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The Trade Focus commentary was written on Wednesday, October 14th and the market analysis section was written during the course of business on Thursday, October 15th.
We had a friend in the business that used to say that there are thousands of trading systems out there including "gut feeling," and they are all good if they are worked properly. The point he was making was that whatever the system or method might be it needs to be managed under a set of rules. Without them there is a small chance of obtaining positive results.
Something else he stressed was the importance of how trades or positions are exited. He would often speak of and use as an example a very large and successful bond trader who had told him that once he had his position of many many contracts established that his process of liquidating would find sixty percent of the position breaking even with the remaining forty percent split between winners and losers. Most people he told this to were amazed because those percentages do not appear to be the type that would produce such a successful trader. The point is that this particular trader developed a set of trading rules that worked for him and he remained disciplined to them.
A trading system or method is more than just entering or initiating a position. It is a process with a set of rules that provides criteria for action. There is never a need to force a trade because of a feeling or a particular thought. The market and market action will determine if that feeling has validity and if it dictates action be taken. This includes entering, exiting and the trade management in between.
 Natural Gas (Nov.) - Both of the suggested long entries have seen the stop protection price levels elected. The stop protection was intraday penetration of 4369 or a close at or below 4459 for the original suggested long position from a price level of 4025. Some may have reduced quantity in the 4550 area which we addressed in previous editions. The second suggested new or additional long entry was from intraday penetration of 4830 and had suggested stop protection at intraday penetration of 4540 or a close at or beneath 4588.
We believe we can suggest another long entry can be initiated at a price level of 4500 or lower. Stop protection for this we believe can be intraday penetration of 4270 or a close at or beneath 4340. Retracement levels of support are approx.: 4305 and 4113. We realize that the November contract will expire at the end of October but we believe it best to initiate this position in this contract month. If fortunate we will be glad to advise when to roll. |
SUGAR (Mar) -
Since we last published sugar did make another leg down to as low as 2118 where it stopped abruptly. It has moved to as high as 2392 which is today's high as we prepare this section. There appears to us to be a reasonably good chance that new highs will be made above the previous 2627 of September 1 but we are not that confident and comfortable enough at this time to suggest an entry.
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 Silver (DEC) - There was a suggested short entry from the close of 168800 on September 21 the last time we published on September 30. The suggested stop protection of intraday penetration of 172000 was elected on this market's rise to 181750. We will suggest at this time both a long entry approach and a short entry approach. We believe we can suggest that a long entry can be initiated with intraday penetration of 182300 or with a close at or above 181850. Stop protection for this approach we suggest intraday penetration of 176850 or a close at or below 177900. We believe a short entry approach that we can suggest is with a close at or below 164900. Stop protection for this suggested short entry approach we believe can be intraday penetration of 171100. Retracement levels of support are approx.: 160030; 153320; 146620.
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 Gold (Dec) - We are curious about the action over the past few days in the Precious Metals and Gold in particular. Unlike the silver, though, we do not see a viable short entry approach quite yet. However, a long entry can be initiated with intraday penetration of 107550 or with a close at or above 107330. Stop protection for this approach we believe should be intraday penetration of 104930 or a close at or below 106450. Retracement levels of support are approx.: 103820; 102770; 101720. The next series below this is approx.: 101680; 99980; 98280.
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 Euro Currency (Dec) - In our last edition we spoke of the key reversal that occurred Sept. 23 and suggested a short entry approach from a price level of 14719 that would have been elected. The suggested stop protection of intraday penetration of 14856 would have been elected on October 14 as well. There was also a second short entry approach with intraday penetration of 14517 that would have been elected and its stop protection at intraday penetration of 14692 was likewise exceeded. We have no new suggestion in the euro currency at this time but note that the number of up waves in this current pattern suggest a top of some sort, interim or longer, may be near.
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Mexican Peso (Dec) - A suggested short entry approach from intraday penetration of 72750 had been elected but has seen the suggested stop protection subsequently elected with the intraday penetration of 74725. We have no new suggested approaches to offer this week. |
 British Pound (Dec) -
The suggested short entry approach which has been active for a few weeks now saw its suggested stop protection elected with today's surprise surge of more than 300 points. The suggested short entry was from the September 18 close of 16271. In our last edition (Sept.30) we moved the stop protection to break even at intraday penetration of 16271 which was hit today. This upsurge has placed the price back above the neckline of its Head and Shoulders top. We will watch for further developments.
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 Canadian dollar (Dec) - It appears that the Canadian Dollar is in the process of making a key reversal. We believe short entries, therefore, can be initiated with a close at or below 9579. Stop protection for this short entry should be intraday penetration of 9806. Retracement levels of support are approx.: 9534; 9450; 9366. The next series beneath this is approx.: 9318; 9169; 9021. |
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 S&P 500 (Dec) - A suggested short entry from the price level of 105000 following the key reversal back on September 23 would have seen stop protection elected with intraday penetration of 107900. The next level that may serve as an objective is the .500 retracement from the October 2007 high to the March 2009 low which is approximately 112625. |
 Feeder Cattle (OCT) -
In our last edition September 30, the October Feeder Cattle contract had made a key reversal to the upside. There had been a suggested short entry from the price level of 10250 that was active. We suggested then that participants exit at the market on the open of October 1 which would have been 9605. We also realize that there are those who are not clients or on our subscription list and would not receive our Thursday afternoon September 30 email of Trade Focus and therefore would not have the suggestion to liquidate on that Friday's (Oct.1) open. For those who would have to wait until after Trade Focus is posted on our website ( www.cbandsbrokerage.com ) which would not be until later on that Friday, we suggested lowering stop protection to intraday penetration of 9722. This stop protection, as it turns out, was not elected. If there are followers remaining in this suggested short entry we now suggest lowering stop protection to intraday penetration of 9512. This contract expires October 29 and will either be rolled or liquidated.
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 Soybeans (Nov) - There have been two long entries that would have been elected since the last edition on September 30. The first with the intraday penetration of 94400 and the second with the close at 96400 on October 9. We suggest that stop protection for both long entries be with a close at or below 95600. Retracement levels of support are approx. 96125; 94550; 92950.
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 Wheat (Dec) -
There is a suggested long entry active with the intraday penetration of 48550. We see that the high since entry has been 52900 right at the .618 retracement resistance level of 52930. Some may want to reduce position quantity based on this event using the closing price of 50500 or better. For remaining positions we suggest that stop protection be raised to intraday penetration of 47800 or a close at or below 48275. |
 T-Bonds (Dec) - The T-Bonds have experienced a key reversal back on October 2 and have made a nice set of stair steps on their way down off their top. We will suggest at this time that short entries can be initiated at a price level of 119-30 or better. We believe stop protection for this if elected should be intraday penetration of 121-11 or a close at or above 121-06. Retracement levels of support are approx.: 118-21; 117-01; 115-14.
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 Ten Year Notes (Dec) - There has been an active suggested long entry originally in the September contract and rolled to the December at 116-16.5. We suggest at this time that this long entry be liquidated at a price level of 118-02 or via the existing stop protection of intraday penetration of 117-08. |
