My wife and I have been toying around with the idea of listing our house for a while now; as a result, last week we thought about “testing the waters” to see what kind of interest there was in the marketplace. Our neighbour is a Realtor so it didn’t seem like a big deal to contact him to list the property. After all, Realtors are rarely too busy to accept new listings!

We called him up and he came over that evening with the appropriate forms to sign and put his sign on the front lawn announcing another home for sale. Innocent enough, right? Well, maybe not.

The phone rang the next morning promptly at 9 a.m. It was our Realtor. It seems that he already had someone who wanted to view our place; however they wanted to see it at 10:30 that morning, which I found out is actually Realtor-speak for 10 o’clock.

This meant we had about an hour to get the house ready for viewing…which is not so easy to do since we were not expecting a viewing for at least a couple of days. Don’t get me wrong, we’re not slobs, quite on the contrary; but we wanted the house to be “perfect” for anyone coming through.

So my wife and I ran through the house stashing items as we went. I quickly vacuumed the carpets while my wife gave the taps and mirrors a quick shine. Then we rounded up the dog and as many of the three cats as possible and piled into the van just as the Realtor and his client’s were pulling into the driveway. Whew! That was close!

An hour later we were back at home when the phone rang again. It was our Realtor friend and he told me that the prospective buyers just loved our place and were bringing in an offer later that afternoon.

To make a long story very short, we ended up selling our place in less than 48 hours. Now we are in a bit of a bind though, as we never gave any thought to selling so quickly. Frankly, we are not prepared for what comes next.

Now not only do we have to find a new place to live, but we need to handle all those other chores that come with moving: transfer phones and utilities, submit change of address forms to the post office, contact all our friends, make arrangements for moving, etc.

And you know how much I love moving… yuck! I’d rather stick my nostrils together with crazy glue!

Oh well, so much for “testing the waters”. ;-)

Good weather and growing conditions weighed on corn prices last week. Actually many of the grains, especially wheat, were weaker last week because of the good weather. While corn is a more fickle market than wheat, continuing good weather could put downward pressure on the market. In spite of this corn still seems to be fairly bullish.

This Week:

Corn did as we had hoped and descended into the gap that it left behind at the end of March. While there is some support at the current lows from a year ago, we might see the market drop to support at the top of the gap at 231 before we see prices rally.

Assuming prices dip to 231, the first challenge for a rally would be substantial resistance at 238 ½ from where we could likely expect a bounce. Once the market is above 238 ½ however, the next upward target becomes the daily and long term resistance level at 249.

A possible trade scenario would be to enter the market as it approaches 231 in anticipation of the support holding. Stops below the contract lows would have approximately $175 at risk. Exits near 238 ½ would yield profits in the neighbourhood of $400 or slightly better than a 2:1 risk/reward.

If you are already long, look for 231 as a possible opportunity to add to your positions with lower risk exposure.

A more cautious approach is to wait and see how low the market will go before entering with a contract. If the market reverses off of current lows you could still plan to enter above the 238 ½ resistance with stops below recent support at 237 for a minimal risk trade.

Cotton reacted very predictably last week and declined to the anticipated support levels. Actually the market moved a little faster than predicted, but cotton is like that; when it decides on a course it usually doesn’t waste too much time getting there.

This Week:

I would be tempted to short cotton again from the current highs as the market finds itself against serious resistance at 5935; however given the incredibly bullish session last Friday suggests that the market might be heading a little higher before resuming the downtrend again.

If cotton exceeds the current highs look for weekly resistance at 5980 to halt the uptrend. If the market did break through this level is appears as though we could look to resistance at 6010 as the next challenge.

A couple of scenarios are possible here. The first one is simply to stand aside. Too often we forget that not being in the market is as viable a position as being short or long.

If you simply feel like you must trade cotton next week, I would probably suggest trying to enter short near the resistance at 5935, with stops above the long and short term resistance at 5980. This scenario has about $250 at risk with a good profit potential of approximately $750 if the market re-tests the recent support around 5780, with the potential for larger gains of $1000 if the market manages to test support at 5735.

It is risky however as we may seen the market pull higher as entering a market mid-trend is always trickier than entering off support or resistance.

Long term outlook for cotton is still for lower prices. Next significant support levels are at 5660 and long term support and 50% retracement at 5516.

Well it appears that the long term resistance at 625 was enough to reverse bean prices last week and send the market lower after all. This should not be too surprising as April ends and May begins.

May is usually a pretty crazy month for beans. According to the Grain Trader’s Almanac (www.grainguide.com), May is the 3rd strongest and 3rd most volatile month for this commodity. As a result we can likely expect some wild market swings in the weeks to come. Well they don’t call Soybeans the Pork Bellies of the grain complex for nothing.

This Week:

I can see one of two scenarios for this market this week: either the market will break the current resistance at 603 and head higher, or it will continue lower at least to daily and long term support at 594 ¼ before heading higher.

Ideally I would like to see the market break the 603 resistance on Monday as that will take some of the guess work out of where the market wants to go. Putting stops below the low of Friday would have approximately $250 at risk. Profit potential at around $1000 is very good as the market will likely try and re-test the recent resistance around 625.

If the market heads lower before going higher, look for initial support near the top of the gap around 594. This is a significant long term support level as well and we will likely see the market head higher from here; however the potential does exist for the market to try and fill the gap below.

Therefore if entry is made near 594, stops should go below the gap at 590. This also has the potential for a very low risk trade of $250 with a huge profit potential of $1500! However before you get too excited you might want to pay attention to the resistance at 606 which might cause a bit of a bump as prices try and head higher.

Cattle gave us the pullback we had been waiting for going slightly higher than expected before halting on the resistance around 7180. Although fundamentals are suggesting higher prices next week, the significant resistance at 7180 and slightly higher at 7200 and 7220, combined with the bearish seasonal tendencies still make me a bear in this market.

This Week:

I would probably look for another opportunity to short this market as near to the 7180 resistance as possible. Even entering below resistance at 7150 with stops above 7200, would have about $200 at risk. Downside target would be the support at 6970 which is just below the low of a week ago and coincides with weekly support as well. Profit potential is about $700, or slightly better than a 3:1 risk/reward ratio.

If the market falls below here there is a bit of support around 6940 – 6950 which could make things a little choppy or cause the market to bounce again. Long term target still appears to be support around 6800.

Cocoa had a very bullish week and ended off with an especially strong showing on Friday. Trading news sources speculate that the strong showing was a result of closed markets in London; thereby leading to thinner trading volumes in North America which made the market a little more susceptible to manipulation.

This Week:

The big test for the bullish rally next week will be overcoming the resistance on Friday’s high and the nearby resistance just above it. While this is not normally a very bullish time of the year for this commodity the strong close last week would suggest that we could see prices continue at least a little higher this week.

If the market manages to exceed the resistance at 1990, look for it to challenge the resistance at 2015. With monthly and weekly resistance nearby at 1996 and 2030 respectively, this might be enough to send the market lower again. Look for an opportunity to short this market as it approaches these levels.

The anticipated reversal early next week off 1990, 2015 or 2030 will undoubtedly see prices decline to firm support at 1905. While the trade offers a good risk/reward potential it is a little riskier since we maybe seeing a shift in the long term trend of this market.

Assuming the bear trend remains intact the next support targets would be at 1880 as well as long term support at 1730.

Sugar continues to rally hard after bouncing off weekly support at 684 a couple of weeks ago. While the long term outlook for sugar is still quite bullish, the current trend seems to be tiring and maybe due for a pullback this week.

This Week:

I would expect the resistance along the current highs of 772 to hold this week. As a result we should see prices begin to pullback to support at 740 which could provide a good opportunity to re-enter the market long.

A more aggressive downward move could see prices fall to the 725 support, but right now that does not seem to be likely. 725 would still be a good place to put exit stops if you did decide to enter the market around 740.

Look for the next upper resistance target at 790 followed by resistance at 809. Profit potential at 790 is $560, or approximately 3:1 risk/reward.

The Swiss Franc reminds me of the story about the “Little Engine That Could”. After a substantial decline from the contract highs, the market has once more reversed and seems to have resumed the original trend…at least for the short term.

Last week the market overcame significant resistance around the 7340 area. The market continued higher, posting a couple of strong closes above the resistance suggesting the market is rejecting lower prices at this time.

This Week:

We could see the market briefly test support at 7275 before heading higher next week. If the market gives us this opportunity, a possible trade would be to enter the market long as it approaches support with stops below the next support level at 7225 for a risk exposure of $625.

It appears that the initial target for the rally is at the resistance around 7410. This would have a profit potential of about $1600, or a 2 ½:1 risk/reward. The next target would be resistance near 7500; however we will likely see a more substantial pullback before the market reaches this level.

Keep in mind that the Swiss Franc can be a large ranging market and therefore is not suitable for all traders or all accounts.

Silver was very strong last week with the rally halting at 468, just one tick shy of the 469 resistance we pointed out last week. While the long term trend seems to be for higher prices to continue, we could experience a pullback in prices next week.

This Week:

The resistance around 468 seems to be causing a little havoc for the bulls and is hinting that a pullback is around the corner. I wouldn’t be looking for prices to fall too drastically; however there appears to be enough room to pick up a few dollars before the market finds support around 456.

Shorting below the 468 resistance with stops above it would have about $150 at risk, with a potential profit at 456 near $500. This is slightly better than a 3:1 risk/reward.

Once the market finds support at 456, a better bullish opportunity is available. By going long from the 456 support, with stops below additional support at 452, we have an opportunity to enter the market with a little more than $300 at risk. Upside target appears to be resistance at 472 which would yield just over $750 per contract. Again risk/reward is slightly better than 3:1.

For those of you who can’t decide, you might want to do both. Be aware however that silver can make some pretty large ranges, so even though the amount at risk is reasonably small the risk of being whipsawed is ever present.

Long term upside target is 500.

This week Soybeans look to be among the more promising trades out there. Seasonally speaking, the market is heading into a fairly strong time which should see higher prices continue in the next few weeks.

Last Friday saw the market trade near some substantial support, and while we could see slightly lower prices, the market should rally soon.

We will follow the strategy outlined in the Bean analysis and plan on either entering if the market breaks Friday’s high, or postpone entering until the market retreats to 594; whichever comes first.

Assuming the market breaks 603 before hitting 594:

• Entry: 603 ¾
• Exit: 596 ¾
• Risk Exposure: $350
• Profit Target: 623
• Potential Profit: $980
• Risk/Reward: 2 ¾:1
• Degree of Risk: Moderate

If the market reaches 594 before breaching 603:

• Entry: 594 ¾ (approx)
• Exit: 588 ¾
• Risk Exposure: $300 (approx)
• Profit Target: 623
• Potential Profit: $1400
• Risk/Reward: 4 ½:1
• Degree of Risk: Moderate to High
•  

-Erich

This post is neither a solicitation to trade nor a recommendation of any strategy. Always consult your broker or advisor before attempting any trade. Commodity trading involves substantial risk of loss.

 

 

Item	Corn	S Franc	Silver	Soybeans
Ranges
Maximum	3.6	.0094	.095	1.56
Minimum	1.4	.0032	.035	.44
Average	2.4	.0057	.058	.87
Median	2.5	.0057	.055	.67
Mode	N/A	N/A	.035	N/A
Highest	243.0	.7377	4.665	62.30
Lowest	233.6	.7151	4.450	59.54
Breakouts
Maximum	3.6	.0101	.065	1.20
Minimum	0.2	.0012	.005	.12
Average	1.5	.0039	.030	.63
Median	1.2	.0035	.030	.84
Mode	0.6	N/A	.035	N/A
Pivot Points
R2	235.6	.7402	4.671	60.62
R1	234.8	.7376	4.651	60.38
Mid	234.3	.7334	4.638	60.02
Pivot	234.2	.7339	4.636	60.06
S1	233.4	.7313	4.616	59.82
S2	232.8	.7276	4.601	59.50
High	235.0	.7365	4.655	60.30
Low	233.6	.7302	4.620	59.74

PLUG: Calculations are performed on the Range Projector panels of SMTP/DTP. SMTP/DTP also provide: (Fib and Gann, dynamic and static) Time and Price calculators, Cluster Discovery and Analysis screens, and an "on-the-fly" Elliott wave extension calculator. 13 tools in all.

In you experience how far do you need to look back on a weekly or daily chart to get a good view of the market? On the weekly chart I normally look back about six months and about three months on the daily.

I am primarily interested in using these for short to mid term trades. Am I looking back far enough? Thanks.

Answer:
While a long term view is important you also need to keep in mind the time frame you are trading. If you are a short term position trader (as I am) and you are normally in the market for a few days to a few weeks, then the period most relevant to you will be from the last 3-6 months on the daily chart and the last few years on the weekly chart.

Actually on the weekly chart you'll want to make note of two trends: the predominant trend and the recent trend.

To use gold as an example, the predominant trend on the Gold weekly chart began around June 2001, whereas the current weekly trend began around February 2003. Analyzing the June 2001 trend and the February 2003 trend you can see that it appears that the larger uptrend may be breaking down; however it is still a little too early to predict a strong decline at this time.

You need to consider a slightly longer time frame on the weekly chart if you're a position trader as the last six months on the weekly chart really don't show you anything different than the daily chart.

If your trading time frame is shorter than mine (ie. you're a day trader) then the weekly chart holds even less significance for you since you are more concerned with the day to day market changes.

A day trader would be more interested in the trends found on a 30 minute chart and the daily chart, than the trends on the weekly chart.

-Erich