Friday 11 September 2009
Nov Beans sold off smartly, down 23 cents on the day, and continuing toward the 8.60 objective. We
began this short position back on 13 August, going short at 1033. Positions were covered down to 9.59,
and there were a few more profitable smaller trades.
The second leg of getting back on the short side was on 1 September at 9.54. Expectations were to
resell higher, but the market was weak and unable to rally very much. However, we did not lose anything
in being out briefly because of the other trading.
Beans are in the middle of a down channel, still unable to reach the upper portion of the supply bar, and
heading toward the lower portion of the channel. Friday’s wide range bar and low end close tells us
that sellers are clearly in control. Any rally attempts during Friday’s trade were anemic, and price sold
off on the close. The close was a wide range which was most likely staged for some short-covering.
Friday also broke the trendline off the mid-July low. Other than the close, there is very little indication
of positive demand activity. What remains to be seen now is HOW the objective of 8.60 is reached, if
price does go that low. If the bars are wide range, low end closes, 8.60 may be just a stopping point
to the 7.77 December 2008 lows, or somewhere in between.
We continue to recommend the short side of Nov Beans on rallies into resistance.
