Technical Analysis after the Rotary Club Whisky-fest!

Big Weekend EditionIt’s the middle of April and you know what that means? Yes, that’s right; it’s time for Whisky-fest! Each year about this time the local Rotary club hosts a Whisky-fest as a fund raiser. It’s a great opportunity to sample whisky from around the world and given the cost of a good bottle of the Water-Of-Life (that’s what “whisky” means in Gaelic) it’s nice to be able to try before you buy.

Aberfeldy 21 year old Scotch whiskeyI’m also a part of an informal whisky club with about a dozen friends of mine. We get together every couple of months to sample a bottle or two. The best part about our own club is the setting. It’s on a farm not too far out of town. The owner’s converted one of their “out-buildings” into an outdoor living room for lack of a better description.

The whole building is made of rough-hewn fir with hand cast iron hinges. There’s a big stone fireplace in the middle of the room, which is handy when we meet during the winter months. I don’t have the skill to do the room verbal justice suffice to say it is the “perfect” setting to be enjoying a dram of fine whisky.

Last year when I went to the Rotary Whiskey-fest I managed to keep very detailed notes about my tastings, at least at the beginning of the evening. As the night went on I had to resort to X’s and Stars as my note taking became increasingly illegible. I’ll try to do better this time.

[I got to finish the tasting before the ezine went out. This year’s winner: Aberfeldy 21 year old. Wow! What a treat. Heaven in a glass.]

Tomorrow the 2014 Profit Run begins! Looking forward to seeing many of you in the trading room. Please note, the CPR Morning Call and Big Weekend Edition will go out as normal.

In this issue we’re looking at the British Pound, Canadian Dollar, Japanese Yen, Mini – Natural Gas, Crude Oil, Oats, Soybeans, Sugar and of course the $10,000 Experiment.

Enjoy this week’s issue,

Erich
erich@supportandresistance.com

Papertrades:

Currencies Market Overview

British Pound

The Pound retreated last week after breaking significant resistance at the contract highs. I think we’re going to see another rally here, especially if we see new support around the 16650 (June) area. I’ll leave the current BUY order in play just incase the market bolts; however I would appreciate BUYing in at a better price.

If the June British Pound opens at or below 16820
BUY 2 June British Pound at 16825 (stop)(day)
If filled: Exit Stop: 16535 (stop)(GTC)
Approximate Risk: $1812 per contract
Profit Target: 17000 (limit)(GTC)
Approximate Profit: $1093 per contract
Degree of Risk: Moderate

British Pound Chart

Canadian Dollar

As expected the CD made a run at the 9100 (June) level on Friday even managing to break, and close, below that level. We could see another lower session come Monday; however if the BUYers are serious about rallying this market they’ll have to step in soon.

CONTINUATION of Long 2 June Canadian Dollar at 9100 (April 4)
Exit Stop: 9060 (stop)(GTC)
Approximate Risk: $400 per contract
Profit Target: 9300 (limit)(GTC)
Approximate Profit: $2000 per contract
Degree of Risk: Moderate to HIGH

Canadian Dollar Chart

Japanese Yen

The Yen is very much at a crossroads as prices interested the longer term Bear trendline. This “should” cause the market to dip lower this week; however at break of the trendline will nix the SELLer’s control of the market and that could result in a rally. I’ll stick with the longer term trend for now, but if we get a rally I’ll consider reversing the trade.

If the June Japanese Yen opens at or above 9800
SELL 2 June Japanese Yen at 9790 (stop)(day)
If filled: Exit Stop: 9880 (stop)(GTC)
Approximate Risk: $1250 per contract
Profit Target: 9600 (limit)(GTC)
Approximate Profit: $2250 per contract
Degree of Risk: Moderate to HIGH

Yen Chart

Energies Market Overview

Mini – Natural Gas

Watch List – I’m going to be reversing on Natural Gas and looking for a place to BUY and considered BUYing above last week’s high this week; however the problem becomes “where do I place me stop?” So as an alternative I’ve decided to wait for NG to look for support before BUYing. Of course this assumes it Will look for support before going higher.

Crude Oil

Watch List – Crude made big gains last week all the way to the contract highs. This is significant. A move lower is likely but the big question becomes “where will we see support?” If support comes early, ie. 10100 (May), then I’ll be BULLish. If support comes late, ie. 9800, then I’ll probably be BEARish. Right now I’m more BULLish however.

Financials/Indices Market Overview FLAT

Grains Market Overview

Oats

Oats slowed their decline a bit heading into the weekend which is to be expected, but doesn’t give me a warm, fuzzy feeling either. What’s happening is that there might be some additional buying by the Bulls on the way back to previous support at 380 (May). Monday will be an interesting session. If the SELLers continue to push the market, we should see an increase in downside momentum. If the BUYers hold support we might have to get more aggressive with our stops.

CONTINUATION of Short 2 May Oats at 408 (April 10)
Exit Stop: 440 (stop)(GTC)
Approximate Risk: $1600 per contract
Profit Target: 390 (limit)(GTC)
Approximate Profit: $900 per contract
Degree of Risk: Moderate

Oats Chart

Soybeans

Soybeans are getting more BEARish after last week’s rejection of the breakout above the contract highs. Notice how the market has fallen off since Wednesday’s breakout? That’s a sign that the BULLs might be losing their grip on the market. Of course there is still trendline support below the market; however I’m going to consider SELLing if prices break below recent support.

If May Soybeans opens at or above 1454
SELL 2 May Soybeans at 1453 (stop)(day)
If filled: Exit Stop: 1483 (stop)(GTC)
Approximate Risk: $1500 per contract
Profit Target: 1400 (limit)(GTC)
Approximate Profit: $2650 per contract
Degree of Risk: Moderate to HIGH

Soybeans Chart

Meats Market Overview FLAT

Metals Market Overview FLAT

Softs Market Overview

Sugar

Sugar continues to wedge up, so I’ll continue to run with the same trade. We should see a break either higher or lower this week, but since the entry is below sold support I think a break lower should be sustained.

If July Sugar opens at or above 1665
SELL 2 July Sugar at 1660 (stop)(day)
If filled: Exit Stop: 1750 (stop)(GTC)
Approximate Risk: $1008 per contract
Profit Target: 1500 (limit)(GTC)
Approximate Profit: $1792 per contract
Degree of Risk: Low to Moderate

Sugar Chart

The $10,000 Experiment

If I had more money I’d take the Sugar trade, but given that that would amount to about 10% of my trading capital it’s not worth the risk – even if the odds are good that the trade should go according to plan. In the meantime I’m on hold for Monday.