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 15th, the market analysis section was written during the course of business on Thursday, July 16th.
This week there is quite a bit of economic news to report. The inflation gauges of PPI and CPI for the month of June were released with the headline PPI showing a 1.8 pct increase over the past month. This was much above both the 0.9 pct increase that was expected and the 0.2 increase indicated in the report for the month of May. Core PPI was up a more modest and reasonable 0.5 pct. against a 0.1 pct expectation and this compared to the minus 0.1 pct reported for May. CPI showed a headline jump of 0.7 pct. versus the expected 0.6 pct and 0.1 pct increase for May. The core numbers were as follows: up 0.2 pct versus 0.1 pct expected and 0.1 pct for May. Retail sales figures were also out since last week's Trade Focus and the June numbers showed a 0.6 pct. gain over May versus only 0.4 pct expected and a 0.5 pct month on month gain reported for May. Excluding autos, retail sales for June rose by 0.3 pct versus expectations for 0.5 pct increase and compared to a 0.4 pct month on month gain in the month of May. There was also the New York Empire Manufacturing Index which although still a negative reading at minus 0.55 beat the expectations of minus 3.0 and compared to the previous month's report of minus 9.41. Industrial Production for June showed a 0.4 pct. decline which was better than the minus 0.6 pct. that was expected and the minus 1.2 pct. that was reported for the month of May. The Capacity Utilization numbers were somewhat boring in that they were very much as expected coming out as 68.0 pct. versus the expected 67.9 pct and compared to the revised 68.2 pct from May. The last notes of importance we want to include are the minutes from the last FOMC meeting which were released Wednesday afternoon. The minutes revealed that Federal Reserve officials see an end to the recession "before long" as it was reported while they also raised their forecast for the economy in 2009 / 10 to a range of -1.5 pct to -1.0 pct for 2009 and plus 2.1 pct to 3.3 pct in 2010. They did though indicate that the economy "remains vulnerable to shocks." The target range was held steady "given their forecasts for only a gradual upturn in activity and the lack of inflation pressures." Regarding the labor market however, the feelings are not yet upbeat as the minutes showed their forecasts for unemployment fall in a range of 9.6 - 10.5 pct. The June jobless report showed unemployment at 9.5 pct. They also maintain the current asset purchase programs unchanged at $300 million for long term treasuries and $1.45 trillion for mortgage-linked securities. And one final mention for us from the minutes is the view that "underlying financial conditions remained fragile." Perhaps this week's events with CIT are such an example.
Something we believe worth commenting on is the aspect of second guessing. There may be several forms of this but what has been triggered during the course of the past week is the type in particular where a position that meets the specifications is not initiated because of a "feeling" that it is not right. In general, though, as we have been heard to say, a trade is only a trade. If a situation in a market that meets the qualifications does present itself there is no need second guessing it. We have talked about traders developing a checkdown system much like that of a quarterback and when the pieces add up to pulling the trigger then there is no reason not to make the trade. The risk protection should be known from the very onset and the percentages are supposed to work in favor of following the signal. That is why the risk reward has been predetermined and that is why failing to take the signal will most likely, in the long run, end up working against you. Noone can know the next tick with absolute certainty. If the analysis determines to sell on a rally at a certain price, for example, with all conditions of the checkdown in agreement then it is time to pull the trigger. It happens frequently enough where a market looks its hottest at the very high or its worst at its bottom. Saying it almost makes it sound so very obvious. We can think of some prime examples in agricultural markets in particular where the cash market situation was on absolute fire the day the high was made in the futures. Unless there is an extreme situation such as a natural disaster affecting a particular market or all markets are affected in some way where the prudent thing is to simply not trade then we can see no reason not to follow that which has been determined before hand to do. The purpose of the checkdown is to take the second guessing out of the equation. It follows a logic. If certain conditions exist then a trade is made. We heard it said a number of years ago by someone who we have always had a great deal of respect for "let the market force you to make the trade." We find a lot of sense in that.
 SUGAR (OCT) -
This market has had a very strong rally over the course of this year so far but we believe that a close below 1670 would provide a signal for a move of some length to lower levels. We believe that short entries can be initiated with a close below 1670 or intraday penetration of 1649. Stop protection should be taken with intraday penetration of 1811. Retracement levels of support are approx.: 1635; 1581; 1528. |
| Copper (Sept) - Last week we added copper to our coverage and were looking at short entries with either intraday penetration of 20850 or with a close below 21225. Neither of these occurred while the market forged a new push upward. We will withdraw this short entry approach at this time. |
 Cocoa (Sept) - There is an active short entry from two weeks ago which could have been initiated in the sell zone between 2640 and 2690. We believe stop protection should be amended to intraday penetration of 2792 or a close above 2755. New or additional short entries can still be initiated with intraday penetration of 2425 with stop protection at intraday penetration of 2606. Near term retracement levels of support are approx.: 2628; 2589; 2551.
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 Silver (Sept) - There are a total of three active short entries two of which were initiated in the July contract. One at a price of 158000 and the other from its penetration of 138900. These should have been rolled to the September contract last week according to our basis prices of 129240 for July and 129250 for September. We suggested that these short entries originating in the July contract could be lightened at a price of 124000 or lower. The low for the week has been 124350. We believe stop protection for these can be lowered to intraday penetration of 138700 or a close above 137100. The other short entry was initiated when the September penetrated its Head and Shoulders neckline at 135800. We believe stop protection for this entry should be lowered to the same as the others at intraday penetration of 138700 or a close above 137100. Retracement resistance levels are approx.: 131520; 133770; 136030. The next series above is approx.: 138900; 143420; 147950.
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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 four weeks ago in the 91750 - 91500 area with the low June 23 having been 91320. Any remaining short positions would have seen our suggested stop protection elected this week with intraday penetration of 93620. The high this week as we are preparing this has been 94230.
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 Euro Currency (Sept) - Last week we suggested that short entries could be initiated with a close below the 50 day moving average. This has not yet occurred. In fact there has been a move somewhat higher which does not appear ready to call completed. There could be an extension higher and therefore we can suggest that long entries can be initiated with a close above 14341. Stop protection we will suggest be intraday penetration of 14127. We will also stay with the previous short entry initiated with a close below the 50 day moving average which over the course of the next week we will use a close below 13899. Stop protection for this short entry if elected we will suggest intraday penetration above 14083.
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| Japanese Yen (Sept) - We believe that there remains more to develop before we can commit to new ideas.
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 Mexican Peso (Sept) - We believe that a sell zone now exists between 73750 and 74250 where short entries can be initiated. Stop protection we believe should be intraday penetration of 75225. Retracement resistance levels are approx.: 73450; 74075; 74675.
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 British Pound (Sept) -
Short entries from the intraday penetration of 16178 we believe need to maintain stop protection with intraday penetration of 16512. New or additional short entries can be initiated with a close beneath 16100. If elected, stop protection for this short entry should be intraday penetration of 16392. Retracement levels of support are approx.: 15870; 15598; 15326.
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 S&P 500 (Sept emini) - All three short entries saw stop protection elected this week. The original entry was from intraday penetration of 91625 and its stop protection was intraday penetration of 93175. The newer short entries were from intraday penetration of 87950 and 86825 respectively. Both had stop protection with intraday penetration of 90725. At this point we believe that a close above 95325 should be used for long entries with stop protection at intraday penetration of 91875. We will update retracement levels as soon as additional development allows. |
Feeder Cattle (OCT) -
action does not allow for suggestions from us at this time.
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 Soybeans (Aug) - The short entry from the 105350 close July 7 should lower stop protection to intraday penetration of 107275 or a close above 105375. We suggest that short positions from this entry can be lightened at a price of 94000. There are active extension targets of approx.: 95800 and 93550.
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 Wheat (Sept) -
Three is an active short entry from the close of 51925 on July 6. We suggest stop protection should remain intraday penetration of 55225. The high this week was 54900. The first series of retracement resistance levels of approx.: 53310; 53970; 54650 were all hit. The next series above is approx.: 56250; 57830; 59410. |
 T-Bonds (Sept) - There were two long entries active. The suggested long entry from the close of 115-05 June 15 saw its stop protection elected with intraday penetration of 116-17. The suggested long entry from the July 7 close of 119-13.5 saw its stop protection elected with the intraday penetration of 117-09.
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 Ten Year Notes (Sept) - The suggested long entry from the June 15 close of 114-26 remains active and its stop protection should be amended to read intraday penetration of 116-03 or a close beneath 116-13.5. Retracement levels of support are approx.: 116-20; 115-28.5; 115-05.5.
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