Futures Options Trading Market Updates
Futures Options Trading Market Updates For 1 Oct 2010
On 1 Oct 2010 (Friday), corn hits the lows of the day trading below the uptrend line. If prices rebound next week that means the trend remains up and new longs can be considered. It’s important to note that the market is becoming more volatile as prices near yearly highs. Even though the USDA report was slightly negative, it doesn’t elevate the bullish case.
Soybeans traded lower below the suspected neckline without forming the right shoulder. 1097.0 is the neckline support low and if it holds, a rebound shall develop next week and the right shoulder shall develop too, this could be a resumption of the uptrend.
On the other hand, the wheat market traded lower Friday with prices below the 50% level.
Now let’s have a look on the Softs. The cocoa market had a very large down day on Thursday in what some consider a flash crash but prices recovered quickly, then traded lower again on Friday. This new volatility shows the importance for traders to include trading options buy using them as futures stops or as a standalone strategy because of being stopped out prematurely with regular stop placements.
After breaking out of its sideways channel in July, Dec. coffee remains in an uptrend. The coffee market is getting more volatile, you may remain long but keep an eye for a top to develop. A closing price below the trend line is the signal to close longs and consider shorts. Put option spreads and short futures with put protection.
March sugar traded slightly higher Friday after falling hard yesterday. A rebound higher from today could develop the right shoulder of the possible head and shoulders top.
The cotton market traded lower Friday with end of week profit taking and in sympathy with the grain markets. Uncertainty with crops and the fact that high prices are not reducing demand tells us that the long term up trend line should be solid support. In fact, a retracement back near the up trend line is almost a 50% retracement and would setup a longer term buying opportunity.
The January orange juice chart shows no trend at all, though the seasonal trend points higher through winter. However, there is a new #1 point in January OJ at 167.10