I did not see that drop coming. Thinking about going short on the back of that large volume and move below 13 cents.
Sugar with a knock out punch drops below 13 cents. The candle posted on Tuesday by sugar has reversed my thinking about the structure of the last 6 months. Rather than being a medium term bottom, with buying in the mid to high 13 cent area - the sell off from the 200 day moving average at the start of January now looks like a continuation of a downtrend. The large volume and size of yesterday's candle would suggest to me prices could move significantly lower from here. The February 2016 low around 12.50 is the short term target but with impulsiveness we could see prices collapse towards 10 cents. Going to put on a short of one unit tonight with a stop just above 13 cents targeting 10 cents on the down side, the August 2015 low. If it does break below 12.50 then I would likely take profit as it approaches 10 so somewhere in the range of 10.3 or something like that. If it makes slow going around 12.50 then after 4 or 5 days of indecisive price action I'll call it quits and get out.
Cocoa reaches short term target, where to next? Cocoa has reached it's short term target of 2235 in last night's session more easily than I expected. Given the ease of the move until now I'm inclined to think this trend is a little stronger than I thought and it makes sense to sit on the existing position instead of take profit. There has been some divergence recently between the behaviour of sugar and cocoa. On the sugar side my inclination to take profit on the 10% price move of sugar off the lows I think might have been clouding my judgement when looking at the cocoa trade. Now the 2 have more clearly diverged I'm going to make a call to stay on the seemingly stronger trend in cocoa and reverse my position on sugar which I closed out on February 17th. When I put on the cocoa trade I was thinking to take profit when we reached this point thinking it would be quite an achievement for the price to make it this far and the smart thing to do would be to take the profit off the table. As mentioned the price move has been very rapid and smooth so I'm going to wait tell surprise hits some resistance before taking profit, risking some of my paper profits.
Has anybody kept track of Dave Hightower calls? It seems like he is Gartman 2.0. I haven't followed a lot of his calls but each time it was terrible. Today he wants to buy soymeal puts...
Still holding my KWN18/ZWN18 until the crop breaks dormancy. Also long some MW N18/U18 but it hasn't really moved yet. But I am ( obviously ) missing the outright action.
sugar... in the fight of the century?! I'm really not quite sure what to make of this. Wednesday's reversal day should be a major signal of a bullish outcome and was on similarly large volume to Tuesday's session. What has me concerned however is the price closed below the open of Tuesday's big sell off. It almost looks like a piercing pattern but doesn't fulfill all the criteria. So I'm going to do what I always do when I'm not sure what's going on and head to the sidelines. It definitely looks like some significant price action is taking place in the last two sessions however the resolution in my mind is not clear. I will wait for the market to show me the way before acting again.
Cocoa consolidating and I want to take some risk off the table. At the moment cocoa looks like it is slowing down compared to the recent momentum. I think Wednesday's session qualifies as a day of uncertainty for me and it was a high volume day. I think the wise thing to do in the short term is to scale back my position to one unit at the open tonight. Obviously I have to wait and see where the open is before trading. In reality I will probably watch the first few minutes trade and if it opens higher then I will let the position run but if it opens flat or lower I will probably head for the exit on most of my position except for the initial one unit. The biggest pull back in the rally off the low on 22nd December has been around 100 ticks. Anything more than that would suggest a correction or worse. That's to deal with my FOMO if the market bolts higher and the uptrend remains intact. It has been a good one so far but I feel like I need to take some of the risk out of the trade.
Ethanol is trading sideways at the moment in a very tight range around the same level that I initially got in. I'm just waiting for the next definitive move in order to either add to the position or to exit. It's clearly trying to close above the 1.50 level but has been shut down every time so far.
Apparently, I just got stopped out 1 day too early "Ystdy's sugar11 dlvy where Alvean, a large producer (Cargill+Copersucar), TOOK delivery of 7,945 contracts is understood to be an indication of large diversion of sugarcane to ethanol in Brazil+turning to the exchange for supply to meet physical sugar commitments. Constructive."