|
TRADE Focus
06/25/2009
We invite you to call and ask about any of these market situations we have discussed or to ask about our considerations for the best trade opportunities for the day or for the week. We also welcome any comment on our weekly commentary as well. We believe, through our years of experience, that what we offer is of value. We are confident enough, in fact, to say to you to tell your friends, relatives and neighbors about us too. Please feel free to contact us at 1 800 321-5810 or email to cbands@cbandsbrokerage.com
The Trade Focus commentary was written Wednesday, June 24th and the market analysis section was written during the course of business on Thursday, June 25th.
Looking at this past week's economic news we find mixed signals. Housing data in the form of existing and new home sales fell short of expectations while improving over the previous month in the case of existing home sales and with new home sales just slightly below those of the prior month. Durable Goods Orders were released today and were much better than expected rising by 1.8 pct, matching the gains of last month but they were far better than the expected decline of 0.9 pct. The FOMC concluded its two day meeting announcing no change to its target rates of 0.0 - 0.25 pct. A disappointment though, according to analysts, was that the Fed did not signal an increase to its Mortgage Backed Securities and Treasuries Purchase Program as many reportedly had expected. It did say that the pace of the economy's contraction is slowing while a "substantial resource slack is likely to dampen cost pressures and the Committee expects that inflation will remain subdued for some time." Financial market conditions were noted as improving in recent months and consumer spending appears to be stabilizing even with continued job losses. Following the Fed's statement yields on treasuries were seen rising and the US Dollar firmed. Also of significance was the record $104 billion of Treasury Notes auctioned this week. The results so far, with only the $27 billion in 7-yr notes to go, continue to show good demand. Still to come the last portion of the week will be the final 1st Quarter GDP figures, expected unchanged from the preliminary estimates at minus 5.7 pct., and Personal Income and Spending. The University of Michigan Sentiment Index will conclude the week's economic calendar and is expected to be unchanged to 1 point below the previous reading.
We have often noted the impact emotions can have on making trading decisions. Emotions can arise in many ways. Frequently they perk up while watching market action and especially as a market may be reaching a crescendo. There are other forms though too, including fear of taking a loss and the building of resentment for a particular market where a loss or series of losses have been taken are just a few. These are not only common but difficult to avoid as part of the human condition. Unfortunately they must be fought and the further a trader can progress toward eliminating them we believe the better the chances for success. We talk about this with individual traders frequently and although we find no single solution for all it does seem beneficial to develop a regimented standard of discipline. A reasonable analogy we find to be that of the quarterback who has a standard and set procedure of checkdowns from the time he calls the play in the huddle until he releases the ball either with a pass or a handoff. If each trade is approached with a set of checkdowns or conditions that must be met prior to placing the order the opportunity for the emotional aspect to enter into the trade decision can be eliminated or at least greatly reduced. Adding to this is the need to know where the position, if filled, becomes incorrect and also too that if correct establishing a planned objective. We find this greatly enhances the ability of the individual to be more mechanical and to avoid situations where short term market gyrations cause a change to the trading plan. It helps to avoid chasing a market because it looks hot or to exit because it looks like its going sour even before violating any of the pre-determined caution points. Establishing a discipline and remaining disciplined to it is crucial. We believe also that patience is a vital element and must be included as part of the overall program. Patience not only at the individual level but also patience with trading markets. There is no way to ever know with complete certainty what the next move will be or even the next tick. Anything can happen and usually does. We believe we have seen enough evidence that in the long run trading requires a disciplined approach to a disciplined program exercising the fortitude of patience.
Note: We are archiving the Traders Focus from here on so that those interested can follow more easily.
 Coffee (Sept) - Last week we suggested long entries could be initiated with intraday penetration of 12580. This would not have been elected. We believe subsequent market action allows a reduction in the long entry level to intraday penetration of 12350. Stop protection if elected we suggest intraday penetration of 11850. Retracement resistance levels are approx.: 12790; 13115; 13440. |
 Cocoa (Sept) - We believe a sell zone exists between 2640 and 2690 and that short entries can be initiated in this price range. If elected stop protection we believe should be intraday penetration of 2792. We believe that a level between 2300 and 2200 will be the initial target zone. Retracement resistance levels are approx.: 2589; 2640; 2691.
|
 Silver (July) - There are now short entries active from the suggested price level of 158000 or above and from last week's suggested short entry when penetrating 138900. This week's low has been 135950 and is currently trading 139600 as we prepare this section. We believe stop protection can be reduced to intraday penetration of 149600 and 148300 respectively. New or additional positions can be initiated in the September contract with intraday penetration of 135850. Stop protection for this new short entry in the September contract should be a close above 143250 or intraday penetration of 144600. Retracement resistance levels are approx.: 143290; 145600; 147910. The next series above is approx.: 146000; 149150; 152300. Retracement levels of support are approx.: 134230; 125420; 116620.
|
 Gold (Aug) - There are active short entries from a price level of 97800 or higher. Last week we suggested that short entries could be reduced if price reached to the 91750 to 91500 area. This week's low has been 91320 so some action could have been taken. Stop protection for remaining short entries from the 97800 level can be reduced to intraday penetration of 95620. Retracement resistance levels are approx.: 94280; 95220; 96160.
|
 Euro Currency (Sept) - There is an active short entry from the intraday penetration of 14042 as described in the June 11 edition. Stop protection remains intraday penetration of 14182. New or additional short entries can be initiated with intraday penetration of 13687. Stop protection for this new short entry if elected should be intraday penetration of 13837. Retracement levels of support are approx.: 13773; 13601; 13430. The next series below is approx.: 13629; 13413; 13198.
|
|  Japanese Yen (Sept) - Short entries from our suggested sell zone between 10390 and 10460 would have seen stop protection elected with either the intraday penetration of 10523 and the close above 10481 (10516). The high for the week has been 10551 with the subsequent low being 10362. It is currently trading 10432 as we prepare this section this week. We believe that this market is working its way through a large consolidation phase prior to its making another run to lower price levels initially visiting the 9900 area and eventually lower. We believe that short entries can be initiated at a price level of 10515 or better with stop protection being intraday penetration of 10685. Another method for short entry approach we believe can be with a close below 10330. Stop protection for this closing level short entry should be intraday penetration of 10526. Retracement levels of support are approx.: 10369 (hit); 10279; 10189.
|
|
 Mexican Peso (Sept) - We believe we see enough improvement in the trading pattern to suggest that long entries can be initiated at a price level of 74150 or better. Stop protection for this long entry we believe should be intraday penetration of 72650. We will also keep the standing suggested long entry of a close above 76650. Stop protection for this closing basis long entry should be intraday penetration of 74625 or a close below 75550. We will be updating retracement levels after additional pattern development.
|
 British Pound (Sept) -
There is an active short entry from a few weeks ago when the price entered our suggested sell zone between 16366 and 16435. The high since this short entry was initiated has been 16620 and stop protection remains intraday penetration of 16668. We also believe that long entries can be initiated with a close above this level of 16668. If the long entry based on this closing level is elected stop protection should be intraday penetration of 16327. Retracement levels of support are approx.: 15822; 15559; 15297. The next series of retracement support levels below is approx.: 15528; 15179; 14830.
|
|
 S&P 500 (Sept emini) - There is an active short entry from the intraday penetration of 91625. Stop protection can be lowered to intraday penetration of 93175. New or additional short entries can be initiated with intraday penetration of 87950. Stop protection if elected on this new short entry should be intraday penetration of 90925. And new or additional short entries can be initiated with intraday penetration of 86825. Stop protection for this short entry with penetration of 86825 should be intraday penetration of 89725. Long entries can be initiated with a close above 95375. Stop protection for this closing basis long entry should be intraday penetration of 92775. Retracement resistance levels are approx.: 90975; 91800; 92525. Retracement levels of support are approx.: 88400; 86275; 84125. |
 Feeder Cattle (Aug) -
There is an active short entry from our suggested sell zone between 9910 and 10010. The high of the past week has been 9987. Stop protection for this short entry should be adjusted to a close above 10025 or with intraday penetration of 10072. We will be updating retracement levels after additional pattern development.
|
 Soybeans (July/Aug) - Last week we mentioned a sell zone between 1162 and 1172 which would not have been affected after the time we were able to transmit. The high the day we last wrote was 116275 some time after we prepared this section but before we would have been able to send to our clients and email subscribers. The short entry with intraday penetration of 111350 was elected however and stop protection should remain intraday penetration of 115300. Retracement resistance levels are approx.: 112970; 114420; 115850. Retracement levels of support are approx.: 111200 (hit); 108325; 105425. The next series beneath this is approx.: 106050; 101600; 97130.
|
 T-Bonds (Sept) - There is an active long entry from the close above 114-23 on June 15 (115-05). We believe that stop protection can be raised to intraday penetration of 11519. Retracement resistance levels are approx.: 118-26; 121-01; 123-08.5.
|
 Ten Year Notes (Sept) - There is an active long entry from the close of 114-26 on June 15. We believe stop protection can be raised to a close below 114-25 or with intraday penetration of 114-07. Retracement resistance levels are approx.: 115-22 (hit); 116-19; 117-16.
|
Archive
|
