A week in Review

The goal for this week was to just not lose any more money but instead just to finish with a strong positive move.  Overall I made some small gains for the week, this week with my current position I made an additional 5000.  This was great it brought me closer to net zero but unfortunately I finish in the black for the trading game.

The good news it my lowest point in the game was  Nov 8^th and since then it has been nothing but gains +14500 in the past 10 days.

The week started off with a drop off last weeks close rally Tuesday and Wednesday for wheat and corn, then I made my gains as the market dropped Thursday and Friday.

Soybean which I hold currently no position is followed the same pattern as the other commodities this week.

Overall I found it difficult to recover from my losses from the first 4 weeks when there was such a dramatic series of price drops in mid October. The lack of movement made it difficult to make sizable gains and continuously move towards any direction on more of a weekly strategy.

Generally  I enjoyed the game, I wish it could extend long now that I have a better understand of the market and the movements these 3 commodities will make.

The Great Offset

Friday November  11^th – Ready for the comeback! Monday I watched the open and closes for the commodities,  Everything open slightly lower then last weeks closes with the exception of Wheat but it was still tight. I planned to get rid of all my short contracts I bid long to offset was successful in only soybeans and wheat, my price was 650 a bit to aggressive and therefore was not accepted. I am still looking at a weekly long position instead of day trades so I had hoped to place bids slightly higher then my current offset prices later for Friday.  Finally I made some gains back on my losses my offset this week pushed me up 5000.  Since these past 3 weeks have been so uneventful it has been difficult to apply technical indicators or anything other then new sources for your trading strategy.  The grains market has been uninteresting with higher volumes trading but the prices really close only trading between ¾ -1%.

http://www.bloomberg.com/news/2011-11-07/soy-corn-may-open-lower-on-europe-debt-crisis-wheat-may-rise.html

This article is what I reviewed on Monday – and its predictions were pretty accurate with the over turnout of the week.  When I compared this to the technical indicators reviewed for the week :

–       Wheat – Bullish/Extremely

–       Soybeans – Bullish

–       Corn – Bearish ?

There is still some anticipation as to what is going to happen with the EU Debt crisis and with Berlusconi agreeing to step down it was strange not to see a more dramatic reaction in the prices. I think this is why is has been so difficult in the past few weeks, in a reactionary market big moves are what are used to adjust back and forth so in these past week with little movement there is also nothing to move against. This week I will stick with the conservative numbers close to 1% of the price until there are some definite indicators that the market is going to make a move!

Things that I am looking into over the weekend; what happens to the price of Soybeans as the November 2011 contract draws near its expiration.  Also Most US farmers are also done with the Soybean harvest so it will be interesting to see some final numbers and to look into what the storage cost and options are just to see what occurs to the Nov 2012 prices.

For wheat I am looking maybe to see if there will be a little shock to the price since poor weather is expected in Russia, Ukraine and domestically in the US as well.  I predict wheat prices rising and will definitely be in a long position for the week.

Corn – is unpredictable as the US debt crisis plays the wildcard with the quantity demanded decreasing being something speculators are forecasting.

The goal this week was to start the total overhaul, get out of short contacts and into long territory.  I thought the market had bottomed out and that there would be nothing but gains from here on out. Ha ha if only it was that easy. Then I read a convincing report from Bloomberg

http://www.bloomberg.com/news/2011-10-31/grains-soybean-futures-may-fall-as-dollar-s-rally-erodes-export-prospects.html

there was a prediction that Corn would open 6 to 8 cents lower…. (short…) the artcle further forcasts lower prices in all 3 commodities, wheat corn and soybeans. So this put my overhaul on hold.  I will attempt to with Wheat and Corn hold my short position and see if I can make some gains for the week.  Mondays prices 647 I figured 6-8 points down I placed a big of 640…. Tuesday surprise, up to 654. Loss!

On a side note the article has some specific times to watch, it is interesting to align these times to the daily trade prices.

11:00 U.S Export Inspections. – the reaction to price was decrease in 4 points from 10:30 to 11:00   – the USDA released 3 public reports on commodity exports.

1. daily press releases, lists sales or cancellations of large scales
2. weekly report of outstanding export sales during the current and next marketing year and level of export ship ent during the current year
3. weekly report of export inspections, which are the quantities loaded on carriers for export.[1]

Must have been a negative report to cause the drop in prices. This is just interesting to see what sort of effect certain reports have on prices.

The prices for the rest of the week bounced back and forward for corn and wheat. Soybeans instead had a minor drop on Monday and a steady recovery of its drop all week. I placed a 1180 bid November 1^st figuring that there would be a continuation in the downward trend but instead I saw a steady climb up for the rest of the week. (should be confident in moving long for next week)

I find it really difficult to use the technical indicators when the chart is so tight and there is not a lot of movement like we observed in September. October itself had remained pretty stagnant. I looked at what happened in the last 5 years for November to predict some trends for 2011.

2010 – Rising

2009 – Falling

2008 – Falling

2007 – Rising

2006 – Rising

great – nothing really consistent to move off of.

My prices this week were pretty close to the actual trading price it just was unfortunately in the wrong direct for contracts.

I am thinking this lackluster 2 past weeks of trading will result in some big moves next week. I am poised to move long. Moving 5 contracts in both wheat and soy and taking my current netted out position in Soybeans also into long territory .

Overall for the week, the NASDAQ, S&P and DOW Jones are all down this is also the case with Currency (Euro-USD). It will be interesting to see how the numbers look at todays close.