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TRADE Focus
07/30/2009
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 29th, the market analysis section was written during the course of business on Thursday, July 30th.
We can not emphasize enough the importance and value of discipline and patience. We believe that it makes the leverage afforded in futures trading work for the trader in the long run. Trading is a business and we believe that when broken down each trade itself can and should be treated as its own business. Holding on to winners and discarding losers is an old adage that we have heard from day one. It is though, one of the principles of trading that so often becomes abused. Too many market participants are afraid to take a loss. They hold on to losers and take winners early before they reach fruition, sometimes to finance losers. An owner of a chain of restaurants, for example, is unlikely to keep stores open that are losing money while closing the profitable ones. That isn't good business sense. It is the same in trading or at least it should be. A trading discipline will, however, have this faulty business practice accounted for. It will include knowing where the trade is wrong from the very start and institute risk or stop protection. It will also likely have a method for adjusting the risk protection as the trade matures. Patience will allow each trade to work according to its plan as well as in the bigger scheme allowing the trading method itself to work its course. We often see where a trader becomes so anxious wanting instant gratification from each position entered. This leads to cutting profits short. It often ends up combining with the other bad habit already mentioned and results with what is referred to as "eating like a bird and (expletive deleted) like an elephant."
Many have asked how to diligently exercise these attributes of discipline and patience in their trading. We find that trading with someone who is like minded when it comes to instituting and adapting these tenets can be very beneficial. It can be a trading partner, trading buddy or broker. These principles are not easy and left to one's own devices or normal human temptations and fears they can become more than just difficult to follow. The point is to somehow always be and to remain accountable for each and every trade. Having someone who can remind you, forcefully if necessary, is worth his weight in gold.
There was a fairly reasonable amount of economic news released during the week since the last Trade Focus. It appears that the over and under for favorable or unfavorable was just about 50 / 50. The housing sales reports were definitely on the favorable side. Existing Home Sales for the month of June came first and was slightly better than expected at 4.89 mln units and also compared favorably to the month of May which registered 4.72 mln. New Home Sales for June was an even more favorable report with sales of 384,000 units versus expectations of 352,000 and 346,000 reported for the prior month. The S&P/Case-Schiller Home Price Index showed that home prices were still in decline, falling 17.06 pct. for the month of May but that was better than the consensus estimate of minus 17.90 pct. and the previous report's decline of 18.10 pct. The unfavorable reports came in the form of July Consumer Confidence which registered a reading of 46.6 pct compared to estimates of 49.0 and the June report of 49.3. Also, the Durable Goods report for June was a disappointment, showing a drop of 2.5 pct. on the month versus minus 0.6 consensus estimate and +1.3 pct. in May. The other report of significance for the week to this point was the release of the Fed's Beige book. This comes out eight times a year and provides a look at economic conditions as reported by the various Federal Reserve District Banks. Headlines from this week's issue included: "Most districts see recession easing;" "Economy still weak;" "Most districts reporting sluggish retail activity;" "Manufacturing depressed but with signs of improvement;" "Residential real estate markets remain soft;" "Commercial Real Estate markets weakened further:" "Labor market extremely soft;" "Bank credit standards still high;" "Wages steady or falling in most districts;" and finally "Upward price pressures minimal." Still slated for the end of the week will be the first look at GDP for the 2 nd quarter where there is a consensus guesstimate of a 1.5 pct. contraction.
Note: We are archiving the Traders Focus from here on so that those interested can follow more easily.
 SUGAR (OCT) -
This market continued higher this past week. There is a possible target area we can calculate at approx. 1910 - 1925. We are not suggesting action at that point but believe those interested in being short this market that short entries could be initiated with a close below 1799. We will suggest stop protection as intraday penetration of 1904 but believe that if elected into the short entry that we will quickly amend this protection. We have also been suggesting short entries with a close below 1670 and we feel this can remain as a new or additional short entry. We suggest stop protection for this short entry could be intraday penetration of 1791. |
| Copper (Sept) - Still watching for further price and pattern development |
Cocoa (Sept) - Still watching for further price and pattern development
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 Silver (Sept) - There have been 3 active short entries with the first two of the three originating in the July contract from a price level of 158000 for the initial short entry and the second of the two with the penetration of 138900. These were rolled to the September contract at a price of 129250. The third was initiated in the September contract with neckline penetration of 125800. The suggested stop protection of a close above 137100 on all short entries was elected with the close of 137700 on July 23. Our suggestion of a few weeks ago that some short entries could be lifted at 124000 came close as the low for the move was 124350. We also mentioned a sell zone between 143300 and 147800 where short entries could initiate. The high since we last wrote was only 140950 falling shy of the sell zone from last week between 143300 and 147800. It appears to us that the pattern suggests the downward move may have restarted. We believe that short entries can be initiated in a sell zone between 136200 and 137400. Suggested stop protection if elected we suggest intraday penetration of 141150. Another approach we can suggest for short entries is intraday penetration of 131500. If elected via this approach suggested stop protection would be intraday penetration of 135950. Near term retracement resistance levels are approx.: 136220 and 137400. The next series above is approx.: 138900; 143420; 147950.
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 Gold (Aug/Oct) - Last week we suggested short entries could be initiated at a price level of 95800 or above. The high since we last wrote has been 96000. These short entries can now be rolled to the October contract. The August is currently 93650 and the October is 93750. We will use these as our basis. Suggested stop protection for the October short entry we believe should be intraday penetration of 34970. New or additional short entries can be initiated in the October contract with intraday penetration of 92570. If elected in to this short entry suggested stop protection would be intraday penetration of 94380. Near term retracement resistance levels are approx.: 93970; 94380; 94790.
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 Euro Currency (Sept) - The euro may be in position to turn over to the downside and we believe we can suggest short entries with intraday penetration of 13984. If elected into this short entry suggested stop protection would be intraday penetration of 14127 or a close above 14078.
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|  Japanese Yen (Sept) - Last week we said that we believed the pattern that had developed would lead to lower prices and suggested short entries could initiate at a price level of 10550 or above with stop protection suggested at intraday penetration of 10633. The high since last week's issue has been 10641 meaning both the short entry and stop protection were elected. The pattern continues to indicate a move to lower prices and we believe that short entries can be initiated with a close below 10474. If elected in to this short entry we suggest stop protection at intraday penetration of 10646. The near term retracement levels of support are approx.: 10403 and 10284.
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 Mexican Peso (Sept) - The Mexican Peso has moved sideways over the course of the last week and remains back above its 50 day moving average. We believe that a close above 76050 would indicate a continuation to higher price levels and believe we can suggest that long entries can initiate on a close above 76050. If elected into this long entry suggested stop protection would be a close below 73950.
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 British Pound (Sept) -
Last week we suggested short entries could be initiated with a close below 16198. We will amend this short entry approach to a close below 16298 at this time. If elected in to this short entry suggested stop protection would be intraday penetration of 16632. Retracement levels of support are approx.: 15870; 15598; 15326.
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 S&P 500 (Sept emini) - There is an active long entry from the July 21 close of 95350. We believe the suggested stop protection can be raised to a close below 96200 or intraday penetration of 95450. We believe also that short entries can be initiated based on those same stop parameters for the long entry. Therefore, short entries we suggest can be initiated with intraday penetration of 95450 or a close below 96200. If elected suggested stop protection for the short entry would be intraday penetration of 98525. There is a retracement resistance level at approx. 10675. There is an extension target at approx.: 101025. We will update retracement levels of support as the pattern allows. |
 Feeder Cattle (OCT) -
Last week we suggested short entries could be initiated at a price level of 10250 or above and if elected suggested stop protection would be intraday penetration of 10492. The high since we last wrote has been 10320 therefore the short entry would have been initiated. Suggested stop protection can be lowered to intraday penetration of 10392 or a close above 10357. Retracement levels of support are approx.: 10150; 10045; 9945. The next series below is approx.: 9864; 9670; 9476.
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 Soybeans (Aug) - The active short entry from 105350 initiated on the July 7 close would have seen suggested stop protection elected with intraday penetration of 107275 this week. We will be rolling coverage now to the November contract. We believe short entries can be initiated in a sell zone between 99000 and 101500. If elected in to this short entry suggested stop protection should be intraday penetration of 103300. Retracement resistance levels are approx.: 99010 and 101575.
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 Wheat (Sept) -
There are no active suggested entries after the recent short entry saw stop protection exceeded by only 1 ½ cents the previous week. We believe short entries can once again be initiated within a sell zone of 53000 and 53550. Suggested stop protection if initiated into this short entry should be intraday penetration of 55575. Near term retracement resistance levels are approx.: 52950 and 53625. |
T-Bonds (Sept) - We are seeing what we feel are conflicting patterns at this time.
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Ten Year Notes (Sept) - Same as in the T-Bonds we believe the pattern to be conflicted.
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