August 14, 2009

Building Wealth Through Commodity Futures Trading

Week of August 14, 2009

CHARTSMITH Weekly Market Update

Greetings fellow traders!

Welcome to the "paper trading" market update for the week of August 14th, 2009.

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It's been an amazing week in the markets with big moves to say the least! There's a lot of market opportunities in the works so let's get started...

Cotton
December Cotton futures closed Friday at 61.12 cents per pound. Cotton gave a confirmed buy signal on Wednesday, however, we did not take this buy signal due to the market's price advancing well into the Mid-Zone before the signal was generated. This also increases the risk-to-potential reward. We'll wait for a large pull back in cotton before entertaining an entry point for now...

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

Eurodollar
The Eurodollar closed out the week at 99.56 basis points. Still watching for a short entry signal to develop utilizing the tools...

Note: Open Interest is dramatically increasing in the December 09' contract month so this will be the contract we'll be monitoring beginning this upcoming week.

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
The front month based on Open Interest has switched from the September contract to November 09. Lumber closed lower this week at $187.00 per 1,000 Board Feet.

We'll keep watching for a buy signal...

To view the chart go to: http://futures.tradingcharts.com/chart.php?cbase=LU&market=LB&cterm=B9

Natural Gas
October 09 Henry Hub Natural Gas closed lower Friday at $3.638/mmBtu on GLOBEX. The market fell to recent support testing the 3.584 low made on July 13th, 2009.

MACD & 4, 9, & 18 day MA lines are bearish. Further lows are possible.

Stay tuned...

To view the chart go to: http://futures.tradingcharts.com/chart/NG_/A9

Orange Juice
November closed this week at 104 cents per pound on the NYBOT.

This past week we watched this market explode upwards nearly 10 cents and then OJ sold off nearly the same on Friday. The buy signal on Tuesday was not a valid buy due to the market's rise into the Mid-Zone, similar to what occurred in cotton.

We'll keep watching for an opportunity to develop. A break to further lows in the next few weeks could position the next buy signal more appropriately in the wholesale zone.

To view the chart go to: http://futures.tradingcharts.com/chart/OJ/B9

SUGAR
The March 2010 contract peaked on Wednesday at 24.78 cents per pound, closing down on Friday's trading session at 23.50.

Averaged-in option premium presently @ 2.07 points per Put with a draw down of $291.20 each, on Friday's close. (1 point = $1,120)

Note: Refer to chapter 11 of ChartSmith-Forging Your Financial Future for more details on the Sell High-Buy Low trade setup.

To view the daily chart go to: http://futures.tradingcharts.com/chart.php?cbase=SU&market=SB&cterm=30

U.S. Dollar Index
The US Dollar Index closed the week at 79.00 points.

We'll keep monitoring for a possible long-side entry point to develop!

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 low risk, high profit trade setups are included in the book, ChartSmith-Forging Your Financial Future.

This week's Commodity Trader's Recipe--yummy, yummy! Looking for more "sweet" ideas? Other Commodity Recipes are available here.
Sugar-Free Apricot-Orange Oat Muffins

ingredients:

1 1/4 cups unbleached flour

1 1/4 teaspoons baking powder

3/4 teaspoon baking soda

1/4 teaspoon salt

1/2 cup all fruit apricot jam

2/3 cup orange juice concentrate

1/2 cup apple juice concentrate

2 1/2 Tablespoons canola or safflower oil

2 egg whites or 1/3 cup egg white product

1 1/2 cups thin-rolled (quick) oats

2 Tablespoons water, only if too thick

instructions:

Preheat oven to 350 degrees.

Sift together flour, baking powder, baking soda, and salt. Set aside. In a separate bowl, lightly beat egg whites, and stir in all liquid ingredients. Pour liquid mixture over dry ingredients, and mix with a fork, just until moistened. Then gently fold in oats.

Fill muffin cups 3/4 full, and bake at 350 degrees for 17 to 21 minutes. Muffins are done when a toothpick inserted comes out clean.

Let cool 10-15 minutes for non-stick removal of paper muffin cups. Serve warm or at room temperature, not refrigerated. Makes 1 dozen muffins.

Quote(s) of the Week

...only make a big move, a real big plunge, when a majority of factors are in your favor. ~Jesse Livermore, legendary stock & commodity speculator

There is always room at the top. ~Daniel Webster

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

To your continued prosperity!

Scott and the ChartSmith Team

ChartSmith-Forging Your Financial Future debuts on Amazon soon!

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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