Trading Journal – 5th September

DXU18 – I bought one unit on Tuesday morning at 95.15 and it seemed positive but there was a relatively long upper tail compared to the body of the candle. I’m at a conundrum at this point about whether or not to take my profit or wait and see where it goes. If I’m just looking out Tuesday’s candle in isolation that I would say take my profit. The sequence of the last five trading sessions would suggest that I could expect the price to go higher. Looking back at the historical candle shapes when there’s been a longer upper tail then the size of the body the price has not gone on much higher. The price also rallied up to the midpoint of the bullish candle on large volume from the 10th of August and then failed. I’ve held on for now although I have move my stop up to 95.30. The market is currently trading around 95.45. I get the sense it might be going higher but I could be wrong so either way I’ll stop out with a small loss or ideally it will continue higher towards 96 and I’ll think about taking profit there.

GCZ18 – Gold is definitely looking pretty weak and there was a huge amount of volume that went through in the Tuesday session. Over 400,000 contracts that traded. And all we saw was a modest drop in a relatively constrained range. I think if there was that many people buying, and they could not push the price higher then i’m starting to feel pretty confident we’ll see the price skid lower from here. If I go short gold then I’m basically doubling my position long the US dollar. I still don’t understand why the market is not using gold to hedge contagion, so it’s probably better I just stick to being long the US dollar index.

KCZ18 – A very interesting session on coffee yesterday with the price dipping below 100 again and then Rising up to the open after such a long bearish run and at such an important level this actually looks like quite a bullish development in some ways to me. Do I take a position now? I’m a bit unsure as to where to place my stop. I don’t want to place it below the low from Tuesday’s session because that seems a poor risk reward I suppose what I would like to do is wait for another session which has a small range near today’s close and if the price is held above the low from the additional session then that would be a good place to put a stop and test positive momentum.

ZWZ18 – I think what’s confusing for me at the moment with wheat is that there are different themes operating in different time frames. So going back to the 11th of July we’ve seen a rally up to the 7th of August where the price went from 490 all the way up to 620. Since then we’ve seen the price drop back to the 200 day moving average and be relatively well-supported 1, 2, 3, 4 sessions now, where I am counting the days it has traded down to the average and held they’re or closed back above it. So in that context I would say it is looking good and has just come back to confirm a bullish break. However I have to contrast that with all the chop we have seen either side of the 200 day moving average. The price has traded well below the 61.8% retracement level of the aforementioned range. Tuesday’s price action was bullish in my opinion even though it closed below the open – I think the dominating feature of that candle is the long lower tail. However the shorter term trend since that high on the 7th of August has been a sequence of lower highs and lower lows. So perhaps what I’m really asking is where does that sequence end? It has broken the retracement rule. It seems to be finding some support from the 200 day moving average this time however the previous examples are poor. All of this points to confusion so the best thing to do is fold.

CCZ18 – Despite my worst fears on seeing the negative candle posted on the 30th of August cocoa seems to have held on and now be making a bullish break. I’m going to take a little bit of risk and go long at market which is 2318 with a stop just below today’s low which is 2295. I think what has convinced me that we might get a positive outcome is that we had a period of sideways consolidation throughout early August and now after an attempted initial rally through the 200 day moving average the sell off following that failure was relatively shallow. The price seems to be holding up well.

SBV18 – I cannot really say the rally in sugar is anything impressive since it dipped below 10. To me this looks more like an opportunity to get short than anything else. It as frequently sold off from these levels and it looks like I’ve got an opportunity to put a stop just on the other side of the 40 day moving average. There’s also the possibility that the US dollar will strengthen from here which would again be another headwind for sugar. The market is trading 10.60 and I’ll be looking to put a stop at 10.71.

HGU18 – Bad operating on copper even though I said I was going to take the short trade I just never got it done on the market is now lower trading it 2.58. Good to feel I was right but bad to miss out on the cash. Move on to the next opportunity.

ZSX18 – Soybeans do not fill me with great confidence at the moment even though they have held around the lows at 826. The rally so far has been relatively weak. We only really had one impulsive day of action before another couple of days of indecision and I suspect we will probably head lower again.

ZMZ18 – Similar to soybeans I would like to see soybean meal head a bit higher before getting short again as the technical picture is just a bit more complete for a short position in soybean meal from around the 320 mark.

ZOZ18 – It looks like a weak rally of oats is to be sold. The action has certainly been chaotic in the last 6 or 7 trading sessions. And if it does sell off it will be interesting to see how it responds to any buying around 233 which was where we saw a long period of sideways consolidation throughout June and July.

RSX18 – I do like nice round numbers but I don’t know if that’s what canola is responding to in the last three sessions where a few times it tried to push through the big figure but finished the session below this key level. I figure it will probably have another go at 500 but if not then you would expect it to head down towards 490 pretty quickly.

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