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 commentary portion of this edition was written on Wednesday, March 25th while the market analysis portion was prepared during the course of the trading day on Thurdays, March 26.
There was actually some reasonably good economic news to help support the rallying stock markets. Housing data in the form of existing and new home sales and a report on durable goods orders coming in better thank expected, in fact much better, helped keep the positive attitude alive. We also had a prime time Presidential news conference to help us all understand the economic rescue plan and during the course of trading this morning we were subject to Treasury Secretary Geithner's comments regarding the U.S. Dollar's value as a reserve currency following additional rhetoric regarding the Chinese plan for a global reserve currency. Needless to say there was confusion over Secretary Geithner's comments as he apparently said that he was open to the consideration of a new global reserve currency as well as clarifying these remarks to the effect that the dollar is still the dominant monetary unit and that all efforts will be made to maintain confidence in the U.S. financial system so that the dollar will maintain its place in the world. Even President Obama expressed the standard strong dollar policy during the press conference. The fervor surrounding the AIG bonuses, although still active and the subject of live coverage congressional inquiry, has quieted somewhat. Perhaps this distraction can be put aside.
We have seen many times where it takes a trader more than one attempt at getting his trading idea properly timed into the market. Trying to fit a broad ranging concept into a dynamic moving market where small incremental moves are equal to large sums of money is not an easy task. It is wise to be aware of this from the start. Many good ideas are wasted due to the frustration of living through the time of being wrong in the market. It is not so much being wrong but not being able to withstand the financial ramifications of controlling large amounts with small sums; i.e. trading on margin. This is one of the prime reasons money management is so vital. Mis-timing an entry is not unusual. It is going to happen and it is a valuable asset to be prepared for this eventuality. We have known very successful traders who have had the correct assessment about a market but were ahead of the curve. The market was simply not ready to respond to what they were seeing. A good example is of a particular trader we know who saw the financial system in disarray long before the rest of the market began to respond by selling stock prices lower and lower. His persistence eventually paid off tremendously but he might not have been around to realize the reward of his analytical labor had he not taken small incremental losses prior to the stock market finally peaking and falling like the proverbial safe out of a high rise. Some traders get stubborn and some traders become vindictive toward a particular market. It is an emotional response to being wrong that they have difficulty handling. These types of emotions too often will get the trader away from his intended trading plan. A trade is just a trade. It will be either right or wrong. It is key to approach each and every one the same way. Know before hand all the essential parameters. To us, most important is where you are wrong and take action if and when price reaches that point. The other aspect of this we alluded to is creating a vendetta against a market. If wrong it is not necessary to get back at or get even with that market. It had nothing personally against you. If wrong get out and go about the business of preparing for the next trade. When the next opportunity presents itself based on your analysis or trade qualifications make the trade. It doesn't have to be the same market or even the same side of the market. Getting locked in on a market and a particular position is an emotional hang-up and will likely doom a trader to failure. We heard it from a successful trader a long time ago that once you are out of a trade it is over. Your next trade may be the reverse of the one just exited, the same direction of that last trade in the same market or something completely different. It doesn't matter. It is just the next trade.
 ** cocoa (May) - We have seen what we believe was a significant correction to the upside since early March that has stopped in an area of natural resistance. We believe short entries can be initiated between 2575 and 2625 with stop protection upon penetration of 2645.
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 ** cotton (May) - We believe a sell entry can be initiated in a zone between 4425 and 4450. We suggest stop protection be taken with penetration of 4565.
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Coffee (May) - Coffee traded sideways this past week. We suggested that, even though we had pulled our long recommendation, that if long move stops to a break even level. Looking at the construction of the market it appears it could see another relatively short leg up and we would suggest using that to lighten long positions. We believe this may occur in the area of 12200 - 12400. As always, we remind all to maintain diligent money management strategy and to use and move stop protection as deemed appropriate. |
Sugar (May) - Currently two short entry approaches we have suggested have been elected and remain active. The first was a sell zone between 1335 and 1400 and the other was penetration of 1288. The suggested stop protection remains 1397 for both entry methods. Retracement levels of support are approx. 1275; 1238; 1200.
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 Feeder Cattle (April/May) - The stop protection for the short entry in the April contract from the sell the zone between 9400 - 9500 was elected with the close at 9430. Last week we mentioned how it was quite close at the time we were preparing this section. At that time we determined it was time to add the May contract to our coverage. We suggested initiating short positions in the May contract could be done in the zone between 9525 and 9640. This was achieved as the high for the week in the May contract was 9715. We believe stop protection should remain at intraday penetration of 9830 or on a close above 9720. Near term retracement levels of support are approx.: 9505; 9440; 9375. Additional levels are approx. 9487; 9327; 9170.
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 Silver (May) - There is one suggested short entry position active from the sell zone between 1320 and 1375. Stop protection remains intraday penetration of 1392. New or additional short entries we believe can be initiated upon penetration of 1294. If entering on this basis suggested stop protection would be intraday penetration of 1362. Short term retracement levels of support are approx.: 128850; 126500. Additional levels are approx.: 130100; 125000; 119950.
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 Gold (April) - Both of the recent short entry suggestions have seen their stop protection elected. The day of the Fed announcement created an incredible rally off the lows and then quickly hit the stop protection for the short entry when 88990 had been penetrated. The protection price we suggested was 91370. The original short entry we suggested on a close below 93000 saw its stop protection elected on the close above 94560. We do maintain that a move to lower price levels is in the making so we suggest a new short entry can be initiated upon penetration of 91540. Stop protection we believe would be intraday penetration of 94560. Another entry level for a short position would be upon penetration of 88240. Stop protection for this we believe would be a close above 90200. Retracement levels of resistance are approx.: 93020 (hit); 94500 (hit); 95980 (hit). Retracement levels of support are approx.: 88680; 84910; 81150.
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 Euro Currency (June) - As noted last week the remainder of the suggested short euro positions, which started with the March contract in the 14230 - 14340 range, would have seen stop protection elected with either the close of 12932 or 12910. The June contract reached as high as 13737 this week. We believe there is valid cause to believe this could have been the high of a correction phase. We suggest new short entries can be initiated in a sell zone between 13575 and 13625. If elected we suggest stop protection if there is intraday penetration of 13787. Another short entry approach can be utilized with penetration of 13409. Stop protection for this entry method we would suggest using a close above 13526 or intraday penetration of 13592. Retracement resistance levels are approx.: 13523 and 13575. Retracement levels of support are approx. 13247; 13096; 12945.
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|  Japanese Yen (June) - We believe our assumption last week that the upward move in the Japanese Yen was a correction of the bear pattern begun in January is correct. Our sell zone mentioned last week was not reached and we will not reiterate it at this time so as to not confuse. We believe short entries can now be initiated in a sell zone between 10235 and 10260. Stop protection for such entries we suggest an intraday penetration of 10424 or a close above 10365. We included a short entry in last week's edition of 10049 with stop protection suggested upon intraday penetration of 10261. We believe this remains a valid entry approach. Retracement resistance levels are approx.: 10355; 10421; 10488.
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 Canadian Dollar (June) - Last week we suggested short entries could be initiated at or above 8150. This was elected as the high for the week has been 8209. Our suggested stop protection remains at intraday penetration of 8402. Retracement levels of support are approx.: 8002; 7937; 7873. Retracement resistance levels are approx. 8182 and 8305. Levels above these are approx.: 8425; 8662; 8900. |
 Mexican Peso (June) - After a prolonged downward move we believe the Mexican Peso is exhibiting the beginning of at least a sizable correction or confirming what could be a multi-month low. Currently it is trading at 69625. We believe long entries can be made from this price level or lower. For stop protection we will suggest intraday penetration of 66175. There are near term extension targets of approx.: 74000 and 75200.
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 S&P 500 (march/June emini) - The S&P has continued moving higher. Our suggested short entry zone between 765 and 792 which had already been initiated by last week saw the stop protection elected at 812 this week. We believe this action confirms a bottom is in for some period of time. We suggest long entries can be made in a zone between 775 and 760. Stop protection for long positions initiated this way we would suggest using an intraday penetration of 744. Retracement resistance levels are approx.: 833; 90950; 98650; 106325. |
Chicago Wheat (May) - We are back to our original bearish mode of thinking in the wheat. We believe a sell zone exists between 550 - 560 and short entries can be initiated there. Stop protection utilizing an intraday penetration of 582 is suggested. Retracement resistance levels are approx.: 558.75; 577.75; 596.75.
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 Soybeans (May) - We return from the sidelines in the soybeans seeing a sell zone between 954 and 980. We believe short entries can be initiated there with stop protection taken upon intraday penetration of 1002. Retracement resistance levels are approx. 950 and 980, followed by series of approx.: 1022; 1095; 1169.
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 T-Bonds (June) - Last week we noted that a short entry had seen the stop protection elected at 132-17 while the market's high was 132-18. We believe a sell zone now exists between 129-21 and 130-11 and short entries can be initiated there. We suggest stop protection at penetration of 132-19. Another short entry approach can be initiated upon intraday penetration of 12303. We suggest if elected to use stop protection of intraday penetration of 125-17. Retracement resistance levels are approx.: 129-21; 131-23; 133-24.
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Ten Year Notes (June) - We believe there is a sell zone between 124-13 and 12426 where short entries can be initiated. We suggest stop protection of a penetration above 125-20. We will update retracement levels most likely next week.
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