The Softs Review
For the week of April 11th, 2011
As usual, you are going to review the soft market under the analysis by Pitguru Jurgens H. Bauer to learn how the market works in the next few days. Note down the information and plan your trading!
It was a strong week for coffee prices which rallied 20 cents from a low of 254. That move, ahead of Friday's option expiration, set the wheels of bulls thinking of $3.00 again. Cotton prices also improved, while sugar and cocoa prices faded a bit. In fact, Sugar now looks capable of continuing lower technically, but as in the past when sugar looks to be preparing to make a break it sometimes doesn't, so caution is advised. Cocoa prices on the other hand will be more influenced by perceptions of how events politically in Ivory Coast will play out, as it is thought that supplies will become readily available.
The primary for the week ahead ought to bring focus upon the US dollar as it is on the lows and looking weaker. Should the dollar continue its trip south, one cannot help but be friendly towards dollar denominated commodities. Inflation is real, regardless of what statistics may be offered by the Fed. So direction among the soft markets this coming week will likely rest on where the dollar goes. Additionally, energy prices may be a factor, as well as fresh developments in the 24 hour news cycle that impact the macro economic picture.
For now, my bias is to play markets from the long side with the idea of taking profits. The government shutdown may have been averted, but next up in Washington, raising the debt ceiling...as living on credit has a dose of reality.
Hope you will have a great week! You can check out the chart at pitguru.com |
