Trading Journal – 15th August

DXU18 – US dollar index has continued to push on and I added to my position around again 96.66  giving me an average price overall of 95.59 on 4 contracts. The fears of a Contagion in Turkey spreading are also generally feeding into the sense that maybe we’ve come a bit far and it’s time for a correction. I think in the back of peoples minds it’s also a little bit related to the incredible values and supercheap money that has been around for so long, people are starting to realise the party is over.
GCZ18 – Another week session from gold which is basically just trading the inverse of the US dollar at the moment. I wonder if at some point a traditional relationship will be restored where a flight to quality includes are early in gold but for now it seems to be a bizarre circumstance where people are selling gold as a commodity which is priced in US dollars and therefore should go down. Taking a step back to look at a 5 year chart the price is currently approaching the lows made in December 2016. Those levels back adjusted range between USD 1170 and USD 1178. In the interim the price has also how to make a higher which surpassed those levels several times pushing towards 1400 and failing every time after it’s previous peak in July and August in 2016. The previous low in price recorded before that in a 5 year timeframe was the late 2015 low just above the 1100 US dollar level. I’m not particularly inspired at the moment by the fact that the price was only able to record a sequence of lower Highs than the previous peak in July 2016 and the relative ease with which the prices sold off since definitely does not fill me with confidence so I’m home to avoid any position on this one for now.
KCU18 –  Coffee seems to be edging lower again and there definitely is some divergence between coffee and sugar even though the US dollar is more or less moving in the same Direction against both. I will need to move to the December contract I guess as the open interest in September coffee diminishes. If there are a lot of people closing out their contracts this could provide a decent rally in the September contract.
ZWU18 – September is looking decidedly weak and December is not much better. Although the price is still holding about the rough midpoint at 546 of the previously mentioned bullish candle from the 25th of July, which is a positive. So if we see another day of stabilisation around here I probably would be inclined to get long again. I am definitely building in a positive bias because I live in Australia and we are getting saturated with news about the drought. That is probably deceptive though because my information and bias is now skewed.
CCZ18 – There seems to be a very nice bottom forming in cocoa with the price more or less trading sideways for the past 6 sessions and I’m thinking at some point in the near term the price might like to move higher again. I would like to get long but have a stop below the recent low which is at 2096 so I would be risking almost 100 points to get this position on at a minimum. There’s also the first time in quite a while that the 200 day moving average has been penetrated. The average on the day that it was penetrated was 2331 and the price low was about 2099 on the 6th of August. Cocoa has actually moved closer to 10% through the 200 day moving average which historically should be a meaningful number, by which I mean I could expect continuation in the same Direction as the break which is in this case lower.
SBV18 – The price is making a small rally off the recent lows, the opening hours of trade on Wednesday seem to be relatively benign so far. Just have to wait and see, I am short two contracts and have a stop at 0.1070. I won’t be adding to my existing position.
HGU18 – Copper is really starting to look ugly with a break below the low from the most recent range and you would think from here that the price should be continuing much lower in sync with the US dollar moving higher as they are very similar trading patterns. Price is coming right down on the lows seen throughout 2017 and the last part of 2016 we’re the next stop after that 2.25. Just glad I didn’t go long for now and we’ll wait till I see something which feels like a good trade setup.
ZSX18 –  Soybeans are still holding in there and in fact holding their own quite well it would seem despite the significant sell off on the 10th of August. The price has rebounded relatively quickly without making a new low and now seems to be building towards perhaps another run at that 900 level. To be an automatic reaction to buy if i’m feeling that confident but part of the structure I’m looking at doesn’t say it’s a screaming by so I’m just going to sit and watch it again.
ZMZ18 – A couple of very turbulent sessions in soybean meal where it sold off strongly on the 10th of August and then was again bought at the support levels just above 324 and has gone straight back up to 340. To me that is very bullish sequence especially given the strength of the US dollar in the last couple of sessions. The price is already dropping away from 340 in today’s session and I can’t see a clear entry point that doesn’t require me to take quite a bit of a risk in terms of the width of the stop relative to any reward I could expect. I’m just going to watch on this one until it becomes clearer what to do.
ZOZ18 – I really like the price action in the last four or five days since making the peak on the 9th of August. I am going short at 267.5 with a stop at 270. Whilst it could be interpreted that the ability of the price to hold above the large bullish candle from the 6th of August I can only get the feeling that the rejection of the upper edge just looks desperate. Maybe it’s not desperate but something in the rush higher and then sharp sell off. I might be mis-reading it but i have to test my idea.

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