What’s Up, What’s Down: Spotlight on Softs

Comments for October 24, 2011

Looking ahead to Monday by reflecting back on Friday’s trading

Futures and options trading is speculative in nature and involves substantial risk of loss. Futures and options trading is not suitable for all investors

BEARISH VIEWS ON THE SOFTS CONTRACTS

SOFTS: 10/24/11

LUMBER: Lumber setttled lower again the the January contract making a new CONTRACT LOW CLOSE obviously looking very bearish overall with some resistance around the 230(NOV) area. At first I thought a bottom could be forming but now it looks like a BEAR TRIANGLE in the November contract. SELL SIGNAL. CALL FOR DETAILS!

001 chart

COCOA: Cocoa settled slightly higher continuing to look very bearish overall falling since late Februray. Overhead,a key price to watch, in my opinion, is 2737 and a key close would be above 2700 both basis the December contract to potentially turn this market around. Also cocoa has been making lower highs and lows since the beginning of July. SELL SIGNAL. CALL FOR DETAILS!

002 chart

SUGAR: Sugar closed  with good resistance around the 2800(Mar,) area and support near 2500. In my opinion, sugar needs to settle over 2800 to have a chance of working higher overall. Like I’ve been recently saying the 2800 area was a good place to put on shorts if you’re bearish. SELL SIGNAL. CALL FOR DETAILS.

003 chart

COTTON: Cotton had its worst low since August 12th before settling higher in reversal type action still in its lowest area for support near a sell signal. Cotton has been in a roughly sideways trend since the middle of July and only between 10410 and 9809 with 9500 basis the December contract extremely important to hold. Meanwhile,I’m standing on the sidelines until I see a breakout in either direction.

004 chart

COFFEE: Coffee sharply higher giving me a second buy signal and more importantly closing over 24355 basis the December contract. I would be more comfortable with a close over 250(Dec.) which would help confirm a turn back higher in my opinion. However, it really is hard to complain about today’s high and close which was the best since around the 22nd of September. BUY SIGNAL. CALL FOR DETAILS!

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Rick Alexander has been a broker and analyst in the futures business for over thirty years. He is a Vice-President for Sales and Trading at the Zaner Group (www.zaner.com) a Chicago-based futures brokerage firm. Email Rick at ralexander@zaner.com or call toll-free (888) 281-4158.

Futures and options trading is speculative in nature and involves substantial risk of loss. Futures and options trading is not suitable for all investors. The information in this Report and the opinions expressed are subject to change without notice. All known news and events have already been factored into the price of the underlying commodities discussed.