MARKET UPDATE - GRAINS, MEATS, SOFTS

MARKET UPDATE
JUDY CRAWFORD
TRADES FOR FRIDAY, NOVEMBER 16, 2017
888-301-8120
jcrawford@zaner.com

EMOTION is your enemy more than any market will ever be.

COFFEE SETTING UP TO EXCEED THE SEPTEMBER RALLY? The last decent rally in coffee occurred in September. That one produced a 16.00 rally. The rally in September was the product of a breakout from a two week consolidation. Since mid-October coffee has been consolidating for over a month this time. Technically, the longer a market consolidates, the bigger the move. The technicals on all the charts lean towards a breakout to the upside. Adding to that the daily chart has two gaps above the market and markets like to go back and fill gaps. The first is at 133.75 and the second up at 137.70 (basis the March contract). But potentially this rally should exceed those levels. Measuring from the consolidation coffee could reach for 144.00. See below under Trade Suggestions for more details.

GRAINS: Their main problem technically is resistances right overhead. Bean oil is the most constructive and likely to rally. Wheat struggles for a bottom.

MEATS: Both hogs and cattle technically suggest more selling. They are overdue for some sort of rally (near term) and struggling to do so. If a rally develops it should be a shorting opportunity. See below for more detail.

SOFTS: Cotton, cocoa and sugar are potential buys that need to be watched. Coffee appears to be setting up for a bigger rally than the one it produced in September.

METALS: Gold and silver still unclear. Their long term charts still suggest more selling as they consolidate on their daily charts.

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TRADE SUGGESTIONS: All trades suggested are for the day session only. I do not enter trades for the night session. The purpose of the trade suggestions is to help traders establish the habit of having a complete trade organized prior to entry so that you can determine whether the "risk/reward" is warranted. Too many decide to enter a market and then figure out a protective stop "later." What that usually means is that a protective stop is never placed! The key to trading is to establish good trading habits and that is the first habit to develop.

Buy March coffee. Buy 130.95 stop. Protective stop 128.90. Potential projection 135.50. (Potential risk $768.75. Potential reward $1706.25). Margin: $3630.
Reasons for the Trade:
1. On the monthly chart the recent selloff held at the uptrend line. That is support.
2. The weekly chart triggered a buy last week.
3. On the weekly chart the value line is now over the average line on the macd. This is the same setup that has developed and produced the extended rallies twice before this year.
4. On the daily chart coffee has been consolidating for over a month suggesting a bottom.
5. On the daily chart coffee rallied over both the 10 & 20 avg. last week. It has held that gain on a closing basis since. That is positive.
6. Today was an inside day that can trigger a signal and market direction.

GRAINS: Switching to Jan and Mar contracts.

MAR CORN: A new low today at 348 3/4. A sell signal last month on its monthly chart continues to suggest 340 as the target. Closed 349, down 2.0.

MAR WHEAT: I tried to buy wheat yesterday. It sold off instead. Today it is holding yesterdays low. Watching closely possibly for a buy. Closed 438, up 1/4.

JAN BEANS: They are holding the 975 support on their daily chart. They still have a buy on the monthly chart but have to close over 1000 to get out of their rut. It is their weekly chart that is the nightmare. For three weeks they were holding above the 10,20 & 100 that all cluster together around 982 to 985. They failed that support area this week and are right back down to the 970 support. Technically (on the daily chart) they are in an area where they could have a near term rally to set up for a third wave down but with resistance all over the place on more than one chart, it is best to watch. Closed 972, down 4 1/4.

JAN MEAL: It is stuck right under resistance on its daily chart. And it has a sell signal to add salt to the wound. Like beans, it has a buy on its monthly chart but battles resistance there too as it does on its weekly chart. And that has a sell signal too. These negatives suggest more selling before any extended rally develops. Closed 312.50, down .90.

JAN BEAN OIL: After yesterdays rally it has stalled today as it is up against resistance. Some retracement of that rally would be a buying opportunity. Watching closely to buy. Closed 34.59, down .29.

MEATS:

FEB HOGS: Switching to Feb contract. They continue to hold the support they reached yesterday. But the 50% retracement that comes in above the market at 67.40 approximately is resistance now. The fundamentals mentioned yesterday are negative. Their inability to hold their gain above their 200 avg. on their monthly chart is negative technically. Just watching. Closed 66.57, down .87.

FEB CATTLE: Switching to Feb contract. Their weekly chart is triggering a sell this week. Theres some support at 124.00 but stronger support down at 122.00 on that chart. The reversal top forming on the monthly chart isnt helping either. On their monthly chart the recent rally met projections. If the correction to that rally matches the previous one, they could sell off to 118.00. The weekly suggests the same. If they can rally to 127.00 or 128.00 near term it would be a shorting opportunity. Closed 125.12, down .62.

JAN FEEDERS: They are attempting to hold at the 153.00 support on the daily chart. A rally to 156.00 would be a shorting area. They are forming a reversal top on their monthly chart too. The macd on their weekly chart now has the value line under the average line. Thats a negative. It has done that three times before this year producing selloffs more extended than what feeders have done so far. A potential target, based on earlier selloffs, is between 150.00 to 148.00. Closed 153.90, down .35.

SOFTS:

MAR COTTON: Switching to March. Anyone watching cotton must be bored by the tedium of it as it churns around going nowhere. On the positive side, it is back over the 200 avg. on its monthly chart. Keep in mind this has been the road block for cotton since it failed that average last June. It has gotten over it but to stay above it has not been going well. And that reversal top on the monthly chart in September hasnt helped either. But what is different this time is that on its weekly chart it has been trading above all the averages for the last two weeks. That is important now because for the first time all the averages (200,100,20 & 10) have been clustering together for the last three weeks. So that is technically good support now and that should be helpful. Bottom line, cotton is technically giving an indication of a setup for a rally. Watching closely to buy. Closed 69.18, up .34.

JAN ORANGE JUICE: It is making another attempt at the 170.00 resistance on its daily chart. On its monthly chart it has gotten over its 20 avg. for the first time since it failed it in Feb. On its weekly chart it closed over the 100 avg. last week for the first time since it failed it in April. It has held that gain this week. Long term it appears to be starting another major wave up. Watching closely to buy. Closed 166.10, up 3.10.

MAR COFFEE: Switching to March. This is the most extended bottom it has developed so far to set up for a rally. The previous one in late August/early September was for two weeks and produced a rally of over 16.00 points. This time it has been consolidating for over a month. Technically that should produce a larger rally. A trade could be developing. See Trade Alert for details. Closed 130.15, up .05.

MAR COCOA: Switching to March. I have been waiting to buy. Last week it broke out of its huge bottom that it had been forming since early this year on its weekly chart. So far this week it has been backing off and appears to be testing that breakout. Technically both the weekly and daily chart suggest there could be more to this selloff. Watching closely to buy. Closed 21.40, up .11.

MAR SUGAR: Switching to March. I have been waiting for a setback to go long. Today it made a new high and has taken out the Sept 15 high of 15.20. Still waiting for a setback to go long. Closed 15.26, up .17.



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