April 14th

No longer updating every Sunday; only when my opinion changes or targets are met.  And they were met today.  So, is that constructive with more upside or do we retrace.  I am still thinking the larger move off of 297 is still part of a correction that implies a new high eventually.  The new up move off of 255 is a correction of a correction ! Not exactly clear yet, however market has traded nicely in technical terms with today's high hitting near the 78 % retracement of 297/255. This second leg up, launched from a bull flag with base at 270, is projecting up to 299.  I also have some other point and figure targets at the same level.  So, I would continue to err on the long side with your first stop ard 281.60. Or more agressively, 279.50 /277.90.

60 Min - also, depending on how you draw this, you could make the last few months a bullish wedge pattern.  Seems the first leg down was a a 5 wave diagonal pattern which makes me think we test lower in the medium term.  Can we take out 300, test lower and then resume the trend? I think so.

Weekly - held nicely the trend line with volume increasing substantially. Bearish candles still in play.  Again, this looks like a third wave of the final 5th.

Point and figure - pointing to 299.

Open interest - fund future only position showed liquidation, however, quite a bit of options (yellow bars) recently, adding to long position.  (mkt has increased nearly 20 cents since report (tuesday mkt).

Week April 4th (brazil export update)

How big was the 2010/11 crop? Jan/March shipments as per Cecafe (unofficial).
* There was a larger than normal proportion of Conillon, but only slightly. However, could be indicative of blend changes.
* Record month after record month of shipments.  Even at 56 million, there is not going to be much left.

Week April 4th (Tuesday)

Despite the big day, seems obvious that, after a nearly a 42 cent fall, we would have a substantial correction.  I expected it last week, but we never got the buy signal (break abv 270); and even today, we still didn't break it vs K11. Still, today was a key reversal bullish engulfing pattern (opposite of what launched the fall from 297).

Not much to add this week.  Tomorrow should break 270 and that will provide the correction targets.

Expectation in medium term is that we still see a little more downside before the trend up resumes. Short term (this week next..??), maybe another test of 282.

Daily - bullish engulfing, but bouncing off 20 day MovAve. Slow stochastic oversold and nearly nearly offering buy signal.

60 Min - looks to be a completed 5 wave down (beginning diagonal ?).  So, would imply more downside after the correction up.

Week March 28th - Double bottom or H&S?

Let's start where Wednesday's update left off and look at a few possibilities. Thursday's morning break of the 268.20 led to a near vertical fall to test 260 and then retraced the whole move in a similar fashion.  Obviously 260 is now very significant and the move off suggesting a test of the new range highs (280/285).  Will it? I do not believe that the move from 297 to 260 was the full correction.  I still find open interest a little bearish but becoming less so with the fund longs getting less and less net short. Still, few new shorts and thus no conviction to the downside.  If the mkt breaks 270 tomorrow, I would be looking for another attempt up.

Conclusion: still looking for more downside, but expect this bounce to develop a little more. 276.60 or 281.20/285.


60 Min - if the assumption is that the move from 290 to 260 was impulsive, then thus correction looks text book ABC (3-3-5) correction.  This would target between 281.20 and ard 285. If ends up being a running flat, then it would not make it past 276.60.  Either way, better to be flat and looking for what then next move is.

Daily - shows nicely the bearish signals (engulfing pattern) with fall to 260 and now the bullish hammer off the test of 260.  However, we did test the 10 day MovAve on Friday and came off. Basically, if we can't take 281.20, we are going lower than 250.

Point and Figure - break of 45 degree line would open up the possibility of hitting 283 target and consistent with the Elliot ABC count discussed above.

Commercial Net (open interest) - surprisingly, still lots of selling to do. If market does fall, expect to see this go back to 2008 net position and set up another bull run.

Supply and Demand - my own Supply and Demand showing a deficit for 2011/2012.

Euro - still held back by trend line and retracement at 143.

Week March 21st (Wednesday upate)

Looks like you could add to a short with a break below 268.20 and lower the stop to 275.40.  A break above 275.40 would target 290 and might make a new short term long interesting.  Still, pattern is bearish.

60 Minute - never call a H&S before it happens...but it is tempting.

Point and Figure - triple bottom sell set up. Targets 250. None of the upside targets were met = bearish.

Week March 21st (Monday update): Bull resumed?

So far the rally off 260 has hit what could we be considered good "bounce" targets (281.20 was previous support and a 1.38 multiple of first bounce).  So, is it a bounce, or a bull resumed?  Last week I thought we would try for 280; mission accomplished, Sr Arbusto. Therefore, I'd be a seller with a stop at today's high and would have sold 280 gladly. Again, trading against trend, but tight stop with good downside potential. Open interest mixed but more supportive of bear argument, than bull. Still, any move to the downside should be viewed as corrective and eventually we will see a new high.

We will probably have a lot of people talking about the new head and shoulders pattern forming, again (remember all the talk at 200).  There is the potential, but far from any sell signal as of yet.

In conclusion:  we got where I thought we would and I think we could see further downside.  All bets off/postponed with a close above 282.

Weekly - bearish shooting star in effect and slow stochastic offering sell signal.

Fund - substantial long liquidation with little increase in shorts.  So, no short cover and ammo to sell and those that didn't get out probably thinking twice about it now and likely to take advantage of this bounce.

Indicator turning up but not yet accelerating.  Still, it is bearish.

60 minute - rally looks corrective on little volume.  Possible H&S pattern forming.

Euro (weekly) - at critical point.  needs to be held back by 143 level. A break of that changes the scenario substantially = bullish/ supportive of commodities.

Week March 14th - Targets reached

Targets reached...and then some, but the 292 + target met all criteria for an intermediate top and has since plummeted.   What would be some good targets on the down side?
If this was the end of the 3rd wave, then a 38 % retracement would be 215.35 and a 50 % would be 195.05.  Seems substantial, but in %, its only a 27 %.   What is the likelihood that we get there?  100 % of some period !! , but in the next 3 months or so, I'd say there is a 50 % chance and increasing by the day.  Is it a sell now?  I'd be looking to the intraday charts to guide that.  Intraday, this has the look of a 5 wave move down.  So in the short-term, we should see some retracement. I would have liked to see this try for 257 first, but if it doesn't, then I could see it try at 280 again.
Once the panic settles, there is still the massive bull trend.
Bull arguments:
1) Bull trend is still intact.
2) Fundamental picture hasn't changed.  Brazil exports hint at little carry over.
3) Fund position is not over extended by any strech and much less so now.

Bear arguments:
1) Hit the upper channel line on 10 year weekly chart.
2) Hit the 292 + target
3) Daily key reversal
4) Weekly bearish shooting star with follow through this week.
5) SP500 looks like it topped earlier and commodities followed shortly.
6) Risk aversion
7) Slow Stochastic now hooking and suggesting sell signal for this weeks close.
...etc.

Bear arguments dominate for time being.

Weekly - nice bounce off upper channel line and very bearish shooting star candle with follow through.

Point and Figure - Broke through all support.

OI Indicators - indicator needs to accelerate, but it is pointing to more downside.