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    CHARTSMITH Weekly Market Update    

Welcome to the paper trading market update for the week of July 31st, 2009. 

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Greetings fellow traders!

We have some exciting market events to look at this week.  Many of these are truly golden opportunities in the making--so with that let's jump right in...


Cotton  
Close to another buy signal!

The December futures contract for Cotton closed out the week at 60.02 cents per pound.  MACD 12 & 26 are holding above the zero pivot point but the 4-9-& 18 day MA lines are not coordinated yet.  We'll keep watching for a possible entry point to develop.

Note: When we view the Triple Zones on U.S. Chart Company's long range Monthly chart of Cotton it looks like prices are closing in on the top of the Low Zone again.  Just like our last trade in Cotton, the idea here is to keep risk control neatly in place using stops if/when we receive a buy signal.  We won't give this a lot of room-to-roam, however, this has been a profitable market and their is clearly a strong uptrend in place for further potential profits. 

To view the daily chart go to: http://futures.tradingcharts.com/chart/CT/C9


 Eurodollar
The Eurodollar closed higher this week at 99.505 basis points.  A price channel continues to develop.  Every week this moves higher our maximum risk moves lower--risk exposure to 100 at this Friday's closing price is now only $1,237.50 per contract.  Can you see why we get so excited about this business!?  Stay tuned...

A quick reminder:  although this market is near all-time highs and our trading plan includes selling the Eurodollar short, please keep in mind that this is not the same as the RSI Sell High-Buy Low trade setup.  This is, for all intents and purposes, the Buy Low-Sell High trade setup turned upside down because we can quantify maximum risk to 100 basis points which is hypothetically the same as a market in the Low Zone going to absolute zero.  

For further details see the special report, EURODOLLARS—the Perfect Storm?.


To view the chart go to: 
http://futures.tradingcharts.com/chart/GE/99

 Lumber
September 09 Lumber closed this week at $196.10 per 1,000 Board Feet. 

The $180 support area is still firmly in place on the chart.  4-9-& 18 day MA lines have coordinated properly.  We're watching for MACD to confirm a longside entry--Keep watching...
 

To view the chart go to:  http://futures.tradingcharts.com/chart/LU/99


Natural Gas
September 09 Henry Hub Natural Gas closed lower this week at $3.653/mmBtu as tools start to consolidate.

Note: The September contract's Last Trading Day (LTD) is August 27th.  Open Interest of 197,000 contracts makes this the current front month, however, in the next couple of weeks traders will transition to the October contract which presently has 92,000 contracts open.  Because of this we are beginning to monitor the October contract and will begin viewing it as the front month beginning in next week's Update.

To view the chart go to: http://futures.tradingcharts.com/chart/NG_/99

Orange Juice
September 09 FCOJ closed lower this week at 91.30/cents per pound on Friday. 

MACD is holding nicely above the zero pivot point.  OJ is close to completing a 50% retracement from the recent low at 75.65 and the high at 104.85 ; look for a bounce soon. 

Keep watching for an entry point to develop...

To view the chart go to: http://futures.tradingcharts.com/chart/OJ/99

Sugarcane growing tall... SUGAR 
New to the ChartSmith Watchlist!

Officially called Sugar #11, Sugar has been trading in an upward trend for many months now on the New York Board of Trade's electronic ICE platform.  As the front month price nears the highs of 19.73 cents per pound made in January of 2006 the significants of this event becomes astounding looking at a long term Monthly chart.  

Here's why:  if sugar breaks through this level we'll be looking at 28-year highs!  Yes, that's a 2 and an 8 my friends and this is where the RSI Sell High-Buy Low trade setup as described in ChartSmith-Forging Your Financial Future comes into play!!

For now we'll be watching to see if this market goes vertical--stay tuned!

Final thought: to view a Monthly chart of Sugar go to http://futures.tradingcharts.com/chart/SU/M. This will give you a 9-year snapshot of what we're monitoring.  If you enjoy a longer term view of prices like we do, U.S. Chart Company online offers Monthly charts that go back as far as 1972!

To view the daily chart go to: http://futures.tradingcharts.com/chart.php?cbase=SU&market=SB&cterm=A9


 U.S. Dollar Index 
 
 
The Dollar continues to fall after midweek profit taking!

With a plunge on Friday the US Dollar Index touched into new lows during its trading session settling the week at 78.45 points.  Will it continue to fall deeper into the Low Zone?  We'll keep monitoring for a possible long-side entry point to develop! 

The U.S. Dollar Index is represented in Points.  1 point = $10 USD


To view the daily chart go to: http://futures.tradingcharts.com/chart.php?cbase=US&market=DX&cterm=99



ChartSmith monitors commodity futures markets in the Low (wholesale) Zone for the Buy Low—Sell High profit opportunity and the High (retail) Zone for the Sell High—Buy Low profit opportunity. Complete details for these and other exciting low risk, high profit trade setups are included in the book, ChartSmith-Forging Your Financial Future.

 Quote of the Week Start where you are. ~Christopher Gardner

If you worried about falling off the bike, you'd never get on.   ~Lance Armstrong 

Cut sugarcane from Barbados.Commodity Recipe of the Week--this one is extra sweet!
 From our Company Commodity Goodie Cook, Shawna Jones

This recipe has been a family favorite since I was a young girl. I’ve replaced the shortening with butter but the rest is pretty much the same. Warning:  they take a long time to make and it’s a good thing too, because they’re so yummy you’ll want to eat them all!


 sugar cookie dough:

  • 2 1/4  cups unbleached all purpose flour
  • 1 1/2 teaspoons baking powder
  • 1/4 teaspoon salt
  • 3/4 cup (1 1/2 sticks) unsalted butter, room temperature
  • 5 TBLS. milk
  • 1 1/4 grated orange peel
  • 3/4 cup sugar
  • 1 large egg

Preparation


Sift flour, baking powder and salt into medium bowl. Using electric mixer, beat butter, orange peel, and milk in large bowl until light. Add 3/4 cup sugar and beat until fluffy. Beat in egg. Add dry ingredients. Using spoon, stir until mixture forms dough (dough will be soft). Divide dough into thirds. Gather each third into ball; flatten into disks. Wrap each disk in plastic and refrigerate until firm, about 4 hours. (Can be prepared 2 days ahead. Keep refrigerated. Let soften slightly, if necessary, before rolling out.)


Shaping and baking cookies:


Preheat the oven to 350°F. Generously flour work surface and rolling pin. Place 1 dough disk on work surface (keep remaining 2 dough disks refrigerated). Press rolling pin into dough several times to flatten slightly for easier rolling. Roll out dough to 1/8- to 1/4-inch thickness, frequently lifting and turning dough to prevent sticking. Using assorted cookie cutters dipped into flour, cut out cookies. Transfer cookies to ungreased nonstick baking sheets, spacing 1/2 inch apart. Gather dough scraps together and reserve.


Bake until cookies turn brown on edges, about 15 minutes. Let cookies stand on sheets 1 minute. Using metal spatula, transfer cookies to racks and cool completely.


Repeat rolling, cutting and baking with remaining 2 dough disks as described above, being sure to cool cookie sheets before making each batch. Combine all reserved dough scraps and shape into ball; flatten into disk. Wrap disk in plastic and freeze until firm enough to roll, about 30 minutes. Repeat rolling, cutting and baking as described above. Store cooled cookies in airtight container at room temperature until ready to decorate.

Powdered sugar icing:
This recipe makes about three cups of icing, left over icing (if any) is yummy between graham crackers. 

1/4 cup water

1tsp. vanilla

½ stick butter (soften)

8 cups powdered sugar

Assorted food colorings (such as blue, red, yellow and green)


Combine butter and half of sugar.  Beat with mixer. Add remainder of sugar, water, and vanilla. Whip until fluffy. (add more water if needed a tsp. at a time)

Divide into bowls for as many colors as you desire. Add different color to each. Frost and enjoy!  I always employ my children for this part because they get so creative.  Add candy toppings for a more festive look and taste.


                                                                                                  Smile

Thanks for joining us for this week's paper trading market update.  As always, we appreciate hearing your thoughts and ideas, and your trading successes and learnings.  Please feel free to email us anytime at scott@mychartsmith.com.   

To your prosperity!

Scott and the ChartSmith Team


PS:  We are grateful to all of you for sharing this exciting business of commodity futures trading with your family & friends.  For those of you that ordered ChartSmith Trader's Kits this week you can expect to receive them in the next couple of business days. 

At this time we only have eight ChartSmith Trader's Kits remaining in stock and only eight days to go before the Amazon book debut.  Let us know if you or a loved one would like to secure one of the remaining Kits or simply visit the Special Reserve page at
http://www.mychartsmith.com/id34.html to place your order today! 

Happy trading and continued prosperity to you & your family! 
~Scott and the ChartSmith Team

ChartSmith-Forging Your Financial Future

Please read our IMPORTANT NOTICE: Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. Nothing in our commodity futures workshops, website, or newsletter shall be deemed a solicitation or an offer to Buy/Sell futures and/or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed during the workshops or on our site. Also, the past performance of any trading methodology is not necessarily indicative of future results.


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