Wednesday 9 September 2009
Time for a revist in Nov Beans. Nov Beans have been very good to us. We first
got short from 1033 and covered, went short again a few times, covered, making
well over $1, and went short again at 954 on 3 September, still looking for 8.60.
It could well be that 8.60 will not hold, and the lows of 7.80 would then become the
next target.
The chart shows the resistance high of 840 back in mid-July. That resistance
became support on the strong gap up rally on 30 July, and that new support was
successfully retested in mid-August, three times. Price flirted on both sides, briefly
for the past four trading days. The low end close at 922 on 4 September looked
like a “stuffing”-type of close that traps shorts. Volume declined on that day which
said there was not a lot of supply pressing the market to go lower. We had to
watch subsequent developing market activity to ensure no change of tend behavior was in the making.
On Tuesday, the second to last bar, Nov Beans rallied on increased volume, but
note the smallness of the trading range, or so it would seem. The small gap up
from the 922 close gives the bar a wider range when the gap area is taken into
consideration. That meant the increased volume and upper range close could rally
beans back to 955, at least potentially.
Today’s activity showed the volume was more of a short-covering rally, and by the
close, beans sold off, once again showing weakness. Still, the small trading range
low of 921 has not been exceeded, so no assumptions can be made until the
market proves itself by exceeding that low.
The 1063 high to 945 low, marked “A” on the chart shows a decline of 118 cents.
From the retest rally high of 1017 on 28 August, marked “B,” “B” would = “A” at
899, just a simple equality measure that sometimes acts as a guide. 899 is also
near the lower portion of the July trading range that may act as support. How price
responds in that area will determine whether to take some profits, or not.
We remain negative Nov Beans, and the trend is down, in harmony with the short
position.
