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TRADE Focus
07/09/2009
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, July 8th, the market analysis section was written during the course of business on Thursday, July 9th.
This week was quiet in terms of the standard U.S. economic news reports. In our last issue we waited until after the release of the government's June unemployment data to prepare this section because of its importance and the reaction of the markets proved that significance. Many analysts say that the focus for this economy has to be on jobs. We agree. Until further notice this factor will be so very crucial in evaluating the status of recovery from this recession. It seems to us rather simple. Fewer jobs mean less spending. Consumers make the economy go and the effects of the credit crunch and banking crisis left less money to spend putting more and more people out of work as the cycle progressed. Until there is stability in the labor market there will be difficulty in establishing the reasoning for genuine light at the end of the tunnel. The sell-off in stock prices and energy prices, as well as other markets since the disappointing unemployment report of July 2, we believe tells the tale. Coincidentally, we believe we see similarity that has developed in the Gold and Silver price pattern to that of the major stock indices. The Dow and S&P 500 have formed potential Head and Shoulders formations to which we believe a neckline is now in place. There is significance in the comparison to the Gold and Silver, and perhaps much more defined in the case of Silver. We view the Silver market, basis its daily chart, as having formed a picture perfect Head and Shoulders top breaching its neckline June 30 and confirming with its close of July 2. The indices have yet to confirm a neckline breach in our opinion although some may argue differently in the case of the Dow Jones Industrials. Regardless of individual interpretation we believe there is good reason to be alerted to this potential because these formations offer such a valuable tool toward market direction and subsequent price projections.
We often like to mention factors that came in to play for the week other than the scheduled monthly U.S. data. Earnings season was kicked off Wednesday with Alcoa reporting a more narrow loss than what was expected, according to sources. Discussion of the need for a second stimulus was at the forefront particularly early in the week. The problem with California 's budget deficit continues to be an issue and perhaps more so now with major banks having announced they will no longer accept its IOU's after a certain date. There are budget issues with other states as well and we have seen where there is concern that the stimulus effectiveness may be hindered by states' abuse or misappropriation of stimulus funds. The CFTC was in the news also as it announced intentions to limit positions in energy futures and eliminating the hedge exemption for commodity index funds. These matters, though they said, are to seek further discussion. Other items of interest are that the G-8 began Wednesday of this week and goes through Friday and a USDA crop production report is scheduled for early Friday morning.
Note: We are archiving the Traders Focus from here on so that those interested can follow more easily.
 Copper (Sept) - We are adding September Copper to our coverage this week. We believe that short entries can be initiated with either intraday penetration of 20850 or a close beneath 21225. Stop protection we believe should be intraday penetration of 22160. Retracement levels of support are approx.: 20189; 18807; 17426. |
 Cocoa (Sept) - Cocoa entered in to the sell zone described last week between 2640 and 2690. The high for the week and of today as we prepare this has been 2671. Short entries initiated in this zone we believe should maintain stop protection with intraday penetration of 2792. We also described last week another approach to short entry would be with intraday penetration of 2425 and if elected stop protection using intraday penetration of 2606. We continue to believe new or additional short entries can be initiated with this approach. Retracement resistance levels are approx.: 2589; 2640; 2691.
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 Silver (JULY/Sept) - There are a total of three active short entries two of which were initiated in the July contract. These two (from 158000 or above and from penetration of 138900) should roll to the September contract. Currently we show July 129240 and September at 129250 which we will use as our basis. Stop protection for these can be reduced to intraday penetration of 138700. We believe also that these short entries can be partially lightened at a price of 124000 or lower. The short entry in September from the neckline penetration of 135850 we believe should maintain stop protection at penetration of 144600 or a close above 141700. Retracement resistance levels are approx.: 133700; 135270; 137180. The next resistance series above is approx.: 138200; 141550; 144900.
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 Gold (Aug) - Short entries from the price level of 97800 or above did have an opportunity to reduce some positions as suggested three weeks ago in the 91750 - 91500 area with the low June 23 having been 91320. This week there was penetration through 91320 with a low at 90480. We believe stop protection for remaining short entries can be lowered to intraday penetration of 93620. Retracement resistance levels are approx.: 92150; 92670; 93200. The next series of retracement resistance above is now approx.: 93800; 94830; 95860.
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 Euro Currency (Sept) - The euro has been a back and forth affair for a number of weeks but has maintained above its 50 day moving average since late April. We believe that short entries can be initiated with a close below the 50 day moving average which for our purposes we will use a closing price below 13820. If elected into this short entry we believe stop protection can be intraday penetration of 13980. We do expect that there will be a move to a lower level that may initially target 13200 but with potential of the middle 12000's. However, there is a chance our interpretation is either too premature or just plain incorrect and that there could be another move toward or above the recent 14327 high. Retracement levels of support are approx.: 13777; 13605; 13433. The next series below this is approx.: 13633; 13417; 13201.
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|  Japanese Yen (Sept) - Once again our short entry consideration was proven untimely. In last week's edition we said that short entries from a price level of 10515 or above could lower stop protection to intraday penetration of 10553. This was elected as first a high of 10574 was seen on July 6 and then exceeded with a high of 10904 on July 8. We believe there is a good chance that this new recent high may have not only exhausted itself but also may turn out to be a high for some period of time. Unfortunately we believe we will need to see additional market action and development prior to a new suggestion. It's possible we could send out an intraweek update to our subscriber and client list if a scenario presents itself. Momentum indicators suggest overbought but not critically so.
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 Mexican Peso (Sept) - We raised our bid for a long entry last week to 74975 but not only was this elected but it also saw the stop protection at intraday penetration of 73175 exceeded with a low for the week at 72600. The immediate term picture for the Mexican Peso suggests that additional price pressure is likely. We will make no suggestion for short entry at this time but believe there is potential for lower prices in the near term.
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 British Pound (Sept) -
Last week we pointed to another possible daily reversal and suggested that short entries could be initiated with intraday penetration of 16178. This would have been elected as the low since then has been 15981. The reversal turned out to also be a small weekly reversal as well and our weekly momentum indicators coincide with this scenario. We believe we need to maintain the initial stop protection as intraday penetration of 16512. We now believe that new or additional short entries can be initiated with intraday penetration of 15940. If elected into this short entry we believe stop protection can be intraday penetration of 16190. We also suggested that long entries could be initiated with a close above 16752 and if elected stop protection with intraday penetration of 16422. We will stick with this scenario as well. Retracement levels of support are approx.: 15870; 15598; 15326.
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 S&P 500 (Sept emini) - This week there were 2 new or additional short entries elected. The first with intraday penetration of 87950 and the second with the intraday penetration of 86825. We are going to suggest that the stop protection for both these new short entries be moved to intraday penetration of 90725. The original short entry from the intraday penetration of 91625 we believe should maintain stop protection with intraday penetration of 93175 but if there is a close below 86525 basis the September Emini contract we believe that these stops can then be lowered to intraday penetration of 90725. Retracement resistance levels are approx.: 88900; 89650; 90400. The next series of resistance above is approx.: 89850; 90900; 91925. Retracement levels of support are approx.: 87925; 85600; 83300. The next series of support is approx.: 84250; 80800; 77350. |
Feeder Cattle (Aug/OCT) -
We are still following and waiting for more complete pattern development. We will, however, be rolling coverage to the October contract.
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 Soybeans (Aug) - Last week we suggested new short entry with a close below 111850. The close July 6 was exactly 111850 and the close July 7 was 105350. We will consider the close of 105350 as the entry level for this short position. Stop protection should be moved to intraday penetration of 112900 or a close above 112000. Three is a USDA Crop Production report the morning of July 10. Retracement resistance is approx.: 106370; 108430; 110470. The next resistance series above this is approx.: 107670; 110130; 112570.
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 Wheat (Sept) -
Last week we suggested that short entries could be initiated with a close below 52175 or with intraday penetration of 51250. Both were achieved and the closing basis occurred first which would have been the close of 51925 on July 6. The low for the week subsequently was 51200. Stop protection will remain intraday penetration of 55225 for now. USDA reports the morning of June 10. Retracement resistance levels are approx.: 53310; 53970; 54650. The next series of resistance above this is approx.: 56250; 57830; 59410. |
 T-Bonds (Sept) - There is an active long entry from the close above 114-23 on June 15 (115-05). We believe stop protection for this long entry can be raised to intraday penetration 116-17 or a close below 117-10. A new or additional long entry would have been initiated with the close above 119-06 (119-13.5) or with the intraday penetration of 119-19. Stop protection for this new or additional entry should be amended to either intraday penetration of 117-09 or a close beneath 117-20. Retracement resistance levels are approx.: 118-26 (hit); 1210-1 (hit); 123-08.5. Retracement levels of support are approx.: 1117-21; 116-16.5; 115-12.
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 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 intraday penetration of 116-03 or a close below 116-20. Retracement resistance levels are approx.: 117-06 (hit); 118-17.5 (hit); 119-29.
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