Sunday, January 27, 2008


The opportunities in the commodity markets continue as there are a couple more potential trades developing.

As of now, we remain short Cotton and Sugar and Long Live Cattle.

The Euro is one of the developing trades I spoke of and could be very near another sharp move lower. Although we are not there yet, keep a close eye on the stochastics and should they cross lower without obtaining the 80 level then look to sell short.
Lumber is our second developing trades and it seems like it has been in this category forever.

However, Lumber may have reached a point of selling capitulation and a cross and close of Lumber over the 10 day moving average that is shown on the chart will generate a short term buy signal.

How the move develops from that point will give us a good idea of exactly how large a move upward we could see.

We remain short Sugar as it has been very volatile and has made its way back to our level of entry.

Due to the extreme volatile nature of this market keep your stop loss very close to current levels to protect yourself from upside volatility.

Sugar may just end up being a double entry before the trade sticks, but lets see how this current trade plays out first.

Coffee remains on the edge of a potential sharp decline and we are short from these current levels. Much like sugar try and keep the stop close as volatility could become a problem.

The potential reward from the possible decline in coffee prices however should be worth the possible whipsawing.

We have a very nice profit in Cotton and have move our stop up to one half of our current profit.
While cotton still has a very high probability of continued decline, don't forget to move your stop down to lock in more and more profit as it declines. Let the actual price take you out of the market as you move your stop down.

Remain long Cattle as it looks just about ready to strike higher.
We have a small profit so far, but not enough yet to move our stop to break even.

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