TRADE Focus

08/27/2009

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 on Wednesday, August 26th and the market analysis section was written during the course of business on Thursday, August 27th.

We believe that without a doubt an incredibly important aspect of trading is the psychological and emotional conditioning of the individual trader. We haven't talked about this directly for a while and thought it deserves some attention. It is something that should be obvious but unfortunately often falls prey to denial. Trading markets of whatever kind involves real money and this has its effects on most people. There are some, that small percentage, that can separate the dollars and cents from the thought process in their trading. Most people, we believe, simply can not. Human nature is human nature and is a powerful influence. We have often brought attention to this and said that the more that human nature can be separated from the making of trading decisions the better. Since real money is involved and the accumulation of it the goal, objective and reward, most participants can't help but feel the effects of either positive or negative price movement. We have had the experience of that "Tazmanian Devil-like" feeling inside of us and know others have too.

It is easy to understand how holding a losing position can weigh on the psyche, but most traders will also suffer emotional stress of some sort while holding a winning position. Sometimes it can be over exuberance or giddiness if things are going quite well but there can easily be a strong sense of nervousness too, worrying that a winner will turn the other way and the fear that the position won't be cashed in at the top. This just might be an ego issue as much as anything else, but nevertheless it usually results in exiting a winning position too early and it certainly causes deviation from the original trading plan.

Consider how having to make decisions in general can cause consternation let alone decisions that involve when to pull the trading trigger.

Since emotions can influence trading decisions, usually adversely, and because the effects can also be psychologically overbearing, we feel it is wise for traders to have some way to address this as part of their overall plan. Clear thinking is required for this business of trading markets, therefore doing whatever it takes to maintain sound emotional conditioning makes perfect sense to accept as part of the plan. It will be different things for different people but there usually needs to be a training regimen for this or at least a release of some sort. It can be reading literature on this subject, exercise, yoga, meditation, taking a break from time to time or some combination of all these. The point is to be prepared to do what is necessary to stay in top mental trading condition. Pay attention to this detail is our strong suggestion. We believe it is something that too many trading participants fail to realize and fail to do.

Note: We are archiving the Traders Focus from here on so that those interested can follow more easily.

SUGAR (OCT) - Nothing new to comment here. Retracement resistance levels based off the monthly data remain approx.: 1889 (hit); 2402; 2915. The next series above is approx.: 2663; 3414; 4166.

Silver (Sept/DEC) - The previous suggested short entry in the September contract from the Aug. 17 close of 138200 would have seen the stop protection elected with intraday penetration of 144550. The high for the bounce off the 134950 low has been 144700. It is time to roll coverage to the December contract at this time. We do believe that there is potential to the 115000 area and that short entries can be initiated with a close below 137400 basis the December contract. Stop protection for this suggested short entry we believe should be a close above 145200. There are near term retracement resistance levels at approx.: 145700 and 148200. Retracement levels of support are approx.: 125800 and 117000.

Gold (Oct) - There is an active short entry suggestion from a price level of 95940. Suggested stop protection remains intraday penetration of 96310. There is also a suggested short entry approach still working. This is to initiate a short entry with intraday penetration of 92870 or a close below 92990. Stop protection for this approach we believe should remain as intraday penetration of 94970 or with a close above 94280. The market continues to coil and we will be updating retracement levels as soon as new developments take place.

Euro Currency (Sept) - During the past few weeks there have been two different suggested short entries that could have been initiated. They are from a price level of 14350 or above and a sell zone between 14265 and 14310. We believe stop protection for both of these short entries should remain as intraday penetration of 14461. We have also suggested another short entry approach which we believe remains valid which is a close beneath 14064. Stop protection for this approach if elected should be intraday penetration of 14333. Retracement levels of support are approx.: 14180 (hit); 14095 (hit); 14010. The next series below is approx.: 13851; 13665; 13479.

Japanese Yen (Sept) - There is an active suggested short entry from a price level of 10625 or higher. The suggested stop protection remains intraday penetration of 10772 or a close above 10751. Japanese elections are being held Sunday and may cause a period of volatility to follow. Retracement levels of support are approx.: 10522; 10404; 10284. Retracement resistance levels will be updated when a change in the pattern parameters allows.

Mexican Peso (Sept) - was an active long entry from the close of 76350 on August 5. The suggested stop protection would have been elected with the intraday penetration of 75425.

British Pound (Sept) - First of all we need to correct an entry suggestion from this section made last week. In the edition of August 13 we had suggested new or additional short entries could be initiated with a close below 16398. This would have been elected with the 16338 close of August 17. Somehow are data viewer missed this last week and amended the entry to a different level. The correct new or additional suggested entry should be the close of August 17 at 16338 and not a close below 16460 as made in the August 20 edition. We apologize for this editorial mistake. OK now continuing with the review we note that there still is an active suggested short position initiated from a price level of 16800 or above which was triggered August 7. We believe that stop protection can now be lowered to intraday penetration of 16640 or a close above 16502 for both of the suggested short entry approaches. Short term retracement resistance levels are approx.: 16488; 16594; 16700. These may change quickly as a new low below 16152 will likely affect that necessity. Retracement levels of support are approx.: 16057; 15749; 15442.

Canadian dollar (Sept) - Short entries from a zone between 9215 and 9260 would have seen stop protection elected with the intraday penetration of 9306. The high of the week since we last wrote was 9330 before dropping back down to 9072. However, the current price as we prepare this section is 9207. A new approach for a suggested short entry would be with a close below 8975. If initiated into this short entry suggested stop protection would be intraday penetration of 9242. Retracement levels of support are approx.: 9076 (hit); 8972; 8868. The next series beneath this is approx.: 8760; 8557; 8355.

S&P 500 (Sept emini) - A new suggested long entry would have been elected with the 102525 close of August 21. We believe stop protection can be raised to intraday penetration of 99325 or a close below 100275. Active extension targets are approx.: 104500; 106800; 108500. Retracement levels of support are approx.: 97275; 95225; 93175.

Feeder Cattle (OCT) - There remains an active suggested short entry from a price level of 10250. We believe that stop protection can be lowered to intraday penetration of 10122 or a close at or above 10075. Retracement levels of support are approx.: 9865 (hit); 9670; 9475. We will suggest at this time that a reduction of short entry positions be considered at or below 9525.

Soybeans (Nov) - We believe it is best to withdraw our suggested short entry approach from last week. Indicators have actually turned to a more bullish posture. We will try to be patient and allow for some additional pattern development.

Wheat (Sept) - Last week we failed to note a change to following the December Wheat contract. The suggested short entry still applies for this week and would not have been elected. We believe short entries can be initiated at a price of 53400 or above. We suggest stop protection for this suggested short entry approach should be intraday penetration of 55900. Retracement resistance levels are approx.: 52300; 53475; 54675.

T-Bonds (Sept) - There is an active suggested long entry in the September contract from the intraday penetration of 119-10. It is time to roll our coverage and this position to the December contract. The current price of the September contract is 120-12 and the December is at 119-05. We will use these prices as our basis. For the suggested long entries in the December contract from 119-05 we believe stop protection should be a close at or below 116-23. New or additional long entries can be initiated with intraday penetration of 120-02. Stop protection if elected into this new long entry approach we believe should be intraday penetration of 118-19. Near term retracement levels of support are approx.: 117-16; 116-24; 115-31.5.

Ten Year Notes (Sept)- It is time to roll our coverage to the December contract. There is an active long entry in the September contract from the August 17 close of 117-24. This should be rolled to the December contract. The September is currently 117-27.5 and the December contract is currently 116-16.5. We will use these as our basis. Stop protection for the suggested long December contract from 116-16.5 we believe should be a close at or below 115- 09. Near term resistance levels of support are approx.: 115-20; 115-05; 114-22.5.

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