68.10 and it held it again today. It needs to take out 68.10 at this point. Keep stops at 70.51. Closed 68.46, down 1.53.
Position: Short 68.14 (9.2).
Projection: 64.00.
NOV ORANGE JUICE: I tried to sell it today. It rallied instead. I see nothing to do. Just watching. Closed 108.15, up 2.30. This is the second attempt at breaking out of resistance on the weekly chart. The attempt last week failed. Closed 108.15, up 2.30.
DEC COFFEE: I continue to try to short coffee. Today it triggered a buy again. The last buy signal failed. Possibly this one will follow through. The fact that it is turning around this quickly makes me suspect it may try to rally further. The monthly still has a sell signal and normally the long term chart leads. We'll see. In the meantime, just watching. Closed 146.75, up 3.75.
DEC COCOA: For the last three days it has continued to hold in the 26.50 support. At the same time, it can't get over 27.00 by very much. I see nothing to do. Just watching. Closed 26.50, down 3.
OCT SUGAR: Stops at 12.79 were reached today with a profit. At first, sugar triggered another sell signal. It then sat there for some time and finally rallied. It formed an outside day and rallied up to 13.18. Just watching for now. Closed 12.65, up 9.
Position: Short 13.14 (8.29). Exit 12.79 (8.4). Profit $392.00.
Projection: 12.00.
DEC COPPER: Since Tuesday's report, it has been trying to hold at the 325.00 level. Yesterday was an inside day. Today an outside day. We know when a market starts to go back to back with those formations , it is setting up to do something "cute" - in other words, take off in one direction or another. Overall nothing has changed the bearish scenario. This current wave down should follow through. Closed 326.60, down 4.60.
DEC GOLD: It continues to try to hold but so far is not showing much. An attempt to rally today was quickly negated. Just watching. Closed 803.20, down 5.00.
DEC SILVER: It triggered a buy today but has not followed through yet. Long term it is deep into support. The previous sell-off (or "collapse") was so quick and extensive, this consolidation, I suspect, is a set up for a rally. Closed 12.940, down 6.70.
MISC. MARKETS COMMENTS:OCT CRUDE OIL: The sell-off last Tuesday reached the high end of some support formed earlier this year. Since then it formed an inside day yesterday and an outside day today. The current wave down has met projections so I would lean towards a rally from this level. It should be an opportunity to sell as the negative long term scenario has not changed - it has only been further confirmed and the major support is at 100.00. Closed 107.89, down 1.46.
OCT (MINI) NATURAL GAS: On both longer term charts, NG is deep into support and that is about all it has going for it. The weekly triggered another sell this week. However, I have noticed on weekly charts (for any market) that when a sell signal is triggered when in support, it is not as "strong" a signal. The monthly triggered a sell last month. This is a tough call because the support it is in is very extensive long term. And the "lure" is that NG has been literally almost straight down from 13.500 to 7.000. That's 66.710 points. But then its major sell-offs have tended to be like that. In 2005 it dropped 93.300 points before it came up for air. In 2003 70.200 points. So even though the daily formed a key reversal day today and an outside day, I'm going to just watch. Closed 7.322, up .058.
SEPT JAPANESE YEN: It triggered a buy today and rallied to 93.53. There is some resistance there and it has stalled the market. Move stops up from 91.70 up to 93.11. Closed 93.50, up 102.
Position: Long 92.71 (9.4).
Projection: 94.50.
SEPT DOLLAR INDEX: It continues to suggest that it will head for the next major resistance up at 80.00. On the monthly chart, it opened above the 20 day moving average this month and has been straight up so far. Just watching. Closed 78.68, up 56.
SEPT EUROCURRENCY: On the monthly chart it is going right through minor support. It is also now under the 20 day moving average. Not a good sign. The next major support area is 137.50. On the daily chart it has some support at 143.00 that it held last December through February. Today's low 143.08. Closed 143.17, down 164.
SEPT CANADIAN DOLLAR: Long term it is trying to hold in some minor support between 93.00 and 94.00. The daily chart formed a key reversal bottom yesterday and an outside day. That triggered a buy signal today. There is so much "work" or "consolidation" above the market that it broke out of to the downside in early August, I don't see it holding here for long. It may rally but it should be an opportunity to short the market. All that "work" above the market should push it down to the 90.00 support. Closed 93.69, down 53.DEC BONDS: On both long term charts, bonds appear to be starting a new wave up. Several months ago they held the 114.00 support and their trend has been up since. On the monthly they are at the 120.00 resistance. This could set them back. It should give an opportunity to buy if they can "sit still" long enough to do so. Closed 119.025, up 15.5.
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.
