CB&S Trade Focus

Time For A Break

noreply@blogger.com (CBandS) — Fri, 29 Jan 2010 20:39:00 +0000

Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

We realize we haven’t sent a tweet or posted a blog all week and there is an explanation. We will be taking a hiatus for awhile from our brokerage business and our commentaries. It’s been a great deal of fun and we have met a number of good people along the way. We appreciate everyone’s participation and the encouragement we have received.

Good trading and the very best to all.

Crude Support And Resistance

noreply@blogger.com (CBandS) — Mon, 25 Jan 2010 21:13:00 +0000

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Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

We are taking a quick look at the Crude Oil market today as a level of support stood out rather easily. We are wondering, and thought we would provide, what a possible level of resistance might now be consistent with the Fibonacci retracement price barometer.

On the fall from the 8445 high in the March Crude of January 11 it has stopped so far at 7401. The .618 Fibonacci support using the 6746 low of September 25 we have calculated as 6395.

If this low should hold and a recovery ensues the half way back or .500 Fibonacci resistance comes to 7923 according to our math. This may be a reasonable price level to expect resistance to form. If it proceeds higher the .618 retracement, using the parameters of 8445 high and 7401 low, comes to 8046.

Weather at least here in the Midwest is expected to become colder during the course of the week. This had been an excuse for the last leg of the rally and perhaps will serve the same purpose now.

As always there are different ways to utilize trading tools. We always suggest using them in a way with which you are most comfortable.

Good trading to all!!

Jeff
CB&S

S&P Swan Song or Dead Cat

noreply@blogger.com (CBandS) — Fri, 22 Jan 2010 22:00:00 +0000

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Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

Yesterday we looked at the Dow Jones Industrials and today we are highlighting the cash S&P 500. The reasons are obvious. The stock market has sold off considerably from its high and this usually draws a great deal of interest and concern from most all investors as well as those who don’t even invest. In the grander scheme of things there may be consequences felt by everyone when there are significant moves made in the stock market.

The chart above illustrates that the major uptrend line connecting the March and July lows had already been broken some time ago. We showed previously that this had just occurred in the Dow Jones. The S&P 500 has now also closed beneath its 50 day moving average, another barometer to gauge the market.

We have displayed a set of Fibonacci retracement levels which show that the price has reached a .500 mark at approximately 109030 with the .618 at approximately107600. This particular retracement level lined up with what looks to us to be a minor line of support. This may provide a price from where at least a “dead cat” bounce will take place. And possibly it will turn out to be more. But our stronger feeling is that momentum has turned to the downside and that this set of Fibonacci retracements will eventually all be exceeded and we will find lower levels to pursue. We will do our best to be timely in providing where these are.

Our Trade Focus has seen the first of suggested short entry approaches initiated with more to come if the downward move continues. Let us know if you are interested.

Good trading to all!!

Jeff
CB&S

Dow In Jeopardy

noreply@blogger.com (CBandS) — Thu, 21 Jan 2010 17:32:00 +0000

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Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

This is a redo of the previous blog but with the correct chart. There isn't much difference and our point remains the same however we felt more comfortable with the chart we had prepared for this blog spot.

It looks to us that today is a very important day for the technical condition of the stock market. We provide above the daily chart of the cash Dow Jones Industrials. We don’t think it necessary to go too far into detail. We believe that there are a few points of major significance that simply need to be noted.

The 50 day moving average at yesterday’s close we show as 10445.80. A key low in the Dow was made December 31 at 10423.10. And finally the major up trend beginning with the March low and joined with the July low comes in today at approximately 10570.00. The Dow, currently at 10415.70 as we write, puts all these key levels in jeopardy.

We’d be very interested in additional thoughts, comments, observations and approaches to this UNFOLDING market situation.

Good trading to all

Jeff
CB&S

The Dow In Jeopardy

noreply@blogger.com (CBandS) — Thu, 21 Jan 2010 17:21:00 +0000

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The Shrinking Euro

noreply@blogger.com (CBandS) — Wed, 20 Jan 2010 19:25:00 +0000

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Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

I wanted to provide an explanation as to why this blog space has not been updated for the past number of days. There was a death in the family and I needed to help tend to the matters associated with that.

The chart above is a daily March Euro Currency. The Euro has fallen precipitously from its high versus the U.S. Dollar since its November and December highs. Today’s action appears to have kicked off a new leg to the downside.

The news events surrounding this are continued questions over the debt of Greece plus other “Euro Nations” and also reaction to the daily economic news items of U.S. Housing Starts, PPI and earnings announcements from a number of the U.S. Banks. There was also the Massachusetts Senatorial election to digest. A Republican actually won in that state, filling that left open by the death of Senator Edward Kennedy some months ago.

Perhaps as important as any of the already mentioned news items was more out of China regarding the head of banking regulation requesting banks to stop lending money until the end of the month. This has created what is turning out to be a flight to safety or quality in the U.S. Dollar and hurting commodities of all sorts and currencies of other nations. Metals too are under a great deal of pressure with Gold down $30.00 per ounce and Silver down 90 cents per ounce.

Back to the chart above, I have included the Fibonacci extension targets which show the .618 extension at approximately 14008 and the .750 at approximately 13886. These may be reasonable price objectives to look for in the relatively near term picture.

If anyone would care to add anything or comment on what is looking to be an important day in the markets please do so. As we conclude this the Dow Jones Industrials, which hasn’t been mentioned, are roughly 160 points lower on the day.

Good trading to all

Jeff
CB&S

Reversal Of Energy Fortune

noreply@blogger.com (CBandS) — Thu, 14 Jan 2010 16:12:00 +0000

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Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

We thought these weekly Crude Oil and RBOB Gasoline charts were very worth noting. Both are exhibiting weekly reversal potential and in the case of the RBOB one that may be more of the sweeping variety.

Also of significance are the Fibonacci retracement levels. In the case of the RBOB its high so far is almost right on the .500 line. And what adds to the significance or perhaps the potential significance, is that from that level the price appears to be halting abruptly and reversing course. For the Crude Oil it may be a sign of relative weakness as compared to the RBOB Gasoline in that it is showing signs of failing from a price level far shorter of the .500 retracement.

These are situations that may provide substantial trade opportunities and we thought you should know. Anyone interested in further discussion can give us a shout. We’d be happy to hear from you.

Good trading to all

Jeff
CB&S

Reversal Or Routine Tuesday

noreply@blogger.com (CBandS) — Tue, 12 Jan 2010 21:57:00 +0000

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Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

The chart above is a daily CASH NASDAQ COMPOSITE.

What appears of interest here is that yesterday saw a new high for the move with a lower close recorded. Perhaps more importantly is that today’s trading range has left a gap beneath the low of yesterday trading range. This may be an indication of an impending correction. As can be seen there were gaps left on the chart while the market was moving up. Following yesterday’s reversal bar this small gap may hold a much larger significance. We will likely be finding out rather soon.

Of other interest is action in many of the other markets. Gold was down more than $20.00 per ounce, Silver down more than 40 cents per ounce, crude oil down roughly 200 points and the grain markets under great pressure with Corn down the 30 cent per bushel daily permissible limit following release of the January USDA Crop Report

Earlier in the day we sent out charts to our email list of a number of markets displaying similar traits. Gold and the Euro Currency, for example, illustrated where the recent highs corresponded to key Fibonacci resistance levels and where, like the NASDAQ Composite above, others such as Copper displayed daily reversal bars in very recent trading sessions.

We will soon find out if this was a one day wonder Tuesday reversal day or if there is greater cause to believe a substantial correction to these many up trends is in process. We suggest everyone stay tuned as this could become very interesting. We will share any measuring implications as soon as we can discern.

Good trading to all

Jeff
CB&S

Determinig Dollar Support Levels

noreply@blogger.com (CBandS) — Mon, 11 Jan 2010 21:33:00 +0000

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Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

The purpose of today’s chart and blog is to show that the U.S. Dollar Index has reached the first of the significant Fibonacci retracement levels. The chart above depicts the spot U.S. Dollar Index and the levels we find most important to be aware of concerning Fibonacci retracements. Those prices are approx.: 7681; 7630; 7580.45. They represent the .382, .500 and .618 Fib retracement levels as calculated from the November 26 low of 7417 to the December 22 high of 7844.9.

Traders believing, for example, that the U.S. Dollar has potential to move higher versus the basket of other currencies may want to use these price levels to help determine when or how to initiate positions.

Fibonacci retracement levels can also be determined for the various other currencies such as the Euro Currency for example. Some market participants might prefer this if their opinion or analysis suggests that one such as the Euro might perform particularly weak as compared to the U.S. Dollar over a certain period of time.

This is something that we frequently discuss and strategize with our clients. If interested in finding out more from us please send an email or call. Our Trade Focus is also available by weekly email. Sign-up is available through this blog as well.

Good trading to all

Jeff
CB&S

Silver Retracement Levels And ...........

noreply@blogger.com (CBandS) — Wed, 06 Jan 2010 22:16:00 +0000

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Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

The chart above is a daily Comex / Globex March Silver with 50 day moving average and fib retracement. Chart by CQG.

This morning we sent a tweet that said March Silver futures had reached the .500 Fibonacci retracement level and that our underlying technical indicators suggested to us that the market might find resistance there. It did not.

The .500 level was 1813.25. The next important retracement level is the .618 Fib which comes to 1845.523.

The U.S. Dollar remains a factor as well as the stock indices. The intermediate term underlying technical condition appears quite overbought. This condition, however, does not show up at the daily level. In fact, although not completely positive, they are nearing a cross over into what we consider a positive position.

The longer term basis weekly data actually shows our underlying technicals as being in negative territory. This would help support the view that this upward price movement is corrective in nature.

Good trading to all

Jeff
CB&S

Gold's Monthly Reversal

noreply@blogger.com (CBandS) — Tue, 05 Jan 2010 21:55:00 +0000

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We have taken a number of questions already this week concerning Gold. We thought it appropriate, then, to make mention of it in our blog today. We also are very appreciative for being provided with the subject matter.

We will keep it simple as best we can. Simple, is good!

The first thing that we will point out is that Gold finished the month of December making a monthly reversal. It made a new high for its move while reversing and closing lower than the previous month. We also notice that the size of the monthly bars for both November and December were nearly identical in size. November’s range spanned $152.80 and December’s $151.40. We might consider this as a variation of the double bar reversal pattern.

There have been other monthly reversal bars that did not result in much of a follow through move such as the reversal bar high in June 2009. But both July of 2008 and March of 2008 produced monthly reversal bars which were part of the move that took the price from its March 2008 high of 1033.90 to the October 2008 low of 681.00.(basis monthly continuation data).

We are not predicting the same as the 2008 scenario, necessarily, but we do find significance to this occurrence. Other factors that help sway us to a more bearish than bullish attitude is the structure of its pattern to the highs and that everybody and his brother was bullish at the high and touting the long side (allegedly). Finally, it appears to us that the move since the December 22 low is corrective in its composition rather than the restart of the bull. This though, can change easily and quickly.

The other point that needs to be made is that the December 22 low was an approximate .618 Fibonacci retracement off the highs when measured using the significant September 2009 low. This gives it potential as a key support level.

The U.S. Dollar may play a role in the direction of Gold too and we suggest staying aware of its whereabouts and its trading pattern if and when making trading decisions for Gold.

Good trading all

Jeff
CB&S

NASDAQ On The Move

noreply@blogger.com (CBandS) — Mon, 04 Jan 2010 21:49:00 +0000

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Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

There’s no denying; stocks start 2010 with a bang.

NASDAQ Composite actually gapped above the range of 2009’s last session on Thursday. And Thursday was a fairly sizable downside day closing 22 points lower from the previous settlement.

The NASDAQ 100 appears to have clearly broken out of a channel providing a measuring implication to slightly above 2000. Currently the NASDAQ 100 is trading 1885 which is 24.69 points higher on the day. Unless there is a quick reversal of direction this pattern suggests higher prices sooner rather than later. A good tip off to that type of reversal would be either a classic reversal with a new high and lower close or we would accept a move and close back into the channel. These may be worth looking out for.

We have been reminded during the course of the day that last year the first trading session of 2009 saw the Dow gain 3 percent only to end January with an almost 9 percent loss. Along with that we have been made aware of how the first three days of January plots the course for the entire year.

But we need to remind everyone that last year is last year. This is now and we must caution against replica trading. Certainly there can be similarities and there are and can be tendencies and seasonalities but today is today with its own unique set of circumstances. Remain disciplined always. Be careful not to trade blindly on previous occurrences.

Keep your seat belts on because we may be heading into some turbulence.

Good trading to all

Jeff
CB&S

End Of 2009 Trade Focus Commentary

noreply@blogger.com (CBandS) — Thu, 31 Dec 2009 21:35:00 +0000

Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

We thought for something a little different we would post our weekly commentary as seen in our Trade Focus publication.

We wish everyone a very healthy, happy and safe New Year. You guys are the best!!

It is the end of the year and the financial news networks have been asking the many and varied analysts they bring on their programs what they expect and predict for the stock market in 2010. What has stuck out to us is two things. Nearly all are stating they are bullish for next year. Many of those we heard, and this really stood out to us, said they expect 2010 to be just like 2009. First of all what does this actually mean? Does it mean it starts out with a big sell-off or correction lasting to early March followed by a big rally for the remainder of the year? Or does it mean that the “cyclical bull” or “bear market rally”, depending on one’s preference, marked by the March 6, 2009 low continues throughout the course of 2010?

Our response is that we doubt that 2010 will be a repeat of 2009. And that applies to either of the scenarios described above. For one thing it is just too easy to say. Furthermore we find it difficult to believe and accept that the market ends 2010 with another 25 percent gain basis the S&P 500 and 20 per cent or so in the Dow Jones. It’s great to be optimistic but the expectation is simply unrealistic to us.

The caveat that many of the talk show analysts offer is geo political citing Iran and now also Yemen. Yes this is something that can be a factor. Sans that, however, we would offer that at some point during the course of 2010 we will be hearing more and more about the global deficit crisis. We have already gotten a taste of it with the problems in some of the European states. Greece, Ireland and some of the Baltics. Here in the U.S. We have quite a few states of our own whose individual deficit issues are equal to or larger than those of the problematic European countries. And then there is the growing deficit of the United States of America with shrinking tax revenues, high unemployment and mortgage foreclosures to contend with. If the government pursues a course of more taxation such as cap and trade for example and or the additional “taxes” pegged to a Health Care Bill, if passed, will this solve the shrinking tax revenue problem or ultimately accelerate its decline? Can the American consumer return to the consumption level that prevailed prior to the credit crush of 2008? We just don’t see this anytime too soon.

Stock prices are said to trade on perceived expectations of earnings. What will need to be resolved is how and what will effect this perception. Following the gain that 2009 is ending with compared to where 2008 ended, we believe it difficult to expect that there will be a perception that earnings maintain the respective percentage clips of U.S. stock indices seen in 2009.

However, as Yogi was wont to say, “It ain’t over til it’s over.” 2009 ends with what looks to be respectable breakouts to the upside. Prices continue to trend in the direction of the lower left to the upper right on the chart. (We thank Dennis Gartman of The Gartman Letter and CNBC for this beautifully appropriate description). Until the trend is disrupted it is likely wise to stay with the trend. We might suggest here that unless, for example, the cash S&P 500 closes appreciably below 108000 and the Dow beneath 10,150.00 that S&P may see 122500 and the Dow 11,250.00 but S&P to140500 and Dow at 12,650.00 we are much less willing to predict.

As politically incorrect as it may be we say God Bless You All and wish everyone great trading success in the New Year.

Good trading to all

Jeff
CB&S

Sugar Magnolia Blossoms Sweeter

noreply@blogger.com (CBandS) — Wed, 30 Dec 2009 21:20:00 +0000

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Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

We couldn’t resist the sugar is sweet stuff in our tweet. Have never used it before but with the New Year holiday here upon us we felt why not.

We will make it short and sweet (there we go again) this week and include what will be the excerpt from this week’s Trade Focus on March Sugar.

In addition we will include an excerpt of something from our weekly publication that either isn’t or hasn’t worked out well and try to make this a policy. An associate told us some years ago that whenever you toot your horn you should show a loser too. We agree and we shall. There are some of those to go around. Always have and always will.

Here’s the Sugar excerpt written today 12/30/09:

Sugar (Mar.) – The suggested long entry approach from the December 11 close of 2400 remains active. Stop protection we believe needs to remain intraday penetration of 2477 or a close at or below 2494 UNLESS there is a close at or above 2751. If there is a close at or above 2751 we suggest stop protection can be raised to intraday penetration of 2597 or a close at or below 2649. There are now extension targets activate to approx. 2807 and 2871.

And now for the Soybeans which you will see have been stopped out:

Soybeans (Mar.) – Last week we had amended our suggested short entry approach to a price level of 103500 or above. This has now been elected as of Dec.28. The suggested stop protection would have also been elected with the intraday penetration of 105125 made today Dec. 30. No new suggested entry approaches at this time and we will update retracement levels following further price pattern development.

We thank you for taking the time to read and contribute to our blog.

Happy New Year to all and to all we wish GOOD TRADING throughout the New Year.

Remember the only way to receive our Trade Focus weekly is by email until further notice. You can reach us through the website or email or phone as seen on the right side of this blog site.

Our best wishes

Jeff
CB&S

T-Bonds Meet Near Term Trade Focus Target

noreply@blogger.com (CBandS) — Tue, 29 Dec 2009 21:25:00 +0000

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Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

This is a follow up to last week’s US T-Bond section from our weekly Trade Focus. It appears that there is some reason to expect a retracement rally of some amount. We had highlighted what we believed to be an intermediate term target at the 114-28 level as you will see below. Bigger picture, though, still suggests to us that lower prices are coming down the pike.

Retracement levels are currently in the area of the following price levels: 116-15; 117-00; 117-17. For our purposes we would be interested in what the pattern looked like if the 117-00 level is attained and assess if at that time we believe it appropriate to suggest new or additional short entries.

New lows below the 114-26 lows of the past two sessions prior to a retracement to the above mentioned levels would likely change the retracement parameters and suggested entry approaches.

Here is the T-Bond section from Trade Focus written December 23 and sent to our email list December 24.

T-Bonds (Mar.) – There remains an active suggested short entry position from the intraday penetration of 119-21 back on December 4. We believe stop protection can be lowered to intraday penetration of 117-24. We can identify a near term target at approx. 114-28 and suggest that some may want to at least reduce the size of their position at this price level. Lower prices are still a viable potential but capital preservation can be a key element in long term success. We will need to allow additional pattern development before updating retracement levels.

A reminder that for at least the time being Trade Focus is only available via email. If you wish to receive please send us your name, email address and any additional information you care to share.

Futures traders can also request new account documents from our website at: http://www.cbandsbrokerage.com/ or by email to cbands@cbandsbrokerage.com or jmajer@mfglobal.com. For old fashioned folks our toll free phone is 800 321-5810

Good Trading to all

Jeff

CB&S

Gold And Silver Retrace

noreply@blogger.com (CBandS) — Mon, 28 Dec 2009 21:24:00 +0000

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Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

Both Gold and Silver have been able to stage muted rallies off their recent lows. It does not appear to us, yet at least, that the pattern developing off these lows is a bullish one. Also of significance, we believe, is that the highs of today’s trading stopped up against their respective 50 day moving averages.

It makes sense to us that this would be a critical barrier and closes above the 50 day moving average for both the Gold and Silver will be needed to turn the situation more optimistic for the bull case at this point in time. In sum, there may be lower to go before the correction is complete.

Above the 50 day moving average in the February Gold contract is the near term .618 retracement level of approx. 111700 that may pose some resistance as well.

Good trading to all

Jeff
CB&S

Trade Focus Gold and Bonds

noreply@blogger.com (CBandS) — Wed, 23 Dec 2009 21:56:00 +0000

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Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

We thought we would provide a sneak peak at two sections from this week’s Trade Focus which will be sent out by email tomorrow December 24.

Also we want to remind readers of this page that Trade Focus is until further notice only available to our email list.

If anyone is interested in seeing the Trade Focus in its entirety please send us your request and email address to jmajer@mfglobal.com or cbands@cbandsbrokerage.com

Here are this week’s sections on Gold and T-Bonds:

Gold (Feb.) – There remains an active suggested short entry position from the price zone between 114000 and 115000. We believe stop protection can be lowered to intraday penetration of 113460 or a close at or above 112430. Retracement levels of resistance are approx.: 111120; 112240; 113370. The next series above is approx.: 113310; 115110; 116910. Retracement levels of support are approx.: 109320 (hit); 105130; 100950. The next series beneath this is approx.: 103380; 97340; 91300.

T-Bonds (Mar.) – There remains an active suggested short entry position from the intraday penetration of 119-21 back on December 4. We believe stop protection can be lowered to intraday penetration of 117-24. We can identify a near term target at approx. 114-28 and suggest that some may want to at least reduce the size of their position at this price level. Lower prices are still a viable potential but capital preservation can be a key element in long term success. We will need to allow additional pattern development before updating retracement levels.

Happy Holidays to everyone.

We wish the best for all and a good trading year in 2010.

Jeff
CB&S

New Longs Or Shorts For S&P 500

noreply@blogger.com (CBandS) — Mon, 21 Dec 2009 21:07:00 +0000

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Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

We thought it might be a good idea to share with those not receiving our weekly Trade Focus the March Emini S&P 500 section. Here you will see how new short or long entries can be initiated with the prospect of catching the next move.

The above chart is a Weekly Emini S&P 500.

From 12/17/09

S&P 500 (Mar. EMini) – We are adding a new short entry approach along with the one from last week. This will be to initiate a short entry with intraday penetration of 107475 or a close at or below 107975. Stop protection for this approach we believe should be intraday penetration of 111475 or a close at or above 110925. The second of our suggested short entry approaches can be for new or additional short entries with intraday penetration of 106150 or a close at or below 107175. Stop protection for this approach should be intraday penetration of 110725. We won’t forget our suggested long entry which we will amend to intraday penetration of 111975 or a close at or above 111725. Stop protection for this suggested long entry approach we believe should be intraday penetration of 109725. Retracement levels of support are approx.: 107875; 106750; 105650. The next series below is approx.: 105975; 104225; 102500. Based on weekly data the retracement resistance levels are approx.: 112500; 123375.

We're always open and receptive to comments and observation

Good Trading To All

Jeff

CB&S

Silver Update. How To Enter A Short

noreply@blogger.com (CBandS) — Wed, 16 Dec 2009 18:36:00 +0000

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Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

We thought we would use this chart as an update to our Silver market section from last week’s Trade Focus dated December 10 2009

The chart is a 120 minute bar chart where each bar is the price range of each 120 minute interval. Overlayed on the chart are Fibonacci retracement levels of the recent secondary down wave. It can be seen now that the price has returned to the level of a suggested short entry. The other approach of initiating a short entry based on a close at or below 170400 basis the March contract has yet to be elected. We believe it to remain a valid approach.

Fed announcement an hour away. Anything can happen and usually does!!

Below is the Silver section of the Trade Focus December 10 2009 edition.

Silver (Mar.) -- Unfortunately our short entry suggestion from a price level of 191500 or above made last week would not have been elected. We will however suggest two new short entry approaches this week with the first being from a price level of 176500 or better. Stop protection for this short entry approach we believe should be intraday penetration of 184200. The second short entry approach we will suggest is with a close at or below 170400. Stop protection for this short entry approach if elected we believe should be intraday penetration of 177300. New retracement levels of support to offer are approx.: 172970 (hit); 166200; 159430. Another series below this is approx.: 168780; 160650; 152520. One more series below is approx.: 165860; 156830; 147800.

** We want to make a note here which may be of interest and have some effect on some followers. Until further notice the Trade Focus will not be available at our website. It will only go to email subscribers and clients. This is a technical issue we hope to have resolves as soon as possible.

We apologize for any inconvenience this may cause.

Good trading to all!!

Jeff

CB&S

U.S. Dollar Phase III

noreply@blogger.com (CBandS) — Tue, 15 Dec 2009 21:09:00 +0000

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Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

We wanted to come back to the U.S. Dollar today as it is in process of surpassing another significant obstacle. Our chart above is of the daily spot U.S. Dollar index. We began our recent coverage of this market with a description of a stage 1 breakout (Dec. 1 blog). Then on December 4 it closed above its 50 day moving average for the first time in approximately eight months and has remained above ever since. Now what has perked our interest is that it has poked above its 100 day moving average which it had stopped dead against just two days ago.

We suggested that there was a rough estimate for a target of 7800 when it broke out of its downward sloping trading channel. It looks like the Dollar is on track to attain this. We like the chart construction. We think it is emerging out of a small accelerator pattern and although 7750 or so will be the next chart barrier we believe it will have the momentum to carry through to the near term target.

Looking ahead it would seem logical to expect and proclaim that a period of retracement and consolidation will occur. But anything can happen and usually does as we like to say. Markets that have been beaten down for a prolonged period of time frequently have a way of catching many by surprise. In the bigger picture, we would not be surprised to see the Dollar continue its ascent over a period of many weeks or perhaps months.

Interested in further discussion of this or other markets let us know.

Good Trading to all

Jeff
CB&S

Price Objectives: Dollar and Euro Futures

noreply@blogger.com (CBandS) — Fri, 11 Dec 2009 15:28:00 +0000

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Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

It seemed that all of a sudden there was a rush for the U.S. Dollar this morning. Looking at the charts above of the 240 minute Dollar Index and 240 minute March Euro Currency we can determine a few subtle hints.

In the Euro we see that the downward progression in price created a measurable extension pattern. Using the Fibonacci Extension tool we see that our preferred barometers provided by this tool (.618 and .750 extensions) came to approximately 14647 and just beneath 14600. There may be other ways to judge the pattern and it can be left up to individual interpretation or preference. We found consistency, though, with this particular one as it lined up with other shorter term pattern targets yielding the 14600 level.

Also in the euro we see a double top formed with the 15135 and 15137 highs of Nov. 25 and Dec. 3. From this the rule of thumb potential price objective is approx. 14500.

In the Dollar index there is conversely a possible double bottom formed. It is not as aesthetically nice or apparent as that of the Euro but it provides a near term ball park price objective of 7685 (basis spot month).

And earlier in the week we mentioned an intermediate trading channel breakout in the Dollar Index that projected approx. 7800.

These are some tools that we have outlined here that we find useful. These are also examples of some of the things we work on with trading clients. If you’re interested we’re interested.

Good Trading

Jeff
CB&S

The Dow Crash Comparison

noreply@blogger.com (CBandS) — Wed, 09 Dec 2009 21:10:00 +0000

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Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

What we wanted to show here with the charts above is a comparison of the Dow Jones during its bear market rally following the 1929 crash to that of this recovery rally witnessed since the low of March 2009.

We find it quite interesting and perhaps at this point in time still coincidental that the recovery off the 1929 low retraced just slightly more than 50 percent of the distance from the 1929 high to the crash low which so far is virtually the same percentage the Dow has achieved in its current recovery from the October 2007 high to the March 2009 low.

From that recovery high in 1930 the Dow Jones proceeded to fall by a larger amount than it did in the initial wave of the ’29 crash finally bottoming in 1932.

We are not prepared to say that the exact same scenario is about to play out. It is however curious and interesting that this recent nine month recovery achieves virtually the same percentage basis up to this point as it did in 1929. It has been less than a full week since the recovery high has been made but this is something that we felt worthy of mentioning in this space.

It is also interesting to note that the S&P 500 fell roughly just 2 points shy (1119.13) of reaching what would be its 50 percent retracement (1121.44).

Recent news events to keep in mind are those surrounding what may be turning in to a global debt crisis. The Dubai news and more recently downgrades to Grecian debt and that of the state of Illinois here in the U.S. Where will it end? Is it just starting is perhaps what should be of concern.

The good thing about the futures markets, which is our area, is that an investor or participant can be either long or short. Long when he believes prices will rise and short when he perceives prices will fall.

We can help you with this.

Good trading

Jeff
CB&S

U.S. Dollar Phase II

noreply@blogger.com (CBandS) — Tue, 08 Dec 2009 21:20:00 +0000

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Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

We return to the U.S. Dollar Index today as it has put in a rather strong performance. In one of our recent blog posts from last week we featured the Dollar and described what we refer to as a Stage One breakout. We believe we can term this most recent action of what is now the last three sessions, including today, as Breakout Phase Two.

In essence what has occurred and as illustrated by the chart above is that the U.S. Dollar Index has now broken out of a near to intermediate term channel as well as closing above its 50 day moving average for which will be the third consecutive close. We view these developments as positives for the Dollar. The channel breakout suggests an initial target of approximately 7800.

The effect of the declining Dollar on most every market has been chronicled throughout the financial news media. From the stock market to precious metals, energies and grains. If in fact the Dollar is preparing to make a “statement” and change its course the ripples could become widespread.

Good trading

Jeff
CB&S

Check in with us tomorrow. We plan to show something in the STOCK INDICES that should be of interest!

Determinig A Short Entry Silver Trade

noreply@blogger.com (CBandS) — Mon, 07 Dec 2009 21:54:00 +0000

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Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

We haven’t brought up the Silver market for a while probably because when it comes to the precious metals lately Gold grabs all the attention. But we view the picture this chart illustrates a potentially significant one. There is a well defined trading channel that was briefly breached through to the upside. Our observation over the years suggests that when a breach of this kind occurs and when the market returns back within its trading channel there is often an ensuing correction or at least an intermediate term change in trend. This is why we are bringing it up in our blog.

Below is what we wrote in out weekly Trade Focus regarding how to approach a short entry trade. There may be other parameters to consider and as we all know things have a way of changing to where one suggested approach will need amending. But the point is we believe there is cause to give a short entry strong consideration. It would appear easily that one would know where the trade goes wrong.

Written in December 3 Trade Focus:

Silver (Mar.) – We see that the top end of the trading channel has been reached and so far has contained the price advance. We believe we can suggest a short entry approach from a price level of 191500 or better. (Current price as we prepare this section is 190100). If elected we suggest stop protection with intraday penetration of 196600. Retracement levels of support are approx.: 181120; 176770; 172430. The next series below is approx.: 168840; 160700; 152560.

Another approach that would be worth consideration in our opinion would be closing beneath the 50 day moving average. It is often more prudent to allow for two consecutive closes but frequently when there has indeed been a change in market course and attitude, it is difficult to exercise that patience and sometimes the market does not allow for that type of patience.

Changing parameters and entry level approaches is something that often demands attention. This would be just one of the things we typically discuss with clients.

Good trading all

Jeff
CB&S

What Is A Market And Trend Made Simple

noreply@blogger.com (CBandS) — Wed, 02 Dec 2009 22:03:00 +0000

NO CHART TODAY

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Futures and options trading contain substantial risk of loss and may not be suitable for all investors.

Here’s a revelation. There doesn’t need to be a news event or a particular cause for a market’s going higher or lower on a given day. Market participants are often so much consumed with the need to find this “reason.” We believe the market, any market really, is bigger than singular events. And yes we realize that the universe is believed to have started as a result of a singular event but we believe what we are speaking of here regarding trading markets is a completely different sphere or theme.

A case in point is an associate posing the virtually age old question “how come with bad news the market went up and with good news it went nowhere?” Our response is that it didn’t matter. A singular news event does not a market make. Nor does a single day. We have often told clients that in effect for every bull there is a bear. If there was no disputing the bullishness or bearishness of a market there would be no trading in it. There would be no interested counter parties.

The point just may be that the market itself may be all we need to determine our participation. A market only needs one buyer and one willing seller at an agreed upon price at a given time. Get a bunch of willing buyers and sellers and soon a trend may well develop. This then becomes the market. This group and the agreed upon consequential trend. What causes any singular individual to participate is that participant’s belief in whether the price will be higher or lower at some point in the future whether it is within an instant or many days, weeks or months into the future. In the case of stocks that may translate into one’s perception of what future earnings will be.

What stops the market price from continuing its trend is fewer participants perceiving that buying or selling, whichever the case, at a specific market price at a specific point will reap a future benefit. Even with which may be bullish supply and demand fundamentals for a particular market the price may reach a level where it is perceived by a growing number of this collection of market participants to fully satisfy those conditions. And yes, even before those fundamentals have physically had the chance to be completely resolved.