Sell Target gets hit, Buy target gets hit.. Now What?
I watched a client ride a 12 cent winner to a 35 cent loser back to a 23 cent winner in the past 4 days.
I suggested all along he have protective stops. He declined to use them. I can’t force some one to take my advice.
After 23 years doing this, I think I might have some insight to pass along, but some people don’t seem to value that experience.
They want your council until it goes against their ideas, then they ignore it. If they are wrong in their decision, there is silence. If however, we exercise discipline and absorb a small loss, only to have the market shortly reverse once again go the original position’s way, well then, I as the broker/risk manger was “wrong”.
Its a heads I win, Tails you lose approach to trading advisory, that quite frankly, I hate.
Which brings us to the second question. Why are you trading? IF its for any thing other than to make money consistently, then you are bound to eventually over time, lose any profits plus your original trading stake.
If you are trading for excitement, look out. If you are trading because you are bored, look out.
If you are scared money or thinly capitalized, trying to make it on a shoe string and absolutely needing to make money trading in order to pay the mortgage and buy food…. Again… my advice… “Look Out.”.
Ok, I think I’ve made my point.
Markets: Grains: New crop has rallied 60 cents in the past 4 days, after breaking 70 cents from its highs in a matter of 2 weeks. Any guru who told you they called this action before hand is either 1) a liar 2) delusional 3) kidding you or 4 a a combination of all three.
New crop corn has broken above a channel by settling above 660 today. That potentially opens up a run to $7.00 or higher. If we fail there however, there is 2.50 cents of nothingness below to support us. Beware. Like Icarus, how high is too high? We’ll know when the wax melts in the artificial bird wings.
In the beans, In new crop, I am short, but risking only 35 cents. If SX settles above 14.00 then that opens the door up to another leg up, possibly to 15.55
I am short here, and not feeling too good about the position.
I do know, however, that no matter what happens, I have my down side risk limited with the use of some well placed buy stops.
In old crop SN, We have to settle above 14.13 to turn firmly bullish. Until then, we are drifting sideways in a wide one dollar trading range. Support in SN comes in down at 13.25.
Guessing which way the market will break out of here is a coin flip. You have three possibilities: Don’t kid your self 1) sideways chopp fest 2) a return to the bull move or 3) the break lower to pay off the bears. It doesn’t matter which way it goes. Only 2 of those will make you money. Manage your opinion and let the market tell you where its going.
In the wheat, we have a major triangle formation going all the way back to Jan/Feb high in WN on the daily charts.
Look at the Feb high at 9.50 then the April high at 8.60. Below there is a trend line at the March low at 6.91 and then the may low at 7.23. WN has to move above 8.40 to turn really bullish. Other wise we could drift back down to 7.40.
In the Stock Indexes, we’ve all heard sell in may and go away. may is 1/2 over. We had a break back to the 12,400 level. It had been resistance. Now it proves to be support. We couldn’t challenge it in Dow cash by more than 35 points.
The low tick was 12,355.
I had some buy stops triggered once we traded above 14,005, but I really wanted to buy a break lower. Now that I have a small long position, I am looking to sell it at 12,590 and 12,650.
Finally, for tonight, I looked at the US Dollar. We rallied back to our April high at 76.00, flirted with 76.20 and now may take a breather. The 3 cent rally from 73 means we could have a 1.5 cent break down to 74.50. That’s a level I would buy.. 76.80 and 77.60 are levels that longs should be liquidated.
I am currently standing aside in gold and silver until I see something worth doing. Crude oil, Trade around the 100.00 level fulcrum, but for now it looks like the rest of the world is trying to do the same thing. Wait for a more definitive move.
Don’t trade just to trade.
Ok,
That’s it for tonight.
Good Trading
CER