TRADES FOR TUESDAY OCTOBER 22, 2019
EMOTION is your enemy more than any market will ever be.
ARE HOGS FINALLY GOING TO FILL THEIR GAP? Twice they have started to fill the gap made in September and twice they abruptly stopped and rallied. After the first attempt they even took out the previous rally high made on Sept. 16 suggesting another wave up. But not so fast!
They abruptly stopped after failing to get over resistance and proceeded to start filling the gap again. And once again they abruptly stopped and rallied again. But this time they couldnt take out the high of the last rally. Instead they sold off back under resistance. An attempt today to recover over those resistances failed again. For a possible approach to shorting the market see Trade Alert below.
GOAL OF THE MARKET UPDATE: To give traders a technical explanation of market behavior with the goal to educate and better understand and trade the markets. What I convey to readers is not a personal opinion but what the markets are suggesting by their technical formations and action.
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TRADE SUGGESTIONS FOR TUESDAY:
Sell December hogs. Sell 67.12 stop. Protective stop 69.12. Potential projection 61.75. (Potential risk $800. Potential reward $$2148). Margin: $2420.
Reasons for the Trade:
1. On the monthly chart hogs are in resistance.
2. The weekly chart formed a reversal top in September, suggesting a trend change from up to down.
3. On the daily chart attempts to rally back over resistance continues to fail.
4. The daily chart has a previous sell signal.
5. The daily chart has a gap under the market. Markets tend to go back and fill gaps.
6. Today was an inside day that can trigger as signal and market direction.
Sell November feeders. Sell 142.20 stop. Protective stop 143.62. Potential projection 137.75. (Potential risk $710. Potential reward $2225). Margin: $3080.
Reasons for the Trade:
1. On the monthly chart they are backing off from resistance.
2. The weekly chart formed a reversal top last week.
3. The daily chart has a previous sell signal.
4. On the daily chart the macd is in sell mode.
5. The daily chart has a gap down at 137.75. Markets tend to go back and fill gaps.
6. Today was an inside day that can trigger a signal and market direction.
GRAINS: They all suggest further correction.
Dec corn the selloff resumes. It reached the 20 avg. today on its daily chart. Keep in mind the last selloff in mid-October held at that average. But it formed a reversal top on the weekly last week so that increases the potential for a deeper selloff this time. Keep in mind the monthly has a reversal bottom indicating that where this selloff ends, will be a buy. Watching closely to buy again. Dec wheat I took profit today when the daily chart started to suggest a reversal top. The first support is down at 515. Watching closely to go long again. Nov beans their daily action is less than impressive. They suggest a top at their current level another rally attempt today to only close near the low of their days range again. This has been going on for over a week. First support down at 920. Waiting to buy. Dec meal its action today was the most negative since starting to rally last Thursday. It rallied and almost reached its 200 avg. again on the daily only to sell off to close near the low of the day and under the 100 avg. too. As a reminder it formed a reversal top on its weekly last week indicating there could be more to this selloff. Dec bean oil It is still suggesting a near term top and a selloff. Just watching.
Dec hogs I lowered the stop to lock in a profit and it was reached. It then sold off again and formed an inside day. I will try to short it again tomorrow. See Trade Alert for details. Nov feeders today they sold off again under their 20 avg. but recovered to close over that support - barely. There should be more to this selloff. A trade could be developing. See Trade Alert for details. Dec cattle they rallied today and the stop was reached. Watching closely to short again.
Dec cocoa another new low today. Keep stops at 25.49. Dec cotton yesterday I said it may need to retrace some on the daily chart. It started to do so today. I took profit. Waiting to buy again. Dec coffee the rally continued today as it has closed over the 10 avg. for the second trading day in a row. This action suggests more to the rally. Just watching. Mar sugar it held 12.20 again today. Just watching.
Exit December wheat. Long 524 (10.17). Exit 532 3/4 (10.21). Profit $382.50 (after costs).
Exit December hogs. Short 69.55 (10.17). Exit 68.72 (10.21). Profit $277 (after costs).
Exit December cattle. Short 113.07 (10.18). Exit 114.25 (10.21). Loss $527 (after costs).
Exit December cotton. Long 63.58 (10.16). Exit 64.94 (10.21). Profit $625 (after costs).
Short December cocoa. Short 24.80 (10.18). Protective stop 25.49. Projection 23.75.
Long December mini crude. Long 53.850 (10.17). Protective stop 52.570. Projection 56.000.
Short December 10 yr. notes. Short 131.060 (10.10). Protective stop 130.080. Projection 130.000.
Short December bonds. Short 159.16 (10.21). Protective stop 160.24. Potential projection 156.00.
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