This quote pretty much sums up last week for me. You ever have one of those weeks where you’ve got so much to do you don’t know where to begin and by the end of the week none of it seemed to get done? Well that was my week.

I had such big plans for the last week. I guess that was my first mistake. I should only bite off as much as I can chew. In spite of my best intentions, not getting my projects done really wasn’t my fault; the real culprit was “something” else.

You see we’re having a gorgeous fall in the Pacific Northwest and when the weather is this nice it’s hard to be inside. However when I’m outside it seems I always end up at the golf course. I can’t help it. It’s a character flaw I know.

I can be casually driving down the road when all of a sudden I’ll lose control of my body. The strange thing is I’m aware of what is happening to me but I’m powerless to stop it. “Something” sinister is making me change my original plans and drive my car to the golf course instead. This same “something” forces me to take my clubs out of the trunk and go to the Pro Shop to see about a tee time. This powerful, mysterious force is not satisfied until I’ve played a round of golf and am sitting on the club house deck enjoying a beverage. Then the next day, just when I think all is well….

I’m totally at the mercy of this force. Actually, it’s more of an illness really. This sickness has made me play golf in weather that would have most normal people sitting indoors playing Yahtzee. I’ve had to endure blistering heat, rain, wind, hail and snow because of my ailment. Hello, my name is Erich and I’m a golf-aholic.

Hope you enjoy this week’s issue.

As expected, this week corn took a mild bounce off the 50% retracement at 255 ½. From here the market spent the remainder of the week forming a small sideways channel which we will be able to trade from next week.

The long term outlook for corn is still bullish however there is no denying that the daily charts show the market in a current downtrend. There is substantial resistance at Wednesday’s high of 262 which could keep the market from advancing in the short term. A strong close below the 50% would likely see the market fill the double gap formed last July. This would see the market trading around the 239 area which also happens to be the 50% retracement on the weekly chart.

A break above the top of the channel could see corn test the upward resistance at 265 ½. There is added resistance here as this is also the 61.8% retracement level of the last uptrend. Beyond here there is more resistance at 275 ½ which is also the 50% retracement of the quick two week downtrend.

Cotton seems to be stuck in the trading range between the 61.8% and 50% retracement levels of the last uptrend. This range will allow us to trade the market the same as a channel formation by entering long above the channel and short below it.

While open interest is still weak the market does seem to be gaining some upward momentum. A close above the 61.8% retracement at 4486 would likely see a continuation of the uptrend. Above here there is immediate resistance at 4510 but more substantial resistance at 4555 and again at 4635.

If the market can get below the 50% retracement and recent lows then the next stop would be support at 4250. If the downtrend continued the next support would be the 38.2% retracement level at 4175.

While beans did not pullback as violently as some of the other grain markets, it did follow a similar pattern of pulling back early in the week and giving back some of the drawdown later in the week. The market is currently not giving a clear indication which direction it wants to go, therefore we can use the support and resistance from last week to bracket a channel to trade from.

If beans continue to cycle as they have in the past then we might expect a downturn on Monday. There is current support on the matching lows of 559 ½ from the latter part of the week. If beans drop below this point they will likely next test the support found at 552 ½ and again at 545 ½. The next stop below here is the 61.8% retracement of the last uptrend at 538. While beans are still in a long term uptrend, if the market drops below here then we might need to re-evaluate the current direction of the trend.

Above Friday’s high there is a lot of daily and weekly resistance around 570-575. A strong close above this level could be seen as a continuation of the uptrend with the market next testing weekly resistance at 584. Providing the market has some momentum it should continue higher and possibly even test the contract high at 591.

Cattle spent last week ranging wildly between the resistance we pointed out at 7182 and the support at 7075. It tested the 7075 support several times last week before finally building up enough momentum to bust through. The market fell as low as 6997 before encountering more support.

Volume and open interest are both increasing sharply indicating that the current downtrend has strength behind it. There is substantial support below Friday’s low in the 6960-6970 range and any bear market will have to break through this support to continue further.

More support is at the recent lows of 6940 but if the market breaks through this level it could be in a position to challenge the 50% retracement of the last uptrend at 6898. At this level the cattle market would simultaneously fill a gap left on the weekly chart from the first week of September while completing the retracement. If the market makes it down here we might see the bears exit and a continuation of the previous uptrend resume.

While cattle seem to be locked in a short term downtrend, a quick pullback due to profit taking might be in order next week. A close above Friday’s high would see the market tackle the substantial resistance at 7075. Above here there is more resistance around 7100-7110 and again at 7150. The bears have the upper hand at the moment, so the bulls will have to gather some major momentum if they are going to turn the market around next week.

Not too much changed for cocoa this week as this market continues to test and break through 20 year old resistance. The market topped out Friday at 2174 when it encountered long term resistance at 2170. While volume and open interest have both dipped slightly there is still no real indication that this market wants to go anywhere but up. Having said that however, cocoa might be overdue for a profit taking pullback which is what might happen next week.

Friday’s trading settled close to the low for the day. This could hint at a pending reversal. The first line of support is at last week’s highs of 2124. A close below this level would likely see the market test the mild support at 2053-2058. However the first solid support is found at 1997, which also coincides with the 61.8% retracement of the last uptrend. If the market fails to pullback it might decide to channel for a few weeks as it has done in the past.

The longer term outlook for cocoa is still extremely bullish and a strong close above Friday’s high would likely refresh the uptrend. The market is getting into more historical resistance at these higher levels that could cause the trend to stall; however it would seem the next stop above 2174 would to be the resistance at 2300.

Sugar behaved itself very nicely last week, pulling back and bouncing off support at 638 as anticipated. Now that the pullback is out of the way sugar might be ready to continue its uptrend. A close above the resistance associated with Friday’s high at 664 could see the market continue higher to the next resistance around 671-675. Above here the market should retest the current high thereby testing the 38.2% retracement on the weekly chart. If the market can continue beyond here the next stop seems to be 716.

While the market is in a definite uptrend, volume figures declined toward the end of the week perhaps indicating that the trend might be losing some momentum. If the market closed below Thursday’s low of 638 it is possible that it might continue lower to the next support level at 622 which coincides with the 61.8% retracement level. Below here there is more support found at 605 and finally at 602 as well which would be 50% of the last uptrend.

In spite of recent declines the wheat market still seems to be very bullish, at least for the long term. This week, like last week, sees wheat having to get above the substantial resistance at 405 ½ in order for prices to continue higher. Just above this level there is more long term resistance to be found at the 416-419 range. The market will need increasing volume and open interest if it is going to have enough momentum to clear these obstacles. Above these levels the next stop could be the current high at 440.

The recent decline volume and open interest suggest that the market is losing strength. A close below the 394-391 range could see the market retreat to 384. Below here the next support can be found at 381 which is also the 38.2% retracement of the recent uptrend. If the market continued to slide it would find solid support at 373.

After continuing to test the 61.8% retracement at 470.25 earlier in the week the bulls finally gave up and promptly left the building. High volume and falling open interest indicated that the bulls were pulling back and the bears had their way with the market in the latter part of the week pushing silver as low as 449. Friday’s range brackets silver against resistance both to the upside and downside. This range will be crucial in determining which way the market wants to go next week.

A close below the 449 low will see silver go on to test recent support at 445.50. Once below here the market could test recent lows at 440 before finding further support at 432 and 427. If increasing open interest begins to accompany the higher volume then we could assume that the downtrend will continue.

If the bulls muster a rally then silver will have to post a close above Friday’s high of 454.50. There is a fair amount of resistance at this level further back in the history of the chart. If silver manages to exceed this resistance then it should attempt to breach the next resistance found at 462.50 before once again challenging the 61.8% retracement at 470.25.

Results:
Fulltime -36%, Part time - 45%, Paper Trading Only - 18% 

Aaaah, trading full time! I think this must be every traders dream. The results from our survey show that almost half of the respondents are realizing the dream of trading for a living. The other half of the folks surveyed trade part time with a small percentage still in the paper trading stage.

While trading full time is the ambition of almost every trader, trading part time does have its advantages. The biggest advantage of trading part time vs. full time is the lack of pressure to trade. The urge to overtrade can be more substantial when you are earning a living from your trading. In an earlier issue we outlined the dangers of overtrading and how it can be one of the chief factors that bring traders to ruin.

Of course, in order to trade full time and avoid the temptation of overtrading, or chasing the markets, it is important to make sure you are adequately funded. Many brokers will tell you that in order to trade full time you should have enough money to pay your living expenses for at least six months. Anything less than this could lead you to see things in the charts that might not really be there thereby leading you to overtrade.

Full time trading also requires a proven system. Many part time traders are at the point of refining their system to the point of making consistent profits in the hopes of trading full time soon. However, as experienced traders all know, it is not the system, but rather the skill of money management, that is the most important quality in determining long term trading success.

Good money management comes from the ability to execute your orders as planned without the emotions of fear or greed clouding your judgement. Good money management allows you to allocate an appropriate amount of your account to each trade, never risking too much money for too little profit. Most importantly good money management enables you to exit a bad position quickly, without regret and without losing too much money.

These are just a few of the skills that are necessary for the full time trader to be successful. While part time traders might be chomping at the bit to trade full time, it is important not to rush the transition into full time trading, and to be aware of the added stresses and skills that will be needed to successfully trade for a living.

This week I’m looking for a little feedback regarding the ezine, in particular the markets we feature. Some of the markets, like corn, beans and wheat, can be a little redundant since these markets follow each other pretty closely; therefore I was thinking that maybe you would like to me substitute another market for one or two of the grains?

Are there other markets you would like to see featured? Maybe you would like me to analyze one of the energies, a financial market like bonds, or a currency perhaps? Or are you happy with the current assortment of markets? This is your chance to tailor the e-zine to suit you!

Send me your responses at ErichTHT@hotmail.com and I’ll share the results with you next week. Shaggy will also put up a survey at http://www.tradershelpingtraders.com/surveys.htm

This week’s lesson is a little different. I was surfing the Wall Street Warriors site (http://www.wallstreetwarriors.com) the other day when I came across the following that I thought I would share with you. The following are some rules that everyone must obey and respect in life.

Rules for Life

You will receive a body. You may like it or hate it, but it will be yours for as long as you live. How you take care of it or fail to take care of it can make an enormous difference in the quality of your life.

You will learn lessons. You are enrolled in a full-time school called Life. Each day you will be presented with opportunities to learn what you need to know. The lessons presented are often completely different from those you THINK you need to know.

There are no mistakes -- only lessons. Growth is a process of trial and error and experimentation. You can learn as much from failure as you can from success.

A lesson is repeated until it is learned. A lesson will be presented to you in various forms until you have learned it. When you have learned it (as evidenced by a change in your attitude and behaviour), then you can go on to the next lesson.

Learning lessons does not end. There is no stage of life that does not contain some lessons. As long as you live, there will be something more to learn.

"There" is no better than "here". When you "there" has become another "here", you will obtain another "there" that will again look better than your "here". Don't be fooled by believing that the unattainable is better than what you have.

Others are merely mirrors of you. You cannot love or hate something about another person unless it mirrors something you love or hate about yourself. When tempted to criticize others, ask yourself why you feel so strongly.

What you make of your life is up to you. You have all the tools and resources you need. Remember that through desire, goal-setting and unflagging effort you can have whatever you want. Persistence is the key to success.

The answers lie within you. The solutions to all life's problems lie within your grasp. All you need to do is ask, look, listen, and trust.

You will forget all of this. Unless you consistently stay focused on the goals you have set for yourself, everything you just read won't mean a thing.