These past three days I have entitled each consecutive daily comments purposely with “Ready”, “Set”, and “Go!” Admittedly, I was feeling rather frisky and willing to go out on a limb in predicting that cocoa prices were setting up to go gunning for their contract highs. Today they did just that, but they couldn’t make new ones. Instead, there may be a serious double top in place on those highs.
Cocoa prices began by trading lower, opening early screen trading at 2750 in the May (K) contract. Then prices firmed slowly trying to get above 2785, which took a while but finally happened. When it did prices swiftly raced up the contract high of 2845 then stopped dead in their tracks.
What happen next was a change in direction that saw May revisit the morning lows, recover to trade back up to 2800, only to then break sharply lower and down to 2696. And Cocoa wasn’t alone by any means. Other markets responded in kind and this afternoon’s weakness seemed heavy enough to signal something deeper, like some major news, or a shifting in the force.
I’m flat, having sold some futures until able to flatten my option position. Then I covered the futures, but wish I’d bought more puts. As bullish as I have been, now I’m neutral and wondering if a bubble burst in the economy. If so, then commodity prices may experience some violent moves. Hey, I trade cotton options and that market is crazy this week. Now, maybe its cocoa’s turn.
Don’t sell options short, you could get killed. Leave such things up to the professionals. I think it appropriate to get long volatility here and while you may think it is expensive, it’s the thing to do in uncertain times.
I’m almost done shifting my longs out of May and into July.
Basis May, I see Support: 2560-2500, 2450-2400, 2350-2320-2283,
Resistance: 2800-2850
Si quiere más información, por favor contáctenos,
Maria Aranda
El equipo de Brokers de Futuros USA
Email: [email protected]
TEL: 312-261-7395
Fuente: MF Global
©2007 Jurgens Bauer & Associates all rights reserved.
Jurgens Bauer
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La operación de futuros y opciones involucra riesgos de pérdida sustanciales, por lo que no es conveniente para todos los inversionistas. La información y opiniones contenidas en esta publicación, no constituyen, ni deben ser interpretadas para constituir una oferta de venta o la solicitud de compra de algún producto. La información objetiva incluida en este reporte ha sido obtenida de fuentes consideradas como confiables, aunque no esta garantizada en cuanto a su exactitud, ni tampoco en lo que respecta a su completo significado. No se asume responsabilidad con relación a ninguna declaración, así como en lo concerniente a cualquier opinión expresada aquí incluida. La confiabilidad relativa a la información en este reporte es solamente bajo riesgo del lector. Todos los comentarios están basados en opiniones.
