Market Update - 10th February 2012

Sell 631 stop.  Protective stop 652 1/2.  Potential projection 585.  (Potential risk:  $1075-reg.  $215-mini.  Potential reward:  $$2300-reg.  $460-mini).
Reasons for the Trade:
1.  On both the monthly and weekly charts, corn is starting to sell off from previous resistance.
2.  On the daily chart, corn formed a key reversal top today - suggesting a trend change from up to down.  The last time it did so was in early Nov. at the 675 level.  It then sold off under 600.
3.  The daily macd is turning negative.
4.  On the daily chart a sell signal would push corn back under the 100 day ma.  That would be negative.
5.  On the daily chart a sell would negate a buy triggered today.  Normally when a market does so that quickly, it follows through in the new direction.
 
Buy March swiss franc. 
Buy 110.13 stop.  Protective stop 109.27.  Potential projection 112.00.  (Potential risk:  $1075.  Potential reward:  $2337.50).
Reasons for the Trade:
1.  The monthly chart formed a key reversal bottom last month - suggesting a trend change from down to up.
2.  On the monthly chart the swiss is back over the 20 day ma.  That is positive.
3.  On the weekly chart the swiss is back overt the 20 day ma.  That is the first time since it failed that average in September.
4.  On the daily chart the swiss closed back over the 100 day ma three days ago and is holding.  That is the first time since it violated it last September.  That is positive.
5.  Today was an outside day that can trigger a signal and market direction.
 
Sell March mini silver. 
Sell 33.595 stop.  Protective stop 34.455.  Potential projection 32.000.  (Potential risk:  $860.  Potential reward:  $1595.
Reasons for the Trade:
1.  On both the monthly and weekly charts silver is in resistance.
2.  On the daily chart, silver formed a key reversal top yesterday.
3.  On the daily chart silver is in the same resistance area that caused problems last November and a subsequent sell-off.
4.  On the daily chart, silver violated and closed under the uptrend formed since the Dec. 29 low both yesterday and today.  It also violated it on Monday and Tuesday of this week but managed to close back over it.  Closing under it suggests a potential trend change from up to down.
5.  Today was an inside day that can trigger a signal and market direction.
 
GRAIN COMMENTS: 

MAR CORN:  Its trading action today was not good.  It could be setting up to sell off more.  It formed a key reversal top on the daily chart.  It is trying to hold the 100 day ma though.  A trade could be developing.  See Trade Alert for details.  Closed 637, down 5 1/2.

MAR MINI WHEAT:  Both the 40-year seasonal average and the 15-year seasonal average indicates that wheat has a strong pattern of declining throughout the entire month of February.  Today's sell-off held at the 100 day ma.  Right under it is the 20 day ma.  The last time wheat sold off from the 675 level in early January, it did try to rally off the 20 day ma but eventually failed.  Possibly it will attempt the same now.  Watching closely to short.  Closed 646, down 14 3/4.

MAR MINI BEANS:  Even though beans on the daily chart are having trouble from the same level that caused a sharp sell-off in January, the long term charts are constructive.  Just watching for now.  Closed 1227 1/2, down 4.
 
MAR MEAL:  The long term charts are starting to develop some negative technicals.  The weekly is forming a key reversal top.  It is also back under the 100 & 150 day ma.  The monthly is backing off from the 20 day ma.  The daily rallied up to the 150 day ma and has sold off since.  Have we seen the top to the rally?  Just watching to short.  Closed 321.00, down .70.
 
MAR BEAN OIL:  It has a buy signal and has held its gains well.  It still has a potential to try for 54.00.  Just watching.  Closed 52.54, down .04.
 
MEAT COMMENTS:
 
APR HOGS:  In my last report I pointed out that the recent sell-off appears to be a correction to a third wave up.  So far the market continues to suggest that.  It rallied today to over the 90.00 support.  What will be key is the high of the third wave up (90.77) for the following reason.  It is there that both the 100 and 150 day ma on the daily intersected.  They pretty much intersect in the same area today at 90.70.  Getting over that would be major and, based on the chart, is a strong possibility.  Why?  Hogs did enough work between 86.25 and 88.80 to easily push them over that.  Closed 89.65, up .70.

APR CATTLE:  As mentioned before they are, long term, in resistance and are backing off.  The concern is that the previous long term negative technicals are long gone and the monthly sure looks like it is in the process of another major wave up.  Back to the daily chart:  near term it looks over bought.  It is having the same problem in the same area that ended the rally in late October/early November.  The produced a sell-off to 121.02.  Since then they have had two waves up.  Right now they look as though they could be starting a correction to the second wave up.  If so, they have projections down to 126.00 to 126.50.  If they hold there and start to rally, they may follow through on what the monthly long term suggests.  Closed 128.20, down .60.
 
SOFTS:
 
MAR COTTON:  I pointed out before that if cotton took out 92.69 it would be very negative.  It did so today with continued follow through.  It looks headed for 90.00.  Long term there really isn't any change.  It has been consolidating for some time and continues to do so.  The weekly is still struggling with getting back over the 20 day ma and this latest drop is probably in response to that.  The low end of the current range is around 86.00.  Just watching.  Closed 90.38, down 3.24.
 
MAR ORANGE JUICE:  In the last Update I suggested that the major rally could be over with.  Since then it has continued to sell off.  The new low is 186.25.  Technically there is no change long term since Tuesday's Update.  Closed 189.75, down .95.
 
MAR COFFEE:  The 15 year cycle that normally sees coffee selling off during the first half of February seems to be dominating.  On Tuesday the recent rally reached the 20 day ma up at 222.25.  Attempts after that to get over it failed and today it sold off to 214.75.  The number to watch now is 210.95.  Taking that out could push it to 200.00 - my projection for some time.  The long term charts support that possibility.  The monthly is triggering a preliminary sell this month after violating the 20 day ma last month.  The weekly chart is back under the 100 day ma after holding above it earlier this week.  Both are negative.  Closed 216.00, down 4.05.
 
MAR COCOA:  I have tried twice to buy it.  It continues to sell off.  So be it.  Today's low went to 21.86.  It rallied back over the 22.00 support and is trying to hold.  That is also where the 100 day ma on the monthly intersects and it is flirting with violating that.  Watching closely.  Closed 22.36, down .27.
 
MAY SUGAR:  It attempted again to get over the 100 day ma today.  It could not do it and sold off.  It did hold at the 20 day ma.  Keep stops at 23.20.  Closed 23.71, up 7.
Position:  Long 23.85 (2.7).
Projection:  25.00.

METALS & ENERGY COMMENTS:

MAR COPPER:  The potential projection to 400.00 that I mentioned last time is close to occurring.  Today's high 398.95.  Copper is over the 20 day ma on the monthly.  That's positive but the month is young, so to speak, and it needs to close out the month above that.  The weekly triggered a buy this week.  If it can get over 400.00, we could be looking at 425.00 copper.  Copper broke out of a pennant on the weekly in early January.  That projection could bring it to at least 415.00.  Closed 397.85, up 6.90.
 
APRIL GOLD:  It is having real problems with getting over 1750.00.  That is the  same problem area that stopped gold in early December.  It finally gave up and sold off to 1564.60 at that time.  It is trying to hold at the uptrend line formed since the Dec. 29 low.  Closed 1741.20, up 9.90.
 
MAR MINI SILVER:  Since late January it has been consolidating between 33.000, roughly, and 34.400.  Yesterday is the first time it formed a key reversal top from this level.  That is a red flag.  A trade could be developing.  See Trade Alert for details.  Closed 33.917, up .213.
 
APRIL MINI CRUDE OIL:  It triggered a buy yesterday from Tuesday's huge outside day.  It is clearly over the 20 day ma.  That is positive too.  Next resistance is up around 101.70.  Closed 99.10, up .28.
 
CURRENCIES & FINANCIALS:
 
MAR MINI JAPANESE YEN:  It sold off to 128.68 today.  The last two times it has had a sharp sell-off like this on the daily chart, specially, Dec. 19 and Jan. 25, it went right back up the very next day.  It reached the 10 day ma on the monthly today.  That is where it has held during every sell-off since April.  If it doesn't hold possibly the yen is finally making a real top and there will be more follow through tomorrow.  Tossing a coin may give us the answer!  Just watching.  Closed 128.81, down 1.07.
 
MAR SWISS FRANC:  There are a lot of technical positives in this market.  A trade could developing.  See Trade Alert for details.  Closed 109.75, up .16.
 
MAR DOLLAR INDEX:  I shorted the dollar yesterday.  Today's low 78.430.  Even with jobless claims at a four year low (assuming you can believe the figures) the dollar could not rally today.  Move stops from 79.650 down to 79.410.  Closed 78.652, down .082.
Position:  Short 78.850 (2.8).
Projection:  77.400.
 
MAR MINI EUROCURRENCY:  On Tuesday it finally rallied over 132.00 after struggling at that resistance for well over a week.  It has held that gain since.  It also formed an outside day today.  Taking out 133.25 tomorrow would be positive.  Move stops from 130.27 up to 130.89.  Closed 132.90, up .37.
Position:  Long 132.22 (2.7).
Projection:  136.00.
 
MAR CANADIAN DOLLAR:  Two weeks ago if finally got over the 100 day ma on the weekly after failing for over a month.  It has held that gain.  As of last week it got over the 100.00 resistance and is holding that gain so far.  On the monthly chart it is over the 20 day ma again.  Since getting over 100.00 it has started to consolidate again on the daily chart.  It could try for 101.00.  Just watching.  Closed 100.45, up .14.
 
MAR AUSTRALIAN DOLLAR:  The monthly chart continues to suggest an attempt to reach 110.00.  It triggered a buy last month.  The macd is positive.  Plus the current wave up on the weekly has a projection to that price level.  It is in some resistance around 108.00 currently but the pennant it broke out of on the weekly chart has a higher projection than that.  The one "cliché" is that the current wave up on the daily chart is close to meeting projections.  Closed 107.45, down 1.
 
MAR E-MINI S&P:  I continue to be interested in buying the emini but would like to see a correction of sorts.  It has resistance at 1354.50.  The current high is 1352.75.  Watching closely.  Closed 1348.25, up 1.25.
 
MAR 10 YR. NOTES:  The monthly chart is forming a preliminary double top.  That technically suggests a trend change from up to down.  The macd is turning negative too.  But there is conflict.  The monthly has a buy signal as well as the weekly!  The weekly formed a key reversal top last week.  I guess the point I'm making is that there are some potential negatives developing for this market.  Closed 130.250, down .100.