Trade Alerts

  Sell 20. 61 stop.  Protective stop 21.78.  Potential projection 18.80.

Reasons for the Trade:

1.  The monthly failed to hold the 100 day ma this month.
2.  On the weekly chart cocoa has attempted for four weeks to get over the 22.00 resistance area.  It failed again this week.
3.  A sell signal would trigger a sell on the weekly chart.
4.  The macd is negative on all three charts.
5.  On the daily chart, cocoa sold off back under the 20 day ma.  That is negative.
6.  The daily chart has a previous sell signal that is still intact.

Sell March sugar.  Sell 22.80 stop.  Protective stop 23.62.  Potential projection 20.00.

Reasons for the Trade:

1.  On the monthly chart sugar violated both the 20 day ma and the uptrend formed since the May 2010 low last month.  It has traded under both that average and the trend line during all of December - holding back rally attempts.
2.  The monthly chart has a previous sell that is still intact.
3.  The weekly violated the 100 day ma over a week ago.  Rally attempts have been held back by that average.
4.  The weekly chart is in a downtrend.  The current wave down has not yet met projections.
5.   The daily chart has been in a downtrend since the August high.
6.  On the daily chart sugar formed a key reversal top to the recent rally yesterday.
7.  On the daily chart, a sell would violate the 20 day ma.
8.  Today was an inside day that can trigger a signal and market direction.

GRAIN COMMENTS:  

MAR CORN:   I took profit today.  My concern with the sell-off in the bean complex and corn's reaction suggests there could be more to it.  Just watching.  Closed 638, down 4 1/2.
Position:  Long 627 (12.27).  Exit 638 (12.29).  Profit mini $55.  Profit regular size $495 (-comm/fees).

MAR MINI WHEAT:  Wheat reached both the 20 and 100 day ma on the weekly chart.  So far that has stopped the rally.  Long term it is in a downtrend on the weekly.  The low in late November met the projection of the current wave down (the third from the top).  Needless to say it has been rallying since until it reached the 20 & 100 day ma this week.  If the previous sell-off met its projections, have we seen the rally?  Maybe not.  Each previous rally (after a sell-off) averaged approximately 2.00 points.  This one so far has been only 84 points.  If it follows the potential of the others, wheat could reach for at least 725-750, if not more.  It is around 645 now.  Or is wheat so bearish that it cannot match the previous rallies?  Just watching for now.  Closed 645 1/4, down 6.

MAR MINI BEANS:  During the recent rally, the open interest in soybeans dropped to the lowest level in four months. This could suggest that it is a short covering rally only. This could be setting the market up for a shorting opportunity.  This is the third day that they have been struggling with the 1200 level and closed back under it today.  Yet the long term charts look more constructive.  Possibly near term they are setting up to go back and fill the gap at 1176 1/4.  Watching closely.  Closed 1197, down 11.

MAR MEAL:  Looking at the long term charts, they suggest more to the rally.
The daily chart is stalling out.  It did this before when it got over 300 for three days too.  It then rallied to the current level.  Is it setting up to do the same?  Just watching.  Closed 310.80, down 3.30.

MAR BEAN OIL:  I tried to buy it today.  It triggered a sell instead and may try to test the 50.50 area.  An interesting comment I read today about bean oil:  "This is the only time in the last four decades that bean oil has spent an entire calendar year above 36 cents. Due to the mean reverting characteristics of the grain markets, this greatly increases the probabilities of a major correction in bean oil in the next year."**  Just watching.  Closed 51.52, down .64.

MEAT COMMENTS:

FEB HOGS:  They triggered a sell today and sold off to 83.85.  Keep stops at 86.55.  Closed 83.97, down 1.57.

Position:  Short 84.75 (12.29).
Projection:  80.00.
 
FEB CATTLE:  They closed back under the 100 day ma today on the daily chart.  The 150 day ma intersects around 122.10.  If they cannot hold there, the rally is, most likely, over with.  Nothing has changed long term as those charts continue to suggest a potential top in the making.  Closed 122.35, down .80.
 
SOFTS:

MAR COTTON:  Last time the action is cotton was pretty much a "non event."  That changed quickly.  It rallied over the 20 day ma like it wasn't there and is now back over the 90.00 support on the daily chart.  It tested it today and held.  Long term the monthly is now trying to form a key reversal bottom.  It will have to continue to rally on Friday to pull that off.  The weekly has a buy.  If cotton can sustain this rally it should try for 100.00.  Closed 91.63, up .95.

MAR ORANGE JUICE:  I look at the daily chart and come to the conclusion this market has no idea what it wants to do!  It just keeps going back and forth between the 20, 100 and 150 day ma.  First it gets over them, then under them, etc, etc, Today it is back to being over all of them so what is next?  Probably another rally but will it get over 170.00?  That has been its problem but maybe this time it will succeed.  If so, it may try for 175.00.  Just watching.  168.55, up .40.

MAR COFFEE:  In my last Update I suggested that there could be more to the rally.  That occurred and it reached 229.30 yesterday.  It sold off today and is back under the 20 day ma and the support of the descending triangle referred to in earlier reports.  It appears this rally could have been a test of that breakout and nothing more.  The Dec. 20 high of 224.05 was resistance.  It took it out during yesterday's rally and that is the first time coffee took out a previous week's high since mid-November.  Today's low was 224.10.  If it trades back under that 224.05 area, it would be negative and probably suggest that the rally is over with.  Keep in mind that over the last fifteen years, coffee has exhibited a strong seasonal pattern of rallying through the month of January. However, this is contradictory to the longer-term 40-year seasonal average which projects a decline through the entire month.  So if it fails from here the 40 year seasonal pattern has probably taken hold.  Also keep in mind the long term charts remain negative.  Closed 224.25, down 2.40.

MAR COCOA:  I tried to buy it on Wednesday.  It sold off instead.  Today's low 20.76.  If it takes out the previous sell-off low (20.65) cocoa is probably headed for under 20.00.  This sell-off did damage to any constructive developments on the long term charts.  A trade could be developing.  See Trade Alert for details.  Closed 20.83, down .50.

MAR SUGAR:  I lowered the stop this morning to 23.39 and it was reached.  The 40 year seasonal average shows that sugar usually declines for the first half of January.  It has been consolidating for over a month while open interest has increased almost 9%.  That normally indicates that a strong price movement is developing.  I will try to short it again tomorrow.  See Trade Alert for details.  Closed 23.51, up .38.
Position:  Short 23.39 (12.28).  Exit 23.39 (12.29).  Loss $55 (comm/fee cost).

METALS & ENERGY COMMENTS:

MAR COPPER:  It continues to back off from the 20 day ma on the daily chart.  A recent buy signal has already been negated.  If this sell-off follows through it should take out the last low at 323.25.  If this wave down follows through, copper could reach 315.00 near-term.  Closed 337.00, up .45.

FEB MINI GOLD:  It surpassed my projection today.  I took profit.  The new low is 1523.90.  Long term it could be headed for 1400.00.  It took out the low of September 26 on the daily chart.  That suggests the start of wave down on the daily chart with nearterm projections to 1450.00.  The weekly has projections to 1400.00.   Waiting for a rally to go short again.  Closed 1540.90, down 23.20.
Position:  Short 1598.50 (12.27).  Exit 1547.40 (12.29).  Profit $1631.30 (-comm/fees).

MAR MINI SILVER:  It triggered a sell on Wednesday.  It surpassed my projection so I covered this morning.  It did finally rally today and formed a minor key reversal bottom.  It is now under the 100 day ma on the weekly.  That is negative.  Longer term it looks headed for 25.000.  Closed 27.730, up .496.
Position:  Short 28.490 (12.28).  Exit 26.520  (12.29).  Profit $1915 (-comm/fees).

MAR MINI CRUDE OIL:  It closed back under 100.000 yesterday.  It violated the 20 day ma today on the daily chart but did manage to close above it.  Watching closely to short.  Closed 99.820, up 31.

CURRENCIES & FINANCIALS:

MAR MINI JAPANESE YEN:  This market is a mess.  It has been trading between 128.00 up to 129.00 roughly since late November.  First it broke out to the upside and that failed.  It then broke out to the downside and that failed.  Confused or what???  It attempted to get back over 129.00 yesterday and sold off aggressively.  Finally the 150 day ma stopped the collapse.  Today it rallied again and is right back to 129.00.  The long term charts are now in conflict.  No surprise.  Best just to watch this one.  Closed 128.98, up .45.

MAR SWISS FRANC:  The daily chart triggered a sell today from an outside day.  All rally attempts have been stopped by the 20 day ma since early November.  It barely rallied today to try to hold the 106.00 support.  The key is the Dec. 15 low of 105.01.  That was a key reversal bottom on the daily.  If that is taken out, it will probably head for 103.00.  The 105.00 level is key on the weekly chart as that is where the 150 day ma intersects.  The monthly chart is already under the 20 day ma.  This is the first time since May 2010.  That suggests more negative action to coming.  Closed 106.35, up 6.

MAR DOLLAR INDEX:  It triggered a buy on Wednesday.  I covered today as it is struggling at 81.000 again.  The high is 81.310.  It was from this same area that it had trouble in mid December.  Waiting to buy again.  Closed 80.911, up .108.
Position:  Long 80.450 (12.28).  Exit 80.880 (12.29).  Profit $375 (-comm/fees).

MAR MINI EUROCURRENCY:  It triggered a sell on Wednesday.  I covered the same day.  It did sell off more to make a low today at 128.690.  Watching closely to short again.  Closed 129.47, down 6.
Position:  Short 130.350 (12.28).  Exit 129.660 (12.28).  Profit $376.25 (-comm/fees).

MAR CANADIAN DOLLAR:  I tried to short it today.  It reached my price during the night but not during the day.  It rallied and closed higher today.  Just watching.  Closed 97.72, up .22.

MAR AUSTRALIAN DOLLAR:  I tried to short it today.  It reached my price during the night but not during the day.  It rallied and closed higher.  It is also back over the 150 day ma.  Just watching.  Closed 100.41, up .39.

MAR E-MINI S&P:  In late October the market reached 1275.00 and had a significant sell-off.  Since then there have been three rallies and they all run into trouble around 1265.00 approximately.  And that is where the market has been struggling this week.  The long term charts still look positive.  The weekly triggered a buy today.  During the last sell-off it held at both the 20 and 100 day ma.  On the monthly chart the 20, 100 and 150 day ma all intersect around 1217.00 and the market held that this month.  Just watching.  Closed 1257.50, up 14.50.

MAR 10 YR. NOTES:  Tuesday's sell-off held at 129.220.  They have rallied since and are back over the 20 day ma.  It appears they will head for the high around 131.150 area.  Closed 130.270, up .045.