Coffee ( Dec11) continued

Coffee ....perhaps this could be a simple " Tim Morge/Market Geometry" high prob trade

This is real Tim Morge territory ( and God bless his little cotton socks!)....No reaction lines or no multiple PF's needed but perhaps (and it is a real BUT) should Dec Coffee reach the UMLP i hope that you will carefully evaluate any potential trade as i have been stitched up many times by simple ML theory alone....pros and cons of this to be evaluated on euro session opening tomorrow. (PS: we are closed now so Lonodn 9.30 / Paris 10-30 tomorrow morning is the place to watch the next bar.

Coffee ( Dec11)...takes a 10 cent tumble

Here are a selection of screen shots showing coffee 'C' Dec11 and continious plus the Dec11 CFD. I got chewed up( stopped out on my short) last week in the narrow range 228-231 and my particulalr weakness is timing which i find very difficult in high time frames BUT when the unconvincing break up came on Friday I warned against getting sucked in long as this soft commodity looks in a very weak state and i expect to see 221 then lower.Today we were happy to see a resting sell/stop order hit at 228.90. Cocoa has fallen last week and this from 2732 to 2400 as i write. Coffee has a difficult week ahead. Expect to see some support at 225 to 226...maybe a small RT back up to restest 230 before lower. For an short entry use a combination of the trigger line restest combined with the B-line + short stochs/B-Bands/MaccyD

Back again to the 1975 CL.....EURUSD

I can hardly believe it but i thought we had seen the last of the thick black centre line from the most important fork than can possibly be drawn in any EURUSD chart. Here we are approaching it at speed and i thought we had at least for some time been heading lower but these are strange times. All i do know is this magnet line is a superb trade setup in itself. For more info on this fork(its pivots etc) click here. Now this line is resistance and we will see how price behaves when it meets it. I can count 9 short term reversals from underneath approaches since this historic centre line was encountered this september 14th. If you look back over the last 10+ years it runs right through all important price movements. If you are interested in how i use historical forks and more importantly their reaction lines i will have a PDF document available soon.
Lastly: look at the B-line stochastic and the short stoch ribbons...classic high probability trades in the trend direction up/entry on the retracements in both the 15 and 5 min TF today.

Comment:What occurs to me is that if we cannot get convincingly below 1.3500 with shocking fundamentals like we have seen this week (crisis? What crisis...ending the week a whisker under 1.38!) then i suspect we may be going higher -back upto 1.40 sooner than I thought and perhaps the future is on the other side of this CL if we are unable to break below. Whatever happens.. a convicing daily trend away from this line ( up or down) will indicate future direction for me.

EShort ERUSD and German reluctance for the ECB option

There are historical reasons that Germany is reluctant for ECB involvment in the current EU crisis. Not many people living can remember the hyperinflation that Germany saw in the 1920's and certainly no one reading this blog but it has left a deep awareness on the German psyche.
More importantly is the current EURUSD today- price is at my reaction line i have been eyeing and mentioned earlier this week. I went short on the opening of the euro trading session at 1.3653 with an intial 15 pt stop now at b/e. Price seems to be struggling to get up above 1.3650 again. My objective was a LL ie retest of 1.3600 but as time goes on i am less sure. The bottom line here is that these reaction lines do exactly what they say on the box- react...however it is always price itself and it's strength or weakness that dictates if the reaction is a few pips or a 100.

EURUSD Back at the reaction line..cont

This is a double whammy and shows how weak price action is:

EURUSD Back at the reaction line

Here's a 15 min chart showing EURUSD which i posted yesterday morning after the sell -off. Now price has risen back to the same reaction line from a monthly fork with high value pivots. This could be a possible short entry but i will post my trade and reasoning as and if I enter. Otherwise i have my sights set on the 1.3676 area for an entry but it all depends on the price behaviour we will see between now and then.

My 5¢ worth......returns in all market conditions....where's Alpha now?

These are my thoughts: Money managers needing bull markets to make money are quite simply not not acceptable. Surely a managers true worth can only be guaged in the current volatile times? It's no longer a case of the markets being a 'win-win' situation and if a manager cannot make money in a falling or sideways market then I certainly would expect him to clear his desk . Where is Alpha now eh? The shocking results of many funds over the past few months are nothing short of a disgrace. I do hope that the coming months will offer an opportunity for a clean out of those who have been shown to be wanting. The problem is manyfold..but in particular the 'long' mentality that prevails in the equity markets and the inability for strucutred portfolio diversification. Everyone is a specialist. You learn your professional trade in either equities/futures (energy/agri/metals etc)/foriegn exchange/bonds/interest rates or credit swaps/STIRS and so the list goes on. It's hardly surprising that there is little understanding between each discipline even though any/most investement bank(s) will have a department for each. The true bull market dependence of any money manager is surely revealed during such times as we are seeing now and yet many funds are simply standing aside and telling their clients to wait out the current market conditions and then pile in when markets resume a gentle trend up again. Surely there are opportunities at the moment? If anything I see more since the S & P/Dow topped out in late summer than before. With the hedge funds it maybe emerging market equities, rare antique watches if a fund isn't likely to thrive during NEGATIVE return periods for the assets in which it trades then it is NOT a hedge fund. Hedged means you are able to manage or offset your risk and still generate performance with such insurance in place. What also irritates me is the absurd portfolio diversification away from equities that was becoming apparent in the summer. Diversification into gold being a classic examaple yet under volatile conditions it is not unusual for markets to move in the same direction..currently we have Gold/Euro/Energy/ some commodities that show a direct correlation to equity markets which has been tightening over the last weeks.

Here's another article of interest from Canon trading titled "5 commodities to watch".

Gold
There has long been a strong underlying cultural demand for the precious metal during the fall and winter in most developed and developing economies. Typically unencumbered by weather, the demand for gold's annual cycle begins in September with the Indian harvest as farmers and workers put some of their earnings in gold, the traditional medium of saving and investment in most of rural India. Until the recent emergence of China as a gold-hungry country, India was year after year the largest consumer of gold, often buying more than 500 tonnes annually. This seasonal pattern of demand is large enough to influence the monthly price pattern in the world market.

Indian buying then continues into October with Diwali, the Hindu festival of lights and the beginning of the Indian wedding season when parents often buy gold for dowries. In the developed countries, Jewelers begin buying gold to fabricate jewelry for the year-end Christmas season, which accounts for the lion's share of annual jewelry sales.

Live Cattle
U.S. beef prices will average 8-9% higher in 2011 compared to 2010 according to the latest Consumer Price Index (CPI) for Food, from United States Department of Agriculture's Economic Research Service. The October report projects the increase to continue into next year, but at a slower pace with the increase in the 2012 CPI for beef projected at 4.5-5.5%. Meat prices in general are climbing faster than those for other food categories this year.

The report lists the 2011 CPI for all food increasing by 3.5-4.5%, while meats, poultry and fish are up 5.5-6.5%. For the coming 2012, prices for meats, poultry and fish are projected to increase by 3.4-4.5%.

According to the same report, cost pressures on wholesale and retail food prices due to higher food commodity and energy prices, along with strengthening global food demand, have pushed inflation projections upward for 2011. They add, that retailers have so far been slow to pass their higher costs on to consumers. Food prices during 2012 ultimately will depend on factors such as weather conditions, fuel prices and the value of the U.S. dollar.

Corn
With shrinking harvest expectations, the outlook for tight corn supplies will likely keep corn prices historically high over the next year, raising feed costs for beef, dairy and pork producers. At the end of the 2011-12 marketing year next August, the nation's corn stockpiles are expected to fall to a 16-year low, based on a USDA forecast. The USDA has typically come in with rosier forecasts than reality ultimately supports. As of this writing, 67% of the corn crop has been harvested versus 51% this time last year. Despite this, yields are expected to be lower than the USDA October numbers would suggest. The October report projected 148.1 bushels per acre, but farmers are now expecting an average yield of 145.9 bushels per acre.

Sugar
The sugar crop in Brazil continues to come in under industry expectations. Poor weather, aging cane fields under rehabilitation and a national mandate that 50% of the domestic sugar cane crop be used in ethanol production for the country's growing biofuel industry have all left transport-ready supplies to a sugar hungry world tighter than net importers could have anticipated. Ninety-six percent of all cars sold in Brazil are now flex-fuel vehicles. China, the world's largest consumer of raw sugar is expected to import between 18 and 22% more in 2011-2012 as consumption outpaces production. Thailand, the world's second largest sugar exporting nation behind Brazil is currently experiencing the worst flooding in 50 years at a crucial time when the harvest is expected to be delayed by two to three weeks.

Crude Oil, Unleaded Gas and Heating Oil
The U.S. Department of Energy released data last week reflecting a 4.7 mmbbl increase from a week prior, but still 28.6 mmbbl lower from a year earlier, thus reinforcing fears of continued stockpile depletions that have left our inventories at 20-month lows. Speculatively, the trend points to higher crude, heating oil and unleaded gas prices.

Tighter supplies relative to demand are likely to apply upward pressure on prices. In addition, unleaded gas stockpiles dropped 1.35 million barrels and distillates fell 4.28 mmbbls, while refiners are running at 85% capacity with no reason to increase capacity.

The Bottom Line
Gold, cattle, sugar, corn and crude oil are in high-demand now due to a number of factors including seasonal patterns and shortages. Because of these circumstances, the commodities may prove worthwhile to the savvy trader.

Trading commodity futures and options involve substantial risk of loss. The recommendations contained in this article are of opinion and do not guarantee any profits. These are risky markets and only risk capital should be used. Past performances are not necessarily indicative of future results.

Seasonal tendencies are a composite of some of the more consistent commodity futures that have occurred over the past 15 years. No representation is being made that price patterns will recur in the future, and even if a seasonal tendency occurs in the future it may not result in a profitable transaction due to fees, the timing of the entry, and liquidation.

Original story - 5 Commodities To Watch

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/11/09/investopedia65142.DTL#ixzz1dJ56ECdu

Euro & CoffeeTalk about converging asset prices...this is absurd

Its not until you get down to the 60 sec/1 min chart you see how closely correlated they are.
PS. The final/current spike on the line graph is an error

Dec Coffee

Sell Dec Coffee @ 230.00 or better, Stop 231.75

EURUSD..lower at last

Reproduced without permission ( but with kind thanks) From The Daily Telegraph

Well my previous two posts ( if you followed bar by bar/candle by candle) could only have one outcome and here it is...weakness....... Lower to come today also i think.

continued

Look at the behaviour around the first reaction line from this minute fork. If price has any inclination to go higher we will see it now.

Anatomy of a reversal?

I think this is done for the moment on the downside and am flat waiting for a bounce back upto first 1.3671 then possibly 1.3690-1.3700 where i will look for opportunites to go short again...perhaps against the same reaction line that we we saw push price 'off the cliff' this morning

EURUSD...perfect reaction line trade

We were short from last nightat 1.3845 and on the Euro session opening were looking to add to the position but the first retracement is shown in the stochastic indicator window with the B-Line stoch flat under/on 20 and the ribbons upto the 90 level which is a satisfactory formation in the 30 min TF but the candle formation
(what i call 'sperm' candles with deep tails) put me off taking this additional trade. As i said yesterday 1.38 is a crazy price to pay for the EUR vs $ with or without Berlousconi and i am still looking for 1.35. The answer to the euro financail problem is political which is even more worrying for someone such as myslef who was born 18 yrs after the end of WW2 (1962) and has always seen the European union as a political union between Germany and France..... The Franco-German Embrace...'Hold me close ...hold me tight and then i can see into your eyes...Meine herren-werden wir die besten Freunde sein/Monsieurs nous allons être les meilleurs amis du monde'. What has this historical context got to do with today? Simply put the answer to these problems must be a Franco- German led political solution ratified by all 17 euro currency members. Perhaps something equivelent to the Marshall Plan but funded by Germany & France? However German opinion seems not at all keen on this approach.

EURUSD...surprise surprise...resistance...continued

EUR continued

EURUSD...surprise surprise...resistance

Price has momentarily stopped but will we see a accelaration through or a reversal.Italian vote results are due. The market seems overly optomistic and i confess i was expecting to see 1.3500 this week but all news is seen as bullish and in favour of the euro yet the overall context is ignored as is bad news- you dont need a degree in maths to work out the figures..... so we should be ( by all that is right) in the 1.20's or lower(all things considered) but yet here we are in the high thirties moving sideways yet euro pairs such as EURGBP are being/have been punished.

EURUSD..how will price behave at the 1975 centre line?

LINK
link 2

EurUsd ...Boomps-a -daisy!! after ECB rate cut

EURUSD...same old line and same old result

LINK

Coffee craps out

we closed on the first bar below the unidentified blue horizontal support line at 225.75. Disappointing? Not really but it shows us that Coffee has further to go on the downside and i suspect we will now test 221.00 again soon and then perhaps lower....200. the figure ?

Double tops in EURUSD ( 1min time frame) and Dec Coffee has work to do.

EURUSD make a d-top on the 1974 CL


Coffee Z11 (CFD) Here below in the 1 min chart we are short of the objective (pink CL circled) and being held back by consecutive reaction lines which can clearly be seen to resisting prices upwards direction/trend however we have support from somthing but i am unable/have not the time to find a reaction line so have marked it as a blue thick horizontal line ie... a discretionary trend line...there is something there but what it is i do not know but it seems to work. If price has not broken upward by the close i will flattern my long @ 223.75

EURUSD & + Dec11 Coffee ( CFD) 223.75/stop 222.75 cont

This is our old friend the 1974 median line above in EuroUsd.....a reliable short scalp trade on the first approach from below.

+ Dec11 Coffee ( CFD) 223.75/stop 222.75

No EURUSD at the moment because my eyes are on the softs. Coffee has had it's Epihany at 222.00 ¢/lb
A classic reaction line trade at the multiple confluences of an untouched Schiff ML and a reaction line off the Esignal chart (AB77.6D) plus several local ( mini) forks off a important gap at 225.25 (Dec11) bang on ( and i mean bang on) the .618 Fib RT . The gap started me thinking last night and the Euro session started with a small gap higher then a failure bang on the next reaction line at 227.30 . The trade is in its early stages but the trade plan has initial objectives of 227.25 then we are looking at 234.25. Failure to make a new high would call for a re-evaluation.
Two identical Esignal 10 min coffee charts are shown here one with arith scale and the other log scale. The RL #1704 (AB77.6D) goes through bang through ther gap. See the difference in the location of lines? Hence my summer posting ' What is the true location of a line'.