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TRADE Focus
10/22/2009
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, October 21st and the market analysis section was written during the course of business on Thursday, October 22nd.
The principle of patience came to mind several times during this past week. We have spoke of the 4 principles of success being desire, determination, discipline and patience as comprising what we refer to as our 3DP principle of success. Discipline and patience we have said are the most difficult.
Market volatility can create an awful lot of excitement as well as anxiety. But it is excitement and over anxiousness when trading participants are watching a situation develop and the volatility and market exuberance (either upward or downward) creates the urge to jump the gun prior to what is needed to confirm an entry or exit signal. Many times it causes the trader to jump the gun or jump the pattern like a defensive back might do on a pass route. Sometimes the result can be fortuitous but often times it can be disastrous leading to a big trading loss or in the case of the defensive back a big gain or touchdown against.
The U.S. Dollar has been at the forefront of much of the market action according to many analysts including us observers. As we all must know, the Dollar has been weak virtually day in and day out and lately the media has kept a very sharp focus on its development. As the U.S. Dollar has been losing value the stock markets have been making strong gains. Energies and Precious Metals to name a few have participated too. This has been chronicled over and over.
We have noticed many traders growing anxious over the expectation that these trends are coming to an end and are chomping at the bit to enter positions contrary to the recent and still current market direction. This is the equivalent of picking tops or bottoms. And that can be very costly. The virtue of patience becomes critical in these times of volatility and market excitement. It needs to be exercised to allow for trade entry and market pattern confirmation and to keep market participants from jumping the gun placing them in a precarious market position. A situation where the rules have been broken for the entry and therefore may not exist for stop protection and exit.
Volatility may create an alert status but we believe traders are better served by exercising patience and allowing for confirmation.
| Date of release |
Economic Report |
Actual |
Expected |
Previous |
Previous
Revised from |
| Oct 15 |
Weekly Initial Claims |
514K |
520K |
524K |
521K |
| Oct 15 |
Weekly Continuing Claims |
5992K |
6000K |
6067K |
6040K |
| Oct 15 |
Sep Core CPI |
0.2% |
0.1% |
0.1% |
|
| Oct 15 |
Sep CPI |
0.2% |
0.2% |
0.4% |
|
| Oct 15 |
Oct Empire Manufacturing |
34.57 |
17.25 |
18.88 |
|
| Oct 15 |
Oct Philadelphia Fed |
11.5 |
12.0 |
14.1 |
|
| Oct 16 |
Aug Net Long-Term TIC Flows |
$28.6B |
$30.0B |
$15.3B |
|
| Oct 16 |
Sep Capacity Utilization |
70.5% |
69.8% |
69.9% |
69.6% |
| Oct 16 |
Sep Industrial Production |
0.7% |
0.2% |
1.2% |
0.8% |
| Oct 16 |
Oct Mich Sentiment-Prel |
69.4 |
73.3 |
73.5 |
|
| Oct 16 |
Sep Treasury Budget |
-46.6 |
-78.0B |
45.7B |
|
| Oct 20 |
Sep Building Permits |
573K |
595K |
580K |
579K |
| Oct 20 |
Sep Housing Starts |
590K |
610K |
587K |
598K |
| Oct 20 |
Sep PPI |
-0.6% |
0.0% |
1.7% |
|
| Oct 20 |
Sep Core PPI |
-0.1% |
0.1% |
0.2% |
|
| Oct 22 |
Weekly Initial Claims |
531K |
515K |
520K |
514K |
| Oct 22 |
Weekly Continuing Claims |
5923K |
5970K |
6021K |
5992K |
| Oct 22 |
Sep Leading Indicators |
1.0% |
0.8% |
0.4% |
0.6% |
| Oct 22 |
Aug FHFA Housing Price Index |
-0.3% |
0.3% |
0.3% |
|
Note: We are archiving the Traders Focus from here on so that those interested can follow more easily.
 Natural Gas (Nov/DEC) -
Last week we suggested that long entries could be initiated in the November contract at a price level of 4500 or lower. The price did trade below that level on Friday October 16 the day after we wrote this but we recall it happened quickly and we know that only those who receive the Trade Focus by email would have seen the suggestion in time. So if there are any participants who were elected into the long entry from 4500 or lower it is time to roll the position to the December contract. The November is currently trading 4944 and the December is 5612 as we prepare this section. We will use these as our price basis. Make sure protective stop orders for the November contracts are cancelled. Stop protection for the suggested long entry in the December contract from the roll out of the November we believe should have stop protection at intraday penetration of 5260 or a close at or below 5370.
We believe we can suggest new or additional long entries in the December contract within a zone between 5575 and 5500. Stop protection for this suggested long entry approach we believe can also be intraday penetration of 5260 or a close at or below 5370. Retracement resistance levels are approx.: 5970 (hit); 6479; 6989. Ultimately we would not be surprised to find this market in the 7000 to 8000 price range. |
 SUGAR (Mar) - Last week we said that we wouldn't be surprised if this market went to new highs but were not overly confident of this or comfortable in providing a suggested approach. We believe at this time that those interested in long entries can do so with a close at or above 2546. Stop protection we believe should be intraday penetration of 2355.
We also believe that those interested in a short entry approach can do so with a close at or below 2114. Stop protection for this short entry approach we believe can be intraday penetration of 2333 or a close at or above 2303. |
 Silver (DEC) - We believe we can stay with the suggested long entry approach offered last week which is to initiate long entries with intraday penetration of 182300 or a close at or above 181850. Stop protection for this long entry approach we believe should be intraday penetration of 176850 or with a close at or below 177900. We will amend our short entry approach to intraday penetration of 170600 or a close at or below 171900. Stop protection for this suggested short entry approach we believe should be intraday penetration of 176400. Retracement levels of support are approx.: 160030; 153320; 146620.
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 Gold (Dec) - As in the Silver we will stay with our suggested long entry approach from last week which is to initiate long entries with intraday penetration of 107550 or with a close at or above 107330. Stop protection for this long entry approach we believe should be intraday penetration of 104170 or a close at or below 104270.
We also believe now that we can suggest a short entry approach with intraday penetration of 104170 or a close at or below 104270. Stop protection for this short entry we believe should be intraday penetration of 107550 or with a close at or above 107330. Retracement levels of support are approx.: 103820; 102770; 101720. The next series below this is approx.: 101680; 99980; 98280. |
Euro Currency (Dec) - The upward trend has continued with new highs for the move posted this past week. We do not have a specific approach for entry at this time.
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 Mexican Peso (Dec) - We believe there is a long entry approach we can suggest. This would be in a price zone between 75000 and 74200. If elected into this long entry suggestion we believe stop protection should be intraday penetration of 71325. Based on weekly data the retracement resistance levels are approx.: 78050; 82400; 86800. Retracement levels of support are approx.: 75325; 74625; 73925.
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British Pound (Dec) -
The British Pound continued higher in the past week. It is currently trading at 16624 as we prepare this section with the next resistance at the September 11 high of 16742. We remain sidelined.
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 Canadian dollar (Dec) - Last week as we were preparing this section we said that it appeared the Canadian Dollar was in the process of making a key reversal. It did and based on that our suggested short entry was elected with the close of 9532 on October 20. We believe we can suggest lowering the stop protection to intraday penetration of 9751. Retracement levels of support are approx.: 9534 (hit); 9450 (hit); 9366. The next series below this is approx.: 9318; 9169; 9021. |
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 S&P 500 (Dec) - Last week we ended this section saying that next level that may serve as an objective is the .500 retracement from the October 2007 high to the March '09 low which is approx. 112625. We do not see a long entry suitable for this near of a possible objective. Certainly it could go beyond but we will watch for developments that are more indicative. We do, however, believe that if this "bull run" is nearing an end that short entries can be initiated with intraday penetration of 106625 or with a close at or below 106925. Suggested stop protection for this short entry approach should be intraday penetration of 110275. We believe another short entry approach for new or additional short entries would be with a close at or below 101150. If this short entry approach is elected we believe stop protection should be intraday penetration of 105725. We will update retracement levels following additional pattern development. |
 Feeder Cattle (OCT) -
For any remaining short entry positions (see last week for explanation) it is time to roll to the November contract. Currently the October contract is 9445 and the November is 9640. We will use these prices as our basis for the roll. Stop protection for the short entry in the November contract we believe should be intraday penetration of 9732 or a close at or above 9690
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 Soybeans (Nov) - There are two suggested long entry approaches that have been initiated. One from the price level of 94400 and the other from the October 9 close of 96400. We believe stop protection for both entry approaches should be raised to intraday penetration of 96250 or a close at or below 96725. One concern is that the 101500 high of this week hit against a .618 retracement of the June 12 high and October 5 low. We will be watching this and may have to provide an intraweek update. Be that as it may, if the upward move continues we believe that new or additional long entries can be initiated with a close at or above 101925. Stop protection for this suggested long entry approach should be intraday penetration of 97525.
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 Wheat (Dec) -
Wheat has continued its advance. Last week we mentioned how its high at that time had stopped against a .618 retracement resistance and that some might want to reduce a portion of their position based on the closing price that day of 50500 or better. That would have been elected as the price has advanced to today's high of 55575. Remaining suggested long entries from the original initiation with penetration of 48550 should raise stop protection to intraday penetration of 49425. There is an active extension target at approx. 56175 and a .500 retracement resistance of significance at 58175. Consideration can be given to reducing position quantity and exposure at either or both of these levels. |
 T-Bonds (Dec) -
Last week we suggested that short entries could be initiated from a price level of 119-30 or better. This could have been done as the high for the week to this point has been 121-02. Stop protection for this short entry approach we believe needs to remain 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) - Last week we suggested liquidating the active long entry from 116-16.5 (the original long entry had been rolled from the September contract) at 118-02 or better which could have been done as the high since then has been 118-27. No new suggested entries for this week. |
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