This week's primary analysis focused on, "The Interest Rate Conundrum." Since this is a macro piece, I thought I'd review the last bits of trading in more detail. The trades over the last two weeks are a great look into the real world of discretionary trading. We've had a loser that bounced back as quickly as it knocked us out (sugar), a non-event of a trade (bean meal), a nice winner (silver) and another fish on the hook (hogs). If we can land the last one, it's a decent week trading....warts and all.
We experienced the frustration of being stopped out of the sugar market with a loss as it snaps back in our predicted direction. This is always the most frustrating part to me, personally. It becomes an issue of timing. The analysis is solid from, "Time to Sweeten on Sugar," but risk must be quantified. Second guessing the stop placement price is a useless exercise. We bought the market around $.1310 and got stopped out around $.1260, a loss of around $670 per contract.
Meanwhile, our silver market analysis for Equities.com in, "Silver Still has Further to Decline," was quickly profitable. This morning's losses have added to the market's $.40+ loss for the week.
The bean meal trade we published in TraderPlanet.com this week has been a bit of a non event and stalled out after Monday's gains. We bought the market around $310 per ton in the July futures in, "Bean Meal Bulls Gaining Control" and would be comfortable raising the protective stop loss order to Wednesday's low at $311.2. We'll call it a scratch. At this point, it appears the momentum has stalled and given its tight consolidation, we'll only allow the market room to move in our direction.
Our last trade update from last week's big idea is the spread between the Euro currency and the U.S. Dollar. We noted the record positions established by the commercial traders in both the Dollar Index and the Euro currency. This has been predictive of this week's turning point as the Euro has now traded above the 1.09 level and the Dollar Index has fallen more than 140 points ($1,400) since we published, "Record Position Narrows EUR/USD."
Finally, our focus for Equities.com this week was on the lean hog futures market. They published this trade on Tuesday and our entry orders were just filled yesterday. It's a little early to tell how successful this trade will be but, it is headed in our anticipated direction - higher. You can read the details in, "Hog Futures Building a Bottom." We also created a sample portfolio of our purely mechanical Commitment of Traders Program based on both the long and short side of the trade as dictated by the long and short hedgers, accordingly. Commercial Hogs Long + Short equity curve.
