If any questions, comments, observations or more importantly any answers, please feel free to contact us at : 1 800 321-5810 ; email cbands@cbandsbrokerage.com
The Trade Focus market analysis portion of this edition was prepared during the course of the trading day on Thursday, February 5th. The commentary was written on Friday, February 6th.
This week we would like to focus our commentary on a more specific area regarding the topic of respect that we have talked about in previous weeks. Many traders lose sight of the fact that trading futures contracts on margin allows them great leverage. They are controlling a rather large amount of product with a small amount of capital. For many, this skews their perceived level of risk. For every small incremental change in price there is a greater percentage change in equity or net capital. Unfortunately it is not always for the good but rather, results in a larger negative net change than the trader wants to accept or admit. The use of margin is a privilege not an entitlement. It deserves to be respected. Thinking of it in this way contributes a great deal toward developing respect for the market and trading. When this is realized and accepted into the trader's mindset it opens the door to a world of good things. These include the value of sound money management, the preservation of capital and the ability to accept a loss. We believe these to be some of the more important attributes of successful market traders.
Sugar (march) - The 1300 area continues to pose resistance to further advance in the sugar. This week the high was 1307 but the market closed near its low on the day that it was made. Last week we reiterated the waning momentum factor and our indicators became more suggestive of this during the course of trading this week. We also suggested lightening long positions or liquidating longs looking for a close above 1305 as a signal of reformed strength. We maintain that attitude. Retracement levels of support are approx.: 1210; 1180; 1150. Retracement resistance levels are approx.: 1314 and 1378. If bullish you can consider the area between 1180 - 1150 as a buy zone with stop protection of 1120 or 1070 if less conservative. |
 Feeder Cattle (march) - Shorts that had been based upon a close below 9090 would have been stopped out this week as our 9250 closing basis stop protection was more than a little violated. The close was 9400 which happened to be at the daily permissible limit and has yet to trade above that price. We will continue to look for opportunities as we feel over time this market will erode to a significantly lower price level.
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 Silver (march) - Silver notched another level higher this week. Our concern over momentum remains an issue for us, however. We have determined what we believe to be a viable extension target which coincidentally hits approximately at 128475; today's high so far 128900. But the market is the market and until further notice it is maintaining its upward slope. If stop protection on long positions, including those we suggested on a close above 117700, haven't been moved upward this should be done at the very least to that 117700 level. Retracement resistance levels are approx.: 127800 (hit); 141100; 154400. If the high at 128900 is not penetrated the retracement levels of support are approx.: 111750; 106450; 101150.
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Gold (April) - A few weeks ago we had suggested a method of long entry basis the February contract was on a close above 89200. This happened and subsequently holders of longs needed to roll to the April contract which at the time we wrote last week could have been done at 90500. We suggested stop protection for the new April position on a penetration of 87500. Currently the price is 91440. For those wishing to tighten stop protection we believe that a close below 89000 can be used. Otherwise keep the penetration of 87500 as the gauge or combine the 87500 intraday stop with a closing basis stop of just under the 89000 level. Retracement levels of support are approx.: 88250; 86740; 85240. The next series of supports are approx.: 85960; 83740; 81520.
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Euro Currency (march) - In our December 24 th edition we suggested 2 methods to initiate short positions from an active long position. One was using a sell zone between 14230 and 14340 and the other upon penetration of 13790. Both methods were satisfied by January 5. Last week we suggested stop protection could be reduced to a close above 13364. It now would be prudent to reduce protection to a close above 13090. Near term retracement resistance levels are approx.: 12935 (hit); 13008(hit); 13082. The next series above is approx.: 13106; 13233; 13360.
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|  Japanese Yen (March) - Last week we said, "The double top scenario remains in development. It will take a breach of 10567 (we prefer closing basis) to confirm." We still very much adhere to this view and suggest that short positions can be initiated on a close below 10567. We also believe that at this time short positions can be entered within a sell zone between 11170 and 11250. Stop protection we believe would be appropriate above 11390. Retracement resistance levels are approx.: 11090; 11170; 11248. Retracement resistance levels of support are approx.: 10922; 10746; 10571. |
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 S&P 500 (march emini) - The trading pattern has been sideways to down since last fall. Since the middle of December there have been only three brief periods where the March emini contract has closed above its 50 day moving average. The most recent lasted but one day back on January 28. The last positive action we believe was the week leading up to the New Year and the first few days after January 1. We view the trading pattern as negative since that time and it is possible a new leg down is about to unfold. A close above 85000 could put this event on hold. On a relatively short term basis it appears that penetration of 80000 activates extension targets of approx. 78650 and 76700. Retracement resistance levels are approx.: 85205(hit); 86935(hit); 88670. |
Chicago Wheat (March) - During the course of this week's trading the second of our suggested short entries was satisfied with the close at 54225. The stop protection was also satisfied with today's close above 560. That leaves the initial short entry we suggested in the sell zone of 585 - 595 mentioned two weeks ago. We believe stop protection can be lowered to a close above 585. Retracement levels of resistance are approx. 57925; 59200; 604.75. Retracement levels of support are approx.: 579.25; 558.50; 53800. |
 Soybeans (march) - Last week we said we favored the short side and suggested short positions could be initiated on a close below 957 which would have been elected with the close at 94600. The stop protection of 98100 was also elected we are sorry to say. The pattern is conflicting in our opinion at this time so we feel it best to leave the soybeans alone until further development.
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T-Bonds (march) - Recently there have been two short entry levels elected that we have suggested. One was using a sell zone between 136-24 and 137-00 and the other upon penetration of 131-23.5. There are intermediate extension targets active at approx.125-23.5 and 124-15. (These are adjusted from 125-00 and 124-17 published last week). We believe stop protection can be lowered to a close above 129-00 from the previous suggested closing level of 131-23. We believe initiating new short positions can be considered in a new sell zone between 131-27 and 133-10. Stop protection for this would be a close above the 50 day moving average which is currently 133-21. We still believe the objective is in the lower 120-00's and perhaps more specifically targeting 122-25. Near term retracement resistance levels are approx.: 127-30.75; 128-21; 129-11. The next series is approx.: 130-12.5; 131-26.75; 133-09.
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 Ten Year Notes (March) - Similar to the T-Bond futures there are two short position entry levels that have been elected over the recent weeks. The first was based on a suggested sell zone between 126-00 and 126-20 and the second was upon penetration of 123-09. We believe stop protection for both entries can be lowered to a close above 124-22. Near term retracement resistance levels are approx.: 122-25.75; 123-06.5; 123-20. The next series is approx.: 123-25.25; 124-16; 12506.75.
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