Fast Break for Traders: The Week Ahead

Week of November 17, 2008

> Forward to a friend
> Read past newsletters
> Visit www.futuresource.com

5 Hot Picks by Erik Voit of Alaron Trading

Alaron Erik Voit has lived at the forefront of technology since writing his first applications on his Deskpro 386 in the late 80's. Though he has formal training as a network engineer he attributes much of his skill set to his time spent as a technical analyst with the Bank of New York. After leaving BNY, Erik became involved with a proprietary derivatives trading firm in Chicago's financial district. Erik is currently the Senior Trading Technology Advisor for Alaron Trading in Chicago. He provides regular webinars, workshops and consultation on all trading and technology matters; from the most basic to the most advanced.

Webinar -- Using a trading system...Is it right for you?
Everything you wanted to know about trading systems; from finding one to building your own!

Crude Oil (CLF9)

With the last round of OPEC cuts failing to bring supply in line with weak demand figures as evidenced by the latest EIA inventory report showing total products supplied down 6.6% from a year ago. With the Euro zone and Japan now officially in recession we should expect to see the downward trend in the energy complex continue. With our eyes towards the Dollar index and the equities we will continue to short crude on any rallies in the January contract. I'm also looking for a slight rally Monday ahead of expiration.

Emini S&P (ESZ8)

Lately I have had friends and clients asking me what I think about potential value buys on recently beleaguered large cap. and mega cap. stocks. My response has generally been that I don't think it is a bad idea. But that returns should not be expected immediately. I feel this sentiment is echoed by investors around the world dipping their toe into the equities and trying to feel out a potential bottom.

The dynamic of the trade in the mini S&P has been one of tremendous price support on the dips down and rallies like a runaway locomotive on the rebounds. This week we will be looking to sell 900 and buy any significant drops below 850 until the market tells us we are out of this choppy range bound trade.

Treasury Bonds (ZBZ8)

Given the continued slate of bearish news and the equity markets failure to respond we will look to take a short position with a tight stop on any moves above the 119'00 level.

Gold (GCZ8)

Again here we have been trading in a range but with the continued deleveraging as commodities prices drop across the board my bias is towards the downside in this market. Without a major move in the dollar or from the equities I would expect to see further downside action in the gold with an eventual breakdown of the 720.00 support levels.

Copper (HGZ8)

We are looking to short copper for an eventual breakdown of the 150 support level in the face of continued waning global demand.

5 Hot Picks by Lee Gaus of EFG Group

Lee Gaus has thirty years of experience in the commodities industry. In 1992, Lee established EFG Group along with his two partners who are long-time friends. Since then, Lee has traveled the U.S. conducting seminars and trading meetings for retail traders and commodity offices.

Corn, watch it grow.
Learn more with our COMPLIMENTARY Corn Report. Sign up now!

Pick Your Poison, Know Your Risk, Use Stops

My long-term and short-term commodity models remain very negative but in my view these current trends have much more to do with the related recent-past break in the world equity markets than the independent fundamentals of the individual commodities. If there is another major meltdown in the world equity markets, I believe the commodity markets will follow. Failing this major meltdown in the world equity markets, I believe most commodities will continue to remain in a period of sideways consolidation. If our prediction is accurate the sideways trend may provide positive trading opportunities.

Corn

Buy Dec Corn at $3.70 consider a stop loss on a close below $3.57.

Soybeans

Buy Jan Soybeans at $8.80 consider a stop loss on a close below $8.72.

Gold

Sell Dec Gold at $765 consider a stop loss on a close above $780.

Coffee

Sell Dec Coffee at $114.50 consider a stop loss on a close above $118.50

Wheat/Corn Spread

For all you spread traders out there, Buy Dec Wheat/Sell Dec Corn @ $1.55 over consider a stop loss on a close below $1.40.

a FutureSource newsletter

Disclaimer: The Commodity Futures Trading Commission has asked us to also advise you that trading futures is not without risk. While there is opportunity for incredible wealth building, there is also the risk of losing even more than you invested. Of course, that's not unlike most other businesses. But informed traders are the best traders! Opinions expressed by Fast Break authors are not those of FutureSource.