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TRADE Focus
08/13/2009
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
Both the Trade Focus commentary and the market analysis section were written during the course of business on Thursday, August 13th.
We have talked many times about, and in fact it is a recurring theme for us, that success in trading is in the management and management process, with all it entails, more so than the actual position long or short that is taken. We are frequently asked, as is any broker, what a specific market is going to do. It seems like such a simple question and why wouldn't a broker "know?" We believe the fact is that it is not a simple question. There are a number of variables and variations on the theme of any given trade. One that comes to mind immediately is the time consideration. Over what period of time is this question related to? Traders and market participants enter positions with outlooks that consider many different time frames. Some trade for a day or periods within a day. Others may view the market over a period of weeks, months or years. And, we could buy something at the exact same time and price another trader sells, but the result could be that these positions either win, lose, break even, or any combination thereof. The result will be determined by how the position is managed over a particular time parameter. Another thing to consider is that if every market participant was bullish there would be no one to sell to and there would be no market. Traders have opinions based on their set of rules and guidelines, which may include gut feelings. Different sets of rules, guidelines and time parameters may lead to different market opinions and result in different market positions. Success will be determined by what happens after the position is initiated, or as we might say "once you own it."
The FOMC met this week and the results were not earth shaking or far from expectations but seemed to provide enough information to maintain the optimism that has been displayed in stock prices. The statement released following the meeting's conclusion said that the target rate would remain unchanged at 0 to .25 pct. while reiterating its mantra keeping rates low for some period of time. The Committee members indicated that since the last meeting in June that "economic activity is leveling out" seeming to suggest to market participants that the Committee's perception is that economic conditions are on more steady ground. This also appears to have left the impression to many that the recession is seeing light at the end of its long deep tunnel.
The USDA released its monthly crop production report which held no major surprises to the market. Basically the government estimates were neutral to friendly for the soybeans while neutral to negative toward wheat and corn. The production estimates released were near the high end of analyst estimates for corn, above the average estimate for the wheat and below the average estimate in the case of the soybeans.
There has been other economic news that has been released since our last Trade Focus of interest and impact to the markets. First and foremost is last Friday's monthly U.S. Unemployment data. Non-Farm payrolls declined by a less than expected 247,000. And the unemployment rate actually declined to 9.4 pct versus the expectation for a rise to 9.6 pct. This week the Productivity report showed a remarkable 6.4 pct jump compared to a 5.5 pct expected rise and the previous quarter's increase of 0.3 pct. Trade balance data was somewhat more favorable than expected too at minus $27.0 bil compared to the consensus estimate of $28.7 bil. On the disappointing side of the news was the Retail Sales report which registered a 0.1 pct decline where a 0.8 pct increase was expected. Tomorrow (Friday) brings CPI data and Industrial Production.
Note: We are archiving the Traders Focus from here on so that those interested can follow more easily.
 SUGAR (OCT) -
We have retracement resistance levels based on the monthly data that may be of interest. The first series that applies is approx.: 1889 (hit); 2402; 2915. The next series above is approx.: 2663; 3414; 4166.
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 Silver (Sept) - Last week we pointed to what appeared as a reversal to the downside. The market did sell off to as low as 141250 but quickly turned upward pulled in a large part we believe by the stock indices as well as a sell off in the US Dollar. Needless to say the suggested short entries between 147200 and 147900 saw stop protection elected with the overnight move above the stop protection level of 150600. The high has been 151450 and is now 149700 as we prepare this section. We believe we can stay with the suggested short entry with a close below 140850 utilizing suggested stop protection of intraday penetration of 144450. We will update retracement levels as soon as the market allows.
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 Gold (Oct) - We believe we can stick with the short entry approach with intraday penetration of 92570. Stop protection is suggested with intraday penetration of 94380. Today's high of 96200 is just slightly above a short term retracement level of significance formed with the move down from its recent 97270 high to this week's low. Therefore we believe that a short entry approach could be initiated from a price level of 95940 or above and if elected utilizing stop protection with intraday penetration of 97330. The short term retracement resistance levels are approx.: 95300 (hit); 95680 (hit); 96960 (hit). Retracement levels of support are approx.: 94760 (hit); 93970; 93190.
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 Euro Currency (Sept) - Last week we said that we believed a turn lower was underway in the euro currency and that short entries could be initiated at a price of 14350 or above utilizing stop protection at intraday penetration of 14461. The high since we wrote that was made August 7 at 14419 allowing for the suggested short entry to be initiated. The current price as we prepare this section is 14265. We also suggested last week an additional short entry approach with a close below 14064. We believe this remains a valid approach but will amend the suggested stop protection to intraday penetration of 14333. We also believe that new or additional short entries can now be added in a zone between 14265 and 14310. If entering with this approach we suggest stop protection at intraday penetration of 14461. Retracement levels of support are approx.: 14180; 14095; 14010. This is followed be a series at approx.: 13851; 13665; 13479.
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| Japanese Yen (Sept) - Last week we said that suggested short entries from the close below 10474 should be liquidated as soon as possible because the position had not progressed as we felt it should. For practical purposes and the purpose of a publication, though, we realized we would need to choose a reduced protection price which we amended to stop protection at intraday penetration of 10511 or to exit prior to the Unemployment report that next morning. The overnight high prior to the report was 10525 electing the protection. The pit opening price of that day, August 7, was 10485. We have no new suggestions at this time.
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 Mexican Peso (Sept) - There is an active long entry from the close of 76350 on August 5. We believe stop protection can be raised to intraday penetration of 75425.
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 British Pound (Sept) -
Last week we suggested short entries could be initiated at a price of 16800 or above. The high since we wrote has been 16835 electing this short entry suggestion. We believe that stop protection can be reduced to intraday penetration of 16845. We also suggested a short entry approach could be initiated with a close below 16398. We believe this remains valid but with an amended suggested stop protection of intraday penetration of 16692. We are updating retracement levels of support to approx.: 16057; 15749; 15442.
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 Canadian dollar (Sept) - We believe that the Canadian Dollar may have begun a turn downward from its several month upswing. We believe that short entries can be initiated in a zone between 9215 and 9260. If elected we believe stop protection can be intraday penetration of 9415. Retracement levels of support are approx.: 9076; 8972; 8868. The next series beneath is approx.: 8760; 8557; 8355. |
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 S&P 500 (Sept emini) - There is an active long entry from the close of 95350 on July 21. We have suggested stop protection at intraday penetration of 98575. The low of this week has been that exact price. It was not penetrated but some may interpret a trade at that price as penetration. If still long based on our suggested entry approach we believe the stop protection should remain as intraday penetration of 98575. Retracement levels of support are approx.: 95850; 94075; 92300. |
 Feeder Cattle (OCT) -
There is an active suggested short entry from a price level of 10250. We believe stop protection can be lowered to intraday penetration of 10262 or a close above 10222. Retracement resistance levels are approx.: 10155; 10217; 10282. Retracement levels of support are approx.: 9865; 9670; 9475.
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Soybeans (Nov) - There are no active suggested entries at this time and no new suggestions to add.
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| Wheat (Sept) -
There are no active suggested entries with no new suggestions here either at this time.
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 T-Bonds (Sept) - We believe that we can suggest long entries can be made with intraday penetration of 119-10. Stop protection if elected we suggest intraday penetration 117-07. The initial objective if elected we believe will be in the area of 124-00. We will update retracement levels as soon as the pattern allows.
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 Ten Year Notes (Sept)- We believe a long entry can be suggested with a close above 117-16. If elected we suggest stop protection at intraday penetration of 115-31. |
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