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Sugar Gaps-up and Rallies on Energy Price surge

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Mar 20 sugar futures gap-up and rally as energy prices surge after a drone strike on Saudi oil facilities. Sugar bears have been caught while extremely vulnerable as a new record net short was noted on Fridays COT report. At such an extreme position it often requires only some validity granted to a supply threat or rising demand to spark a wave of short covering. With the surge in energy prices incentivizing producers to utilize more sugar for ethanol we saw this sugar rally set into motion. The rest of the fundamental picture supports extended gains heading into whats expected to be a large production deficit for the 2019/20 season,leading to a tighter supply situation. If Mar 20 prices close above 12.34 on the daily chart I would consider it a very bullish indicator and expect continued momentum into the next trading session as well. If the fundamentals continue this bullish track my analysis suggests we could see prices climb back up to the 14.00 level this year and possibly beyond. To discuss this or other markets you may email me at To learn more about chart patterns and how to use them you may download our free Technical Analysis Trading Guide here, Or click the link below.

Mar 20 Sugar Daily Chart 9 16

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About the author

Eric entered the workforce during the summer of 2007 as an apprentice tradesman just before the big crash and recession which followed. The impact of which strongly inspired his interest in the financial industry and began him as a student of the markets. Eric worked throughout the following years developing strong communication skills and risk management practices in the aviation and marketing industries before ultimately getting licensed and turning his passion into a career as a market strategist with RJO Futures.

Sector Focus

Eric specializes in trend following strategies in metals, stock indices, energies, grains, softs.

Analysis Preference

Supply and demand data ultimately determines the long term trend direction. However, Eric uses basic chart patterns and price action to determine the impact news and information has upon the markets, which provides insight to the short term volatility and provides clarity on timing for entry and exit of a position.

Strengths and Trading Philosophy

There are opportunities in the futures markets each minute of every trading day. Spreads and option strategies are utilized by Eric as they present themselves. These opportunities may tend to take place after a long buildup or extreme events. When they reveal themselves, he believes in using discipline during the three phases of a complete trading strategy: Information, Action, and Exit. Diligence in acquiring, organizing and reviewing solid and reliable information, coupled with knowing the risk that is involved. Eric's strength is confidence in taking decisive action to use opportunities revealed by the information.

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