Sugar rallies a little from the lows but outcome still unclear. The big negative candle we saw yesterday was not followed up with another negative candle but at the same time the response wasn't significantly positive either. Definitely the right time to wait another couple of days so I and feeling positive that the market did not take out the old lows but at the same time the bounce from yesterday's close was relatively small so we will have to wait and see. There is definitely some strong selling interest in sugar at the moment but it's more a case in my mind of whether those parties have the ammunition to take it down through the 13 cent level or whether they run out of bullets and have to cover in which case I think we would see a sharp rally. Either way I'm just watching to see who's going to win and will either have to cover my position if the sellers win or continue to sit if the bulls manage to fight off this attack.
Cotton tries to bounce. Cotton tried to bounce overnight from the 77.50 level and pushed as high as the 80 cent level before fading back to close around 78.35. Whilst the session overall closed higher from the open this was a slightly negative signal and I think probably indicates the price is going to drop again towards the 74 to 75 cent range. Whether it holds there is another matter but at the moment best to wait on the sidelines.
Thanks for posting your rationale. Do you have a checklist that you go through across all ag products 9/all products) or were these just some considerations you checked because of your experience / picked up from your regular reads?
Cotton. Cotton still feels like it's got a little bit further to go on the downside before we can really look at the bullish trend resuming. The attempted rally on Thursday which failed and then sold off last night towards the 77.30 level just reinforces my view that we will probably see a little bit more weakness.
Cocoa takes the second step towards a break. The cocoa price till the second step of a small positive move higher last night after the initial breakthrough and close above the 200 day moving average on Thursday. The signs are encouraging however previously there has been resistance at the 2200 level so in the short term I will be just watching to see how the price responds at that level. I did go long last night with the fill around 2020. Just going to stay with one unit so far because in the short term I would expect a break to be confirmed by coming back to the 200 day moving average and then bouncing again from there.
Sugar takes one more step towards recovery but still very tentative The overnight move was another step in the right direction for my long position in sugar so will again be watching the next session on Monday US time as to whether the price can surpass the resistance at 13.70. As previously mentioned there should have been a lot of momentum for the bears after failing to breakthrough the downward-sloping 200 day moving average and then making a new low however they have not been able to go on with it so far so just have to keep my eyes on the price.
There are some things you may check for every product : COT, front spread movement, classic technical analysis, seasonality...But some other factors just relates to a particular market : fundamentals, currency factors depending on the biggest producers/users, VSR for wheat, interrelations with other products( vegetable oils, different coffees, wheats...)...
Flip flop on SB. Long SB May@ 13.85. -Front spread trending. -Record spec short. -Double bottom on major resistance.
Sugar fights back, manages to escape the bears clutches... for now. Surprisingly strong candle posted by sugar yesterday after the big negative effort by the bears on the 31st of January. The fact that they were not able to take out the previous lows on the 18th and 19th of January and now have posted three positive candles in a row lead me to think prices are heading higher towards the 200 day moving average. What was also encouraging was from the open prices sold off down to the 13.30 area before rallying all the way to a strong close at 13.90. I would think anyone with a short position open recently on the move from the 3rd of January to the 18th of January probably has to close that now and either take profit or cut their losses. The 200 day moving average is coming in around 14.77 so I plan to take off one unit upon reaching that and then see if it pushes higher or fails before taking off the second unit.