Brazil Bovespa Update , Oct 31 2011

 Struggling to go higher in response to external temporary optimism.

But sooner than later, Ibovespa listed companies with a big dependency on China purchases (Iron Ore, Soybeans and poultry meat,) will weight on the index upside potential. Oil prices staying steady around recent levels will also weight on Petrobras upside potential. Dollar / Real rate, looking also steady after leaving behind seemly historical lows should also feed future inflation, making banks performances less profitable than last couple of years, with their risk exposure more questionable.

65.000 should become a tough barrier to be broken.




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Coffee Update: October 25, 2011

Coffee Update: October 25, 2011


Coffee futures prices have been behaving without any technical unexpected surprises last couple of trading days!

The upside gap @ (KCZ1) 2.5100/2.5135 was closed today but not yet convincingly left behind , with the daily closing @ 2.5115.

Recent upside move is challenging and almost defeating short term important resistances.

Although this move has been made with lower than average daily volume, increasing open interest has been supporting recent up move. Technical biased buyers still look to have more upside price pushing power, at least in keep trying to push prices up to 2.60/2.65.

Medium term direction still is undecided , any bets should be made on a short term basis with tight stops!

Power Track Futures: Coffee Update: October 20, 2011

Power Track Futures: Coffee Update: October 20, 2011: Coffee Update: October 20, 2011 Elliott waves counting are becoming clearer, showing at each new chart bar , that we may just be in...

Coffee Update: October 20, 2011

Coffee Update: October 20, 2011

Elliott waves counting are becoming clearer, showing at each new chart bar , that we may just be in a “slow , wide and complex” bull market corrective wave 4.
As long as the 2.00 level is respected on a weekly closing basis , this scenario can still be considered as a strong possibility.

Daily/Weekly/Monthly : So far the market has performed accordingly to a “Zig-Zag” (5-3-5) bear correction of the last Bull Run, the only doubt right now is :
a) if the “B” wave of the correction has been completed at 2.9085(KCZ1) and the correction has ended with the 2.1980 low , completing the “C” wave .

b) or if we can still test the resistance line of the down trend channel around 2.60 before a new downside leg completes the correction with one more leg down to test the 2.1980 low or even the 2.00 support ,completing wave C)

On the pure technical/graphical side, if the market is able to post a weekly close over 239.55 this Friday , the odds will favor a quick challenge of last recent resistances at 2.4050/2.4225 (last year´s close and high) , then if the gap at 2.5100/2.5135 is closed and convincingly left behind , the odds will favor the bet on the end of the downside correction at the 2.1980 (KCZ1) low.

Coffee Update-(All mkts in stand-by mode.Decreased volatility (VIX) confirms this!)

Correct assessements of fundamental data changes will make the diference in the achievement of success in positions on medium term .

For coffee ,watch the rainfall patterns ,it must continue within average seasonality,from now on, first two weeks of october are a turning point to coffee belt spring rainfall patterns , at least historical average october rainfall are needed this year to support and grow the good recent flowerings which points to a record "on year" coffee crop in 2012-2013.
Before the spring flowerings "beans promises" does not become "coffee tree assured buds", more or less, at the end of this year , coffee prices should respect technical supports untill there!

Daily: 2.20 level should hold this week.Last week rally has happened on increasing open interest (+- 3.000 lots) and low volume , which shows that new sellers were not there anymore , friday´s plunge has happened on low volume and appears to be: "weak hands" pre-weekend liquidation.

Weekly: After testing the 50% Fibo retracement of the 1.30/3.10 rally at 2.20 ,the neckline resistance around 2.36 was challenged and not broken, creating an weekly indecision candlestick on the charts.
Open interest shows that close to 14.000 lots were added as new shorts during the 2.90/2.20 plunge , last week mkt data has shown that new shorts selling potential seens to be exausted.

Botton Line: Weekly charts are still bearish ,but ma´s channel support was touched and many technical divergences are showing up on daily charts. With the help of seasonality:(Brazil crop selling end rally)+ temporary weather uncertainties,few agressive new buyers could be able to oblige indulgent greed shorts to liquidate their short positions.Despite last friday wild plunge , new agressive longs could easily return to the mkt this week , if they succeed in pushing prices above 2.36 , the next upside objective will be the test of the open upside gap at 2.5100/2.5135.
Risk-reward odds favors bullish biased short strangles.(i.e. sell close to the money nearby puts and sell further out of the money nearby calls) (ex: sell kcz11 2.00 puts + kcz11 2.50 calls for a total premium of 500 points).
Good trades.

Veteran Traders Share Some Wisdom by Jim Wyckoff

Veteran Traders Share Some Wisdom
(NOTE: I write this story many years ago, but it still hold its value today.)

An elite group of traders and technical analysts gathered in Las Vegas last weekend to educate and enlighten several hundred attendees of the 21st annual TAG (Technical Analysis Group) conference. For two and one-half days, these respected market watchers shared their trading secrets and strategies.

Following are some trading and technical tidbits this writer picked up from this year's TAG 21 conference, which was put together by Tim Slater, a respected technician in his own right, and was sponsored by INO.com.

* One of the themes coming out of this year's conference was the increased volatility in the stock market, and how traders with a futures-related trading background have used their experience with volatility to obtain better entry and exit points in stock trading. Most agreed that whether one trades stocks, or financial futures, or commodity futures, there are key trading techniques and tenets that apply to all three.

* All the speakers heard by this writer pointed out that successful traders must have a specific trading plan before they execute a trade--and show keen discipline in following through on the plan. This includes entry points and potential exit strategies--including setting stops. Always set a stop when trading.

* Keep a diary when trading. This helps identify any trading mistakes, or trading successes, in future decision-making on trades.

* Have a money-management plan. This is a must. Know what your financial risk tolerance is and trade accordingly.

* Don't add to a losing position.

* If you are in a trading slump, take a break for a few days or weeks, in order to reflect upon your trading methodology.

* Do not overtrade. This is a common mistake among many traders.

* Take advantage of market trends. "The trend is your friend" saying rings true. Use extra caution when trading against the prevailing trend of the market. Don't try to pick tops or bottoms.

* Let your profits run and cut your losses quickly.

* The fundamentals in any given market are always most bullish at market tops and most bearish at market bottoms.
This is where the "buy the rumor, sell the fact" anecdote sometimes comes into play.

* There is no Holy Grail in trading. There is no "free lunch." Trading successfully is hard work.

* Most speakers said their methodologies should be used as one "tool" amid a variety of tools in your own trading "toolbox."

Jim Wyckoff