Weekly Market Summary For Week Ending 6-2-06
BY Al Martin
Individual trades for Week of May 30 - June 2, 2006
In Tuesday’s trade, we SS-4 LBN 310 C 306.50 (carryforward), L-4 WN 4.1375 S 4.1775 (carryforward), SS-2 DXM 84.66 C 84.26, SS-2 CLN 72.25 C 72.00, SS-2 CCN 1475 C 1465, L-4 WN 4.1825 S 4.2125, SS CLN 72.60 C 72.30, SS-4 WN 4.2250, SS-4 LBN 308 (both carryforward).
In Wednesday’s trade, we SS-4 LBN 308 C 304.50 (carryforward closed), SS-4 WN 4.2250 C 4.1250 (carryforward closed), SS-2 CTN 51.50 C 51.30, SS-4 WN 4.1050 C 4.07, L-5 OJN 1.5370 S 1.5405, SS-4 WN 4.01, SS-1 CLN 71.50 (both carryforward).
In Thursday’s trade, we SS-4 WN 4.01 C 3.9425, SS CLN 71.50 C 71.20, SS CLN 71.15 C 70.45, SS-2 CCN 1500 C 1490, SS-2 CLN 70.65 C 70.35, SS-4 LBN 308.30 C 306.80, L-5 OJN 1.4920 S 1.4955, L-4 LBN 303 S 305, SS-4 CLN 71.40 C 71.15, SS KCN 99.30 C 98.60, L-4 WN 3.9225 (carryforward).
In Friday’s trade, we went L-4 WN 3.9225 S 3.9475, L-4 WN 3.9450 S 3.97, SS-2 USU 107.08 C 107.00, L-2 SBN 15.24 S 15.34, SS-2 CLN 71.30 C 71.15, SS-2 USU 107.10 C 107.06, SS-4 USU 107.16 C 107.14, SS-2 CLN 71.50 C 71.30, L-5 OJN 1.4930 S 1.4990, SS-4 LBN 304.80 C 303.30, SS-2 CLN 71.80 C 71.65, SS-2 CLN 72.10 C 71.90, L-4 USU 107.18 S 107.20, SS-4 LBN 303, L-4 WN 401, SS CLN 72.70, SS CTN 53.00 (all carried forward).
On the week, we traded a total of 35 positions, comprising 103 lots, generating aggregate gross profit of 17,575, median margin commitment $18,840, median time of trade 3.38 hrs., gross profit/loss CF: $2,350.
SPX: Tasty 2-way scalping action throughout the week, as the surprise Tuesday selling-off created long-side trading opportunities as the 1255 area held, with Friday’s May employment report strengthening the hand of the so-called ‘pause faction’ on the FOMC, allowing for an upside breach of the 1284/86 resistance zone, to settle out the week at 1288.22, with our next shorting target being a stall at the 1292/3 next upside resistance zone, with a likely pullback from Friday’s bond market rally & a pullback from Friday’s oil rally providing likely upside impetus in tomorrow’s equity trade. As for the coming week’s ECR’s, keep an eye on Monday’s ISM (service) data & Friday’s balance of trade data.
USM: Superb 2-way scalping action Tuesday-Thursday, with Friday’s data-inspired rally allowing for reaction shorting at 107.04, covering back at 106.28, followed by a long-side scalp at 107.14, selling at 107.20. We believe Friday’s close at 107.19 has left the contract near-term overbought, and we like scalping from the short side, looking for a retest of the 107.00 area in the coming week’s trade.
DXM: Once again, superb shorting opportunities in the 85.10-30 upside resistance zone, allowing for a 100-point short-scalp by Friday’s close.
Continue to scalp the contract from the short side on rallies back to 84.50 or better.
SIN: Good shorting action continued for the second consecutive week, shorting in the 12.10 area, and covering on 20-cent dips. However, the contract has put in good consolidation trade in the 11.80-12.10 zone, and, if the zone continues to hold, we would now be looking to scalp from the long side on pullbacks into the 11.90-12.00 area.
HGN: Continued frenzied fund-driven trade action, as the contract continued to strengthen, relative to the metals complex, throughout the week, with selling consistently drying out below 3.50. If the 3.47 area continues to hold on pullbacks, look to scalp the contract on the long side for 5-to-10-cent rallies.
WN: Superb shorting action, as the contract failed at the 4.27 high, generating a fresh shorting signal as it fell back below 4.2150, making 5-to-10-cent short-scalps like shooting fish in a barrel, with Friday’s late upside reversal coming on the back of renewed heat stress in the eastern grain belt. Look to scalp the contract from the long side on pullbacks to 4.00 or less.
CTN: Superb long-side scalping opportunities abounded, as the contract rallied throughout the week, touching 53.00 in late-Friday trade, on the back of fresh deterioration in the Nicaraguan crop, and a pickup in Chinese import interest, causing the contract to rally.
However, we believe the 4-cent, 8-session rally has left the contract near-term overbought, and we like scalping the contract from the short side at current levels, up to 53.50, looking for a retest of the 51.60 area.
LBN: Superb shorting opportunities continued for the third consecutive week, as the 303.50 & 298.50 technical support levels were both breached. Look to scalp the contract from the short side on failed rallies back to the 303/304 area.
SBN: Superb shorting opportunities abounded for the fourth consecutive week, as the contract fell below 15.00, on an intra-day basis, for the first time since February. For now, look to short failed rallies back to 15.50.
KCN: Good long-side scalping opportunities were created when the contract held the 95.70 support level in early-week trade. However, we continue to believe this contract will work lower, near-term, and we like shorting failed rallies back to 1.03.
CCN: Superb shorting opportunities, as the contract first failed at the 1498-1506 resistance zone, with a secondary failure at the 1575 resistance zone, in Friday’s rally effort. With the outbreak of spotted-yellow blight in the Ghanaian growing belt now receding, we like shorting the contract on failed rallies to 1475, with our first down-side target pegged at 1450.
OJN: Good long-side scalping opportunities continued as volume consistently dried out below 1.50, and we continue to like scalping the contract from the long side on pullbacks to 1.50 or less, as long as the 1.4740 level continues to hold on a closing basis.
CLN: Consistent 25-to-50-cent short scalps abounded throughout the week, with Friday’s 72.75 after-market close causing the contract to become overextended. We would look for a continuation of the rally into the 73.00-73.50 zone, for fresh shorting opportunities.
As always, we welcome subscriber e-mails with your trading questions at email@example.com