This week, my day trading experience turns out to be a little bit harsh. As I planned, I shorted 2 contracts of volatile commodity cocoa in the hope to reap quick profits to increase my portfolio value. However, I find that it is hard to capture the market high. With the price action of cocoa remains rallied, and the market trend is strong buy from Barchart, I long 5 contracts of Mar 2016 to offset my losing position on Dec 2015 contracts. But I need keep a close eye on this position as the increasing supplies in Ivory Coast, Nigeria, and Cameroon during the harvests imply limited upside potential.
Soybean oil has small fluctuations past week and holding onto the contracts has proven to be a wise decision, as the price went up. Even though the price is still siting at a relatively low point compared to the recent one-month movement, closing the position seems to be a safe bet because the market bullish belief is minimum.
Sugar has been my saving grace as the prices are trading far above its 20 and 100 day moving average. The short-term bullish trend remains firm as reports of less production than demand continue. There is recent news that Malaysia and Indonesia will likely follow Philippines’ moves on restricting exports in order to preserve supplies for domestic market. Also, the drought in southwest of India is hurting the sugar production as well. While on the other side of the story, the demand is still strong, which is partly due to large buying of sugar from China. Thus, I decide to close my position firstly to lock profits gained now and reopen another larger size of long contract.