Wednesday, November 14, 2012

Commitment of Traders Shows Sugar Short Trap

Commitment of Traders Report Springs Bear Trap on Sugar Futures Speculators

November 13, 2012

This trade setup is merely a random sample of the day’s trades generated by COT Signals. To track our work their and receive all of our nightly trading recommendations, click here.

This morning’s trade in the sugar futures market takes a look at the peculiarity of, “roll over.” When futures markets expire traders must determine whether they are going to make delivery of the commodity, take delivery of the commodity or, the vast majority of the time, offset the position and move into the next available expiration. This meant offsetting October positions and creating a new position for March delivery.
Short covering in the October contract forced the market back towards 21.50. New selling was unable to push the market below the October contract low of 18.81. Commercial momentum has turned positive and we view this as a short trap for the speculators. We have bought March sugar futures and placed a protective sell stop at 18.86.

This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation by Commodity & Derivative Adv. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

No comments:

Post a Comment