MARKET UPDATE
JUDY CRAWFORD
(TRADES FOR WEDNESDAY, OCT. 8, 2008)
888-301-8120
jcrawford@zaner.com
GENERAL COMMENT:
The excessive sell-offs that we have seen further supports a recession scenario. But nothing goes straight down (or up) forever. Many of these markets are over sold, on minor support and should be setting up for some interim rallies.
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 cocoa. Sell 23.72 stop. Protective stop 24.32. Potential projection 23.00.Reasons for the Trade:
1. Both the monthly and weekly charts have key reversal tops.
2. On the monthly chart, cocoa violated the 24.00 support level this month.
3. The weekly chart is in a downtrend. It is in the process of a fourth wave down with projections to 23.00.
4. The daily chart is in a downtrend. It is in the process of a fourth wave down that has not yet met projections (22.70).
Buy December mini silver. Buy 11.950 stop. Protective stop 10.910. Potential projection 14.500.Reasons for the Trade:
1. On both the monthly and weekly chart silver has been holding at the 11.000 support.
2. On the daily chart silver has been attempting to rally over the downtrend line formed since the July 15 high. A buy signal would push it over that downtrend line.
3. On the daily chart silver appears to have established one wave up since the low made on September 11. The recent sell-off appears to be the correction to that first wave up. It now appears to be starting a second wave up.
4. On the daily chart silver triggered a buy signal today.
Sell December bonds. Sell 120.040 stop. Protective stop 121.26.5. Potential projection 117.00
Reasons for the Trade:
1. The monthly chart formed a key reversal top last month.
2. On the monthly chart, bonds rallied to the 122.000 resistance and are selling off. This area has produced sell-offs in the past. This rally could be a test of the contract high that fails.
3. The weekly chart formed a key reversal top several weeks ago and it is still intact.
4. On the weekly chart bonds rallied to the 122.000 resistance and is selling off.
5. On the daily chart, bond's attempt to test the contract high has failed and has been stopped by the 122.000 resistance level.
6. Today was an inside day that can trigger a signal and market direction.
GRAIN COMMENTS:
DEC CORN: It collapsed through my projection so I moved the stop way down and will see where it goes. It is now in another support level at around 420 but the major support is 400. My longer term support in corn still remains at 380. Move stops from 432 3/4 down to 430 3/4. Closed 417, down 7.
Position: Short 478 3/4 (10.2).
Projection: 440.
DEC WHEAT: It made another new low yesterday at 588 1/2. It also triggered another sell signal. I had mentioned last time that the next support level was 600. Even though it went through it, it is struggling to hold. That support was formed between June 2007 through September 2007. I would expect some sort of rally from this level. Just watching for now. Closed 603 1/4, up 8.
NOV BEANS: My long term support was 900. Today's low is 916 3/4. The 900 level has pretty decent support formed in mid 2007. The current wave down has met projections so I suspect they will try to rally from here. If they can consolidate at all that should help form a rally. Closed 926, up 4.
DEC MEAL: My long term support was at 250 (as mentioned last time). That has been met. On the daily chart the current wave down has met projections as well. On the daily chart meal formed support at the 250 level in October 2007 and is attempting to hold there. Just watching. Closed 256.80, up 6.90.
DEC BEAN OIL: As mentioned last time long term support is still at 38.00. The current low is 39.50. It is the only one in the bean complex that closed lower. Just watching. Closed 39.82, down 18.
MEAT COMMENTS:DEC HOGS: They triggered a sell yesterday and are back to rallying today! They have three sell signals that are still intact but for a lack of a better term trying to position in them is like trying to catch a greased pig! Closed 61.42, up 1.60.
DEC CATTLE: Last time I pointed out that on the monthly chart it was key to get the cattle under 94.00 support. They did do that and doing so put them under the 20 day moving average. So on your check list of technical negatives developing in the market, those are two right there. On the daily chart they gapped down yesterday and made a low at 94.77. That is the same low today, possibly forming a double bottom. If they rally it will probably be to fill the gap at 97.47. Closed 95.35, up 57.
SOFTS COMMENTS:
DEC COTTON: It triggered a sell yesterday and sold off down limit. It rallied today but could not do much. It took out yesterday's low (54.41) today. The new low is 53.41. Keep stops at 57.38. Closed 53.56, down 76.
Position: Short 55.75 (10.6).
Projection: 50.00.
NOV ORANGE JUICE: On the weekly chart it is now is some support going back to 2004. The low made last week was 78.30. An inside day yesterday triggered a buy today. The current wave down on the daily chart has met projections. I see the potential for a rally. Closed 83.40, up 90.
DEC COFFEE: It sold off through my projection and I covered it Monday morning. The low yesterday was 112.95. Long term it has good support at 110.00. Today it is trying to hold yesterday's low. It also formed an inside day today. Just watching for now. Closed 114.20, down 50.
Position: Short 128.30 (10.2). Exit 115.45 (10.6). Profit $4818.75.
DEC COCOA: I attempted to sell it today. It rallied instead. I still have a projection to 23.00. I'll try again tomorrow. See Trade Alert for details. Closed 24.22, up 13.
MAR SUGAR: It met my projections on Monday and then some. It made a low at 11.74. It held that low today and rallied - forming an outside day. Just watching. Closed 12.03, up 12.
Position: Short 13.65 (9.30). Exit 11.99 (10.6). Profit $1859.20.
DEC COPPER: My long term projections were down to 240.00. On the monthly chart it went down to 248.30. The current wave down on the daily chart has gone beyond projections and this market appears oversold.Today it is forming an inside day. I would not be surprised to see a rally from here. Closed 253.45, up 4.15.
DEC GOLD: It almost reached my projection on Friday and I got out. It sold off to 822.50. It has rallied since then and the current high is 893.70. It is too early to tell but that correction could have been an opportunity to buy it. I see nothing to do because it just isn't clear enough. It still could go either way. It could trade back and forth at this level and do nothing for some time. You just don't know. Watching closely. Closed 882.00, up 15.80.
Position: Short 868.70 (10.2). Exit 824.10 (10.3). Profit $1427.20.
DEC SILVER: In spite of silver's lackluster performance while gold has been all over the place, it could be finally setting up for a decent rally. See Trade Alert for details. Closed 11.380, up 9.50.
MISC. MARKETS COMMENTS:
NOV CRUDE OIL: Last time I was looking at another wave down. That is what occurred with a new low at 87.56. It is deep in support formed between Nov. 2007 and Feb. 2008. Even though the current wave down has not met potential projections, that support may stop the decline and produce a small rally. Just watching. Closed 90.06, up 2.25.
NOV (MINI) NATURAL GAS: Its attempts to form a bottom failed. The rally back up into support was merely to test the breakout to the downside. It started to follow through again and made a new low today at 6.735. Waiting to buy. Closed 6.768, down .067.
DEC JAPANESE YEN: I took profit yesterday morning and then it really took off and rallied! It went to 100.49. That is the largest one day rally I have ever seen in the yen since the futures have traded. It then sold off and today formed an inside day. Longer term this market appears to be setting up for a huge bull move. After yesterday's action I would like to see more retracement and consolidation. Waiting to buy again. Closed 99.07, down 89.
Position: Long 95.91 (10.1). Exit 97.51 (10.6). Profit $2000.
DEC DOLLAR INDEX: It rallied to 81.25 yesterday and gives every appearance of starting a new wave up. Longer term it is in resistance. Just watching for now. Closed 81.22, down 62.
DEC EUROCURRENCY: It has been in a free fall since I missed that sell. It took out the previous low and made a new one yesterday at 134.48. Today it ralllied to 137.49. Just watching for now. Closed 136.52, up 191.
DEC CANADIAN DOLLAR: Since my last Update it has continued to sell off with a new low yesterday at 90.26. Today was an inside day. A rally could be an opportunity to short again. Just watching for now. Closed 90.68, up 12.DEC BONDS: I have been waiting to short them. They finally formed an inside day today. See Trade Alert for details. Closed 120.235, down 107.5.
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.
