rounded corner
rounded corner
top border

Week 2017-11-13 (early) - Asia Scalp - Bitcoin - Sugar


Bookmark and Share

This Week

There are no major market data releases this week. Normally this may indicate slow markets, but it is also a time when a single fat-finger order can drive prices lower. Traders expecting a slow week will put on chop trades that are oversized, and have to jump out when a big price move occurs. This can cause markets to have some decent sized price swings with no obvious underlying reason. So keep your stops in place this week, but chop away.

Scalp Opportunity

Thursday saw a wobbler in Asian trade as Japanese markets took a dip. Australian markets missed the action as it occurred late in the day. However, Australian markets are often used as a hedge to for Japan trade because of proximity and ease of access. For Friday trade, Australian markets may follow suit in this wobbler, meaning that price swings may provide some good scalp opportunities.

US banks will be closed on Friday for Vetrans` Day, but markets remain open. Traders may take the opportunity for a long weekend, so expect that Friday volumes in the USA will be lower. Any significant moves in EU and Asian trade may translate into some larger price swings in the USA when volumes are lower.

Don`t turn a scalp into a position. Look for a good exit before the weekend.

Bitcoin

Volatility is high in Bitcoin because the code split, Segwit2x, has been delayed by the power players in the space. Many speculators went into Bitcoin on the hopes of profiting from the split, taking their cues from the earlier split into Bitcoin Cash and Bitcoin Extended. However, this code update has merely been delayed for now. So the market is looking to see if speculators will exit these positions, taking profits, and re-enter at lower prices as the market dips.

There is also demand on the buy-side as traders digest what CBOE contracts will look like to market. Such a contract will allow big players to trade Bitcoin without violating their reporting requirements. This contract will likely be cash settled and NOT actually have control of any Bitcoins. As a futures contract, it will also likely be the price level pointed to by media and trading firms to set their prices. This opens up the space to the same manipulations that the gold market has endured for years. So it remains to be seen if actual market price has any relation to paper future Bitcoin price. It also remains to be seen if the HFTs will be bashing the futures contract to manipulate the physical price (actual price) spreads.

Speculation in the future of Bitcoin is currently high, and that always means higher price moves if only in the near term. Such speculation always drops off on a dip when the media news cycle starts banging about lack of transparency and government intervention. This may mean larger price swings in the near term.

Current price action looks like the Bitcoin price is setting up for a dip into the weekend. Low order volumes could also see massive price swings. This may allow for an excellent scalping opportunity with orders on the low and high sides of price spike range. So look for a chop in the weekend and early in the week.

Sugar

Sugar price has moved higher, but there is weakness at current levels. The market is still a good short opportunity when trading options with a longer expiration date (loss limit set by value price).

Brazil is the big player in this space. With their sugar exports expected to rise this season, this will have a downward push on price.

Changes to EU sugar tariffs means that more sugar will be leaving the EU this year, produced with the EU farm subsidy grants.

Demand for sugar is relatively stable year to year. However, China tariffs may lower Chinese buying this year. This means that lower sugar demand this year may cause a larger price drop than would be expected in a normal harvest season.

Australian sugar harvest is nearly complete. The current crush was in line with previous years. Estimates were slightly lower than last year, but the harvest seems to be higher than these low expectations. So no major moves by the Australian supply are expected.

A recent dip in the Australian Dollar to the US Dollar has made Australian sugar more competitive on the international market. Expectations are that the Australian dollar will continue lower, which means that this sugar harvest will help to move price action lower in the near term.

So it is still a good time to sell sugar futures.

The Sugar and Sweetener Outlook Report for November 2017 comes out this Thursday. This may give markets an indication of oversupply for existing demand. It will add trading volume to market, as well.

October 2017 Sugar report here:

https://www.ers.usda.gov/publications/pub-details/?pubid=85468

Recent WASDE report here:

https://www.usda.gov/oce/commodity/wasde/latest.pdf

DISCLAIMER:

YOU ARE AN ADULT and must make your own decisions. ONLY YOU know what level of experience you possess. ONLY YOU know what level of risk you are willing to take. ONLY YOU know what your financial goals are, and to what lengths you are prepared to go to meet those goals. You will be the one to wear your losses, so trade with caution and do your own research.

Henry Ledyard is an independent trader. He has NO affiliations with banks, brokerages, funds, trading houses or markets. He trades for himself and posts trading ideas merely to share information. He does NOT want your money, advice or opinions. He does NOT want your unsolicited emails. If you require further financial advice, seek it elsewhere. Henry`s opinions should be considered as addled as his blog site:

www.addlepated.com.au




Recent articles from this author



About the author


Henry Ledyard is a futures and options trader with over 20 years of trading experience and over 10 years of experience in trading futures. Henry Ledyard holds multiple degrees: BE Electrical Engineering, BS Physics, and BA Visual Arts. He has worked as a prop-trader (AU bonds, USA bonds) but found the bond market not conducive to his trading style. He currently trades for himself, and has no associations with any brokerage or firms. He has no boss and seeks no money for his information and trade ideas.

Henry’s trading focus is primarily on futures with longer term trades (hours to days) in tangibles (commodities and equities) with a real world bias. This is because high frequency trading algorithms are in control of much of the arbitrage trades and short term volatility.

Henry is predominantly a chart reader who looks for direction changes to enter and exit markets and is not a trend follower or scalper (much). His trade ideas are based on broader market forces creating opportunity while focusing on over-sold or over-bought moves. To make money in markets, he has to combine timing, direction and risk which can be a challenge (and may not suit your trading style). He is not an FX trader, nor stock trader (mostly) and tries to avoid bond markets except as a spread for other trades. He also avoids ETFs and many derivative products because of exaggerated leveraged moves.

Henry is based in Sydney, Australia and normally trades EU pre-market through the USA session with the occasional eye to Asia trade for indicators of direction.

The trade ideas expressed by Henry are places he sees potential for profit and may be as addlepated as his blog site: www.addlepated.com.au

Published by Barchart
Home  •  Charts & Quotes  •  Commentary  •  Authors  •  Education  •  Broker Search  •  Trading Tools  •  Help  •  Contact  •  Advertise With Us  •  Commodities
Markets: Currencies  •   Energies  •   Financials  •   Grains  •   Indices  •   Meats  •   Metals  •   Softs

The information contained on InsideFutures.com is believed to be accurate but is not guaranteed. Market data is furnished on an exchange delayed basis by Barchart.com. Data transmission or omissions shall not be made the basis for any claim, demand or cause for action. No information on the site, nor any opinion expressed, constitutes a solicitation of the purchase or sale of any futures or options contracts. InsideFutures.com is not a broker, nor does it have an affiliation with any broker.


Copyright ©2005-2018 InsideFutures.com, a Barchart.com product. All rights reserved.

About Us  •   Sitemap  •   Legal  •   Privacy Statement