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Both the Trade Focus commentary and the market analysis section were written during the course of business on Thursday, November 5th.
We thought it would be difficult not to spend at least a little time on the latest surge in Gold made this week. The Central Bank of India announced it had purchased 200 tons of gold from the IMF exchanging some of their rather large foreign currency reserves for the precious metal. This sparked buying in the futures markets as it reflected a clear sign of demand according to the analysts. It also added fuel to the Dollar Confidence fire raising the question of not only how much more will India be interested in buying but also how many other central banks will be doing the same thing. We already know that there has been talk of China and Russia involved in swapping foreign exchange, namely U.S. Dollars, for Gold and this announcement added to that speculation.
What was interesting to us at the time of the initial release of the announcement was that the surge in the price of Gold was not accompanied by a plunge in the Dollar or by a strong rise in the stock indices. Eventually the Dollar fell from its highs and the stocks have managed to rally but there wasn't that same logical progression of if Dollar weak then Gold strong.
We said in our blog earlier in the week that we found it difficult to chase this market with new or additional purchases at these levels. There were some near term extension targets that were very close. We noted one at approximately 109150 which has since been exceeded. We will note here now another Fibonacci extension based on our monthly data which comes in at approximately 1105.50. We have seen it said too that Gold has surpassed the 90 pct. bullish reading and to many that places it in potentially dangerously overbought territory.
Natural Gas (DEC) - Last week we spoke of a retracement level of significance being met and suggested long entries could be initiated at a price level of 5075 or better with suggested stop protection at intraday penetration of 4921 which would have been elected. No new entry approaches to suggest at this time.
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 SUGAR (Mar) -
We will stay with what we have been saying in regards to Sugar the past two weeks which is ". 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."
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 Silver (DEC) - In last week's edition we noted a short entry that had been elected with the intraday penetration of 170600. We suggested then to move stop protection to intraday penetration of 170600 (break even) as the low had been 161200. Precious metals exploded to the upside during the course of this week with the announcement of India 's Gold purchase from the IMF. The suggested stop protection would have been elected as the high registered to this point has been 176350. We will be watching for additional development.
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 Gold (Dec) - There was a short entry approach elected two weeks go with the intraday penetration of 104170. Last week we suggested that stop protection could be lowered to intraday penetration of 105920 which would have been elected. We also had a long entry approach that we carried over from the previous week which would have been elected with the intraday penetration of 107550. We believe we can suggest that stop protection be raised to intraday penetration of 107750. We noted from our monthly data that there is an extension target at approx. 1105.50.
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 Euro Currency (Dec) - We noted last week the steep sell-off from the highs followed by a quick and sharp recovery as being conflicting. We were comfortable, however, in suggesting that short entries could be initiated in a zone between 14875 and 14915. The high registered since we last wrote to this point is today's 14916. This would have elected the short entry. We believe the suggested stop protection should remain intraday penetration of 15082 or a close at or above 15066. Retracement levels of support are approx.: 14675; 14556; 14437.
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Mexican Peso (Dec) - We had suggested a long entry two weeks ago which would have been initiated in the zone between 75000 and 74200. Last week we amended the suggested stop protection by raising it to intraday penetration of 74375 which would have been elected as the low to this point this week has been 74175. |
 British Pound (Dec) -
This week we can rekindle some interest in the British Pound with trade approaches of both long and short entries. We believe a long entry can be initiated with intraday penetration of 16754. Stop protection for this suggested long entry we believe should be intraday penetration of 16386. For a short entry approach we believe that a close at or below 16256 can be used. Stop protection for this suggested short entry approach we believe should be intraday penetration of 16508.
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 Canadian dollar (Dec) - There has been an active suggested short entry from the Oct. 20 close of 9532. We believe that stop protection can be amended to intraday penetration of 9532 or a close at or above 9507. Retracement resistance levels are approx. 9433; 9503; 9573. Retracement levels of support are approx. 9318; 9169; 9021. |
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 S&P 500 (Dec eMini) - There is a suggested short entry approach that remains active (live) from the intraday penetration of 106625. We believe that stop protection for this suggested short entry approach can be lowered to a close at or above 107125. We will keep the other new or additional short entry approach also which is to initiate a short entry with a close at or below 101150. Stop protection for this short entry if elected should be intraday penetration of 105725. Retracement resistance levels are approx.: 105440 (hit); 106225 (hit); 107075. Retracement levels of support are approx.: 100875; 98075; 95250. |
 Feeder Cattle (Nov) -
We will start with a reminder of last week which was " any remaining short entries in the October contract (originally from 10250) should roll to November. Our basis prices on the roll would have been 9445 and 9640 respectively." We believe that stop protection on the short entries in the November contract can remain intraday penetration of 9682 or a close at or above 9662. Retracement resistance levels are approx.: 9563 (hit); 9670; 9775. Near term retracement levels of support are approx.: 9492 (hit); 9440; 9390.
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Soybeans (Nov) - We must apologize for last week's section. Somehow we managed to omit the admission that the long entries in the November contract, one from the price level of 94400 and the other from the Oct. 9 close of 96400 would have seen stop protection elected with the intraday penetration of 96250 on Oct. 28.
 Soybeans (Jan) - Here too we will apologize for mis marking the section as (Nov.) and not (Jan.) in last week's edition. However, last week we suggested that long entries could be initiated in a zone between 96500 and 95000 and this should have been based on the January contract. Either November or January would have been elected based upon that price zone. If in November this is the delivery month and there is that possibility so they should be rolled immediately to January. Stop protection for the suggested long entry in the January contract we believe should remain intraday penetration of 93700. There was also another long entry approach with intraday penetration of 99825 that would have been elected. The stop protection of intraday penetration of 97175 would have seen its election today as the low was 97100. Retracement levels of support are approx.: 97425 (hit); 95775; 94125. |
 Wheat (Dec) -
Last week we suggested a new long entry approach using the price level of 49550 or better to initiate. This would have been elected. We believe stop protection should be amended to intraday penetration of 47875 or a close at or below 48325. Near term retracement resistance levels are approx.: 52100 (hit); 53125; 54150.
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 T-Bonds (Dec) -
There was an active short entry from the price level of 119-30 that would have seen its stop protection elected with the intraday penetration of 120-09. The high this week has been 120-15 and it is now 118-08 as we prepare this section. We had also suggested another short entry approach which we believe remains valid. That is to initiate new short entries with a close at or below 117-22. Stop protection for this short entry approach we believe should be intraday penetration of 119-14. We will update retracement levels upon additional pattern development.
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| Ten Year Notes (Dec) - We remain sidelined as we are not comfortable with entry levels at this time. |
