Chuck LeBeau and Friends Blog

PitGuru exists to bring the latest Futures News to the trading public on all major futures markets. Review commodities market on march 28th can be useful for your trading strategies.

The billions report on March 16th - Last week’s earthquake in Japan has quickly escalated into a major disaster, with the ensuing tsunami and nuclear reactor meltdowns. The earthquake was the worst in the country’s recorded history, and the costs will no doubt be high in terms of victims as well as damage to key industries and the Japanese economy.

To say that today’s trade was slow is an understatement of massive proportions. It was so slow; it is hard to imagine how it could get any worse.  People have a natural tendency to wonder why this happens and the only reason for today must have been the impending AAPL and IBM earning announcements.  Both were very good.

AAPL earnings were better than expected.  Can it already be priced in or is it going to $400/share?

• Q1 revenue USD 26.74bln vs. Exp. USD 24.42bln
• Q1 Macs sold 4.13mln, up 23%
• Q1 iPhone sold 16.24mln, up 86%
• Q1 gross margin 38.5% vs. Exp. 37.3%
• Q1 iPods sold 19.45mln, down 7%
• Q1 iPads sold 7.33mln
• Sees Q1 revenue about USD 22bln vs. Exp. 20.87bln, sees Earnings at $4.90 on expectations of $4.47

IBM…

• Q4 revenue USD 29.02bln vs. Exp. USD 28.28bln
• Q4 gross profit USD 14.2bln
• Q4 net USD 5.26bln vs. Exp. USD 5.14bln
• Q4 software revenue USD 7.04bln
• Q4 global technology services revenue USD 10.2bln
• Q4 systems and technology revenue USD 6.28bln
• Q4 gross margin 49.0% vs. Exp. 48.8%
• Q4 global business services revenue USD 4.76bln
• Q4 signed services USD 22.1bln, up 18%

The ES is almost at my target “level” of 1,300.00 to 1313.75.  One wonders if Globex traders will take the baton and run with it into that range.  If so, what’s next?  Oh, never mind.  There are POMO operations every day but 2 this month so it’s up, up & away!

Trade well and follow the trend, not the so-called “experts.”

Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banksters.

Larry Levin
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I saw where the Ex-Tunisia President's wife left with 1.5 Tons of gold. That is symbolic. Until recently tyrants and government thugs ran away with suitcases stuffed with hundred dollars bills. Today they prefer gold. When this happens, what does it tell you about the dollar?  

In yesterday's markets the value of SBH moved between 30.52 and 3155, before settling in at 31.12, (plus 23 for the session), as February options expired. This sets a neutral to positive tone, yet doesn't leave another visit to 30 cents out of the question. Efforts to build support can be rewarded, but only if values can close back over 31.80-32.00. I still favor the long side fundamentally, and continue to hold long 33.5/36.5 call spreads, but am considering covering the short leg. Let's see how the technical picture develops.

In coffee, KCH was up 300 points early, but those gains eroded and left KCH to settle at 235.35 plus 75 on the day. Coffee prices seem heavy and while volatility came in a notch again today, look for further testing on the downside to be likely. I want to approach the market from the long side, but feel there is no urgency. For now will wait to see if 230-228 continues to offer support. Only if KCH manages to move above 240 will highs be challenged.

CCH had a healthy range from 2995 to 3067. Unfortunately, even with settlement at 3036, (plus 19 on the session), prices slipped down in late dealings after settlement, so my longs took on a less desirable look. It will be important for CCH to move back over 3040. The upside will take on renewed strength once CCH above 3140.

Cotton futures reached limit and stayed there for much of the session. However, volume was light. Looking for a move to test the highs to pick up volume. Prices up over 4 cents this morning with a 5 cent limit today.

Volume increased on commodities on NYSE-LIFE http://www.bloomberg.com/news/2011-01-17/nyse-liffe-commodity-volumes-jumped-to-record-in-2010-update1-.html
Based upon feedback from market participants, the Exchange is delaying implementation of the new Cascading Stop Mitigation functionality for Sugar No. 11®, Coffee "C" ®, Cotton No. 2®, Cocoa, FCOJ, Sugar No. 16, CCI Index and RJ-CRB Index contracts.

The Exchange is also delaying implementation of previously announced changes to the terms of Electronic Market Orders for the same set of products. Implementation of these changes for these contracts was originally scheduled for trade date January 25, 2011.  The original Exchange Notices detailing the changes can be found at: 
https://www.theice.com/publicdocs/futures_us/exchange_notices/ExNot122310CacsadingStops.pdf
https://www.theice.com/publicdocs/futures_us/exchange_notices/ExNot121410MOWP.pdf

- Jurgens H. Bauer, Softs Guru

I was contacted by a trader who wanted to let me know how much he was enjoying the DVD sets and was looking for advice on the current stock market. Here is my response which I thought might also be helpful to TraderClub members: Advice as of Sept. 17, 2010

1. The stock market appears to be going sideways so we want to be applying strategies that buy on dips and sell on rallies. But we will need to know when the sideways period is over and the market is trending so we can change strategies. How will we know that? (For one thing our sideways strategies will have stopped working.) Perhaps looking at long-term moving averages on the major indexes will help (major stock indexes must be above 120 day MA and 120 MA must be sloping up for example). We might also look at the ADX on weekly and monthly charts. If the ADX is rising by a significant amount then we are no longer in a sideways market.
2. We need to have our strategies in mind for the current sideways direction of the market. Sideways strategies that seem to work: RSI levels, ATR bands, Bollinger Bands, support/resistance levels, probably several others.
3. We need to have a screening process to a) identify good trading vehicles and b) identify setups among the trading vehicles we follow.
4. The "High Beta" strategy in the DVD workbook works best in a market environment where the trends are up.

Not sure that it would be a good strategy right now. A bit of general advice re your comment that "the challenge is looking for early set-ups ". Early is not as important as reliable. Trying to be early gets most traders into trouble and causes losing trades. Better to be a bit late and have a higher percentage of winners. That's difficult advice to follow because it is our natural tendency to always want to be early. Work on being a good observer of what is actually happening and try not to be a predictor of what might happen. Its always better to be late and "right" than to be early and "wrong".