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TRADE Focus
08/06/2009
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, August 5th, the market analysis section was written during the course of business on Thursday, August 6th.
We have seen too many instances lately of traders entering positions without a firm and direct cause let alone a map to follow. Initiating a position and figuring it out as the market is moving is a very dangerous proposition. Trading is not pot luck. It's a serious business. There is simply no reason to force a trade. This is one of the emotional aspects that we talk about frequently. The adrenaline can build up within the mind and even within the body that can overpower the use of better judgment. We know it can be difficult but we find it a far better idea to let the market force the action not adrenaline. And prior to the action of entering a position is put into place the plan should include stop protection and some method of realizing profit objectives. Each trade, as we have said before, is its own business and should be treated in a professional manner. We believe that trading success, in the long run big picture, is in the management and execution of the plan much more so than the trade ideas themselves. Anything can happen and usually does. It is because of this that being prepared with a full range plan that covers the possible contingencies is so important and when followed so beneficial to the grand scheme of how to be successful in trading endeavors.
Let's take a quick look at the economic news for this week. Employment figures are a major focus for the week so we will start with the ADP tally showing another 371,000 jobs lost during July. The government report is due Friday morning so it has yet to be released. The non-farm number is expected to show a drop of 328,000 jobs according to consensus figures we have seen. The expectation for the Unemployment Rate is 9.6%. By the time many read this on our website these unemployment figures will have been released. It is possible that there could be significant reaction to the report as we have noticed many analysts and advisories mentioning that several markets are at or near inflection points. When involved in any market or in any trade it is always best to be prepared. Good luck to all.
Finishing up with the reports, Construction Spending for June was a positive surprise showing a gain of 0.3% compared to an expectation for a decline of 0.5% and the previous month's actual decline of 0.8%. The July ISM index was stronger than expected as well with an index reading of 48.9 versus the consensus estimate of 46.5. The monthly Personal Income data showed a fall of 1.3% from the previous month but it had been expected to decline by 1.0 %, according to consensus guesstimates. Personal Spending on the other hand, rose 0.4% where a 0.3% increase was anticipated. Pending Home Sales for the month of June was much better than expected with an increase of 3.6% compared to the consensus 0.7% gain expected. Factory Orders for the month of June were also much better than expected with a reported 0.4% increase versus the estimate for a 0.5% decline.
Note: We are archiving the Traders Focus from here on so that those interested can follow more easily.
 SUGAR (OCT) - Sugar continued higher and came within 2 ticks of 2000 this week. This could be a psychological level but we have no suggestions at this time. We had previously suggested short entries could be initiated with a close below 1799 and with a close below 1670 but we will withdraw these at this time. |
 Silver (Sept) - Last week we suggested short entries could be initiated between 136200 and 137400. Orders to sell in that zone would have been elected as well as the suggested stop protection at intraday penetration of 141150. As we write this week silver made a new high for this upward move in which an old gap between 148000 and148400 has been filled as well as a significant retracement level of 147950 was exceeded prior to turning lower and closing beneath. The high of today has been 150350 and is now at 145300 as we are preparing this section. This appears to be a potential reversal of direction and we believe short entries can be initiated between 147200 and 147900. If elected, we suggest stop protection at intraday penetration of 150600. Another short entry approach would be with a close below 140850. Stop protection for this approach we suggest at intraday penetration of 144450. We believe at this time that if this is in fact a turn in this market that the July 13 low of 124350 will be tested and exceeded while on its way to its next objective near 114000. Retracement levels of support are approx.: 140420; 137350; 134280.
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 Gold (Aug/Oct) - There was a short entry suggestion in the August contract from a price level of 95800 that should have been rolled to the October at basis levels of 93650 and 93750 respectively. The stop protection for the October short entry would have seen its price elected as it penetrated 34970. We had another short entry suggestion at intraday penetration of 92570 which would not have been elected and which we believe can remain as a valid approach with stop protection at intraday penetration of 94380. We also believe that short entries can be initiated with a close below 94490. Stop protection for this suggested short entry would be a close above 96860. Retracement levels of support are approx.: 94760; 93970; 93190.
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 Euro Currency (Sept) - We believe that there is evidence that a turn lower is underway in the euro. We believe we can suggest short entries at a price level of 14350 or higher and if elected suggested stop protection at intraday penetration of 14461. Another short entry approach we believe valid to suggest is upon a close beneath 14064. If elected with this short entry approach we suggest stop protection at intraday penetration of 14311. If in fact our belief that the euro has made a turn lower we believe that the price is likely to retrace to the mid to low 13000's and potentially more in the longer term. Retracement levels of support are approx.: 14180; 14095; 14010. The next series below is approx.: 13851; 13665; 13479.
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|  Japanese Yen (Sept) - Last week we suggested that short entries could be initiated with a close beneath 10474. The close the day we wrote last on August 30 we show as 10464 (basis CQG). If short entries were initiated they would still be active as the suggested stop protection was intraday penetration of 10633 and the high since we last wrote has been 10604. We believe it would be more comfortable on the sidelines at this time as the response to our suggested entry did not progress as we believe it should have. The price we see as we are preparing this section is 10485. We would suggest liquidating this short entry as soon as possible but for our purposes knowing that readers will not see this until we first email later in the afternoon, we will go with lowering stop protection to intraday penetration of 10511 or 7:20 AM Central Time Friday August 7 prior to the release of the US unemployment data.
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 Mexican Peso (Sept) - Last week we suggested that long entries could be initiated with a close above 76050. This occurred with the close of 76350 on August 5. We believe that the suggested stop protection should remain at a close below 73950. There is a near term extension target at approx. 77675 and a potential price objective at this time of near 80000.
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 British Pound (Sept) -
We believe the action has demonstrated that short entries can be initiated at a price level of 16800 or above. We suggest stop protection for this short entry approach at intraday penetration of 17052. Last week we suggested short entries can be initiated with a close below 16298 which we would like to amend to a close below 16398 at this time. If this short entry approach is elected we suggest stop protection at intraday penetration of 16743. Retracement levels of support are approx.: 15957; 15617; 15278.
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 S&P 500 (Sept emini) - There is an active long entry from the July 21 close of 95350. It appears to us that a correction may be at hand and we feel the suggested stop protection should be raised to intraday penetration of 98575. We withdraw the previous suggested stop protection and short entry approach with intraday penetration of 95450 or a close below 96200. Particularly with the popularity of this market and its impact we will release a special notice if a new trade suggestion is warranted. Retracement levels of support are approx.: 95385; 93700; 92015. |
 Feeder Cattle (OCT) -
There is an active short entry suggestion from a price level of 10250. We believe suggested stop protection can be lowered to intraday penetration of 10332 or a close above 10292. Retracement resistance levels are approx.: 10155; 10220; 10285. Retracement levels of support are approx.: 9945 and then a series at approx.: 9864; 9670; 9476.
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 Soybeans (Nov) - Suggested short entries in a sell zone between 99000 and 101500 would have seen stop protection elected with intraday penetration of 103300. No additional suggestions at this time.
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 Wheat (Sept) -
Once again we find a suggested short entry have our suggested stop protection nicked. Last week we suggested short entries could be initiated between 53000 and 53550. This would have been elected this week as well as the suggested stop protection at intraday penetration of 55575. The high since we last wrote has been 55750. We show today's close at 50025. |
T-Bonds (Sept) and Ten Year Notes (Sept) - We remain uncomfortable with the pattern in these at this time. We will update as soon as we believe we can.
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