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Realtraders & MSers,
For two months this spring, I promised myself everyday if sugar dipped
below 4 cents that I would buy two contracts. If it proceeded to dip below
3 cents, I would buy two additional contracts and was prepared to pick up a
couple more below 2 cents. On 4/28 I filled at 3.98 and 4.06 in July. The
following day affected a number of technical indicators. The candles
signaled a nice variation of a three day "morning star" pattern (with a
nice hammer in the middle). I monitor about eight momentum indicators and
even the slow moving (but, quite directional) Coppock Curve turned up. On
4/30, after staying up to midnight calling anyone who would listen, I
bought July contracts all during the session, filling between 4.36 and
4.52. I rolled to October contracts when volume started to exceed Julys'.
For the more agressive traders, I sold between 6.20 and 6.50 and bought
back in the 5.40 to 5.50 range. The majority of my folks want to ride this
one into the sunset. I guess when you get people all whipped up about
sunspots, La Nina and 50 and 70 cent sugar, it's hard to get them to cover
their long positons. Norman makes a great point: how much risk does one
have with 4 cent sugar? Also, use all the tools in the toolbox. Candles,
momentum oscillators, fib retracements, and common sense (and if throwin'
the bones helped, I'd be doin' it) go a long way to make this one of those
memorable position trades. I'm mostly a "holy grail" mechanical swing
trader and I'm seldom in a position for more than 5 days...but there are
times when the risk to reward calls for position trading: crude in
December, unleaded in February, sugar in April, ... wheat in August (is it
really going to two bucks)?
Steve Karnish
CCT
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