Insights & Trading Tips for Position Traders
By Al Martin
(Nov 5, 2007) Insider Intelligence Trades from Sep. 29 - Oct. 2, 2007
In Monday’s trade, L-8 USZ 113.20 (ave) S 113.20, S-4 WZ 8.30 C 8.2750.
In Tuesday’s trade, we went L-4 USZ 113.16 S 114.20, L-4 USZ 113.18 S 113.22.
In Wednesday’s trade, we went L-4 USZ 113.02 S 113.06, L-4 USZ 113.18 S 113.06.
In Thursday’s trade, we went L-4 USZ 112.15 S 112.19.
In Friday’s trade, we went L-4 USZ 113.12 S 113.16, L-4 USZ 114.10 S 114.14, S-2 HGZ 3.32 (carry position) C 3.32.
For position traders, we continue to like to short the December cotton contract (CTZ) on rallies back to 65.00 or better, noting that cotton is one of the last fungible contracts which has not yet begun its journey back to its underlying supply/demand reality. However, we continue to feel that the Dec. cotton contract will go off the board under 50 cents.
Short term trading profits continue to increase at InsiderIntelligence.com
We would note in this week’s recommendations that in our last week’s piece we had reiterated our recommendation to short the coffee. Indeed, in our last week’s recommendation, you could have shorted the coffee, and we recommended doing so in the KCZ contract around 1.23. You saw, Friday, that the coffee came down to trade under 1.19 in the December contract. We recommended taking out a 5-cent profit on the week in the coffee contract, generating a gross return of $1,875 per contract shorted on our previous recommendation.
Furthermore, we continue, as we have for 4-6 weeks, to recommend trading the December copper, the HGZ contract, from the short side. We recommended fresh short positions being accumulated in the 3.45-3.50 area. Indeed, in Friday’s trade, we saw the December copper come down to touch a 3.3040 low, generating median returns of 15 cents on the week or $3750 per contract shorted on our previous week’s recommendation.
We continued to recommend trading the bonds from the long side on dips last week for the second consecutive week. You see this strategy bore fruit throughout the week. Indeed, we were able to issue multiple day-trading recommendations on our day-trading service, which resulted in more than 20 individual 4-point trades during the week on the long side, buying on dips. We recommend this strategy be continued, looking to buy now on dips back down to the 113.24 area, basis the USZ contracts.
In terms of next week, we had also suggested and have been recommending short sugar positions in the March sugar (SBH), suggesting that the sugar would come back under 10 cents. Indeed, we saw this action late-week with the March contract going out 9.94. And we continue to like shorting the March sugar contract on rallies back to 10.00 cents or better, as we believe that the sugar will finish out the year under 9.00 cents.
Also we like and had recommended, in our Thursday night commentary, that the January orange juice futures (OJF) be shorted at the 1.4250 level, which was reached Friday and exceeded, suggesting that the juice would fall back late Friday session.
Indeed, the juice fell back to close 2 cents lower at 1.3970, generating a tasty $350/contract sold short in a one-day trade.