Range Trading today as we begin the Holiday Markets

  • Posted on: November 30, 2009

Today looked like a typical December trading day. Business in the morning, a lull in the afternoon, then a flurry in the last half hour of trading. At this time of year, a lot of money managers and traders are closing out their books. The next month of trading through New Years, typically, we have that pattern.
People are either not trading any more, or trading in the morning and then heading off to parties of early lunches. Typically after about 2 PM New York Time, the only people still trading are those who are losers on the day, or just have nothing better to do.
It makes for choppier than usual markets, although I don’t really see how that could be possible. In any event, just know if you are trading at this time of year, the only other players are pros. That makes for some interesting moves, as well as very technical trading, rather than focusing in on almost non-exist ant fundamental news.
Barring something unforeseen, ie Bank of Dubai Surprise… or some other surprise revelation, these markets will most likely be 1) typically bid and 2) skittish beyond belief.

In the grains today, if you read my morning post, you can see that I thought at that time when we were bouncing around 1055 in SF, that there was a good chance we would go after last night’s trading high at 1066. In fact we took a look at the 1070 level for a moment, with a high at 1069 1/4.. moving through the old chart high at 1068. When there was no follow through, we had a tasty 13 cent break, and ended settling down 3 cents at 1057.
We had less volatility in December Corn, however, we did poke above the 400 level, posted a high at 405 1/4 and then settled down 2 cents at 400 3/4. In the wheat, we had choppy trade as well, with a high at 568 1/2 and a settlement down 5 cents at at 562 1/2.

While we had some afternoon strength, and it looked like we might get a technical pop in the Jan beans, when there was no follow through, the black box trading systems signaled “emergency exit” and we had that smack lower in the last 5 minutes of trade.

This is what you have to watch out for in Holiday Markets.. Markets move up to test key chart points, and if there is no follow through, traders run for the exits like there are 2500 dollar flat screens being offered for 50 bucks in the parking lot. They can’t get out fast enough…

Finally a recap of the crude, gold and stock indexes is as follows:

Crude oil had a 3 dollar trading range today, bounded between 75 and 78.. we ended at 77.26 up 1.20… Good thing I filled up my car yesterday, because I’m sure my local gas station purveyor will rush out to raise his prices from 255 to 270/gallon…
Gold settled up 6 dollars at 1180.1, posting a trading session high at 1183.70 Silver followed gold’s lead up 158 pips at 1846. Those targets of 19 in the silver and 1200.00 in the gold remain viable targets.

Thursday night’s meltdown most likely squeezed out the weak longs and now the players that are left are in for the long haul, or sitting on so much edge they are not worried about a ten or twenty dollar fluctuation in gold.

The stock indexes had some movement late in the day, but remain range bound, with SPZ hemmed in by the 1098 level as resistance, and supported down at the 1084 level.
DJZ tried to make a move towards the 10367 level this afternoon, but stalled around 10355 and then ended the day at the 10345 level.

Watch out for these Holiday trading ranges and the Holiday liquidity issues.

Well, that’s about it for the day.
A quick note. Thank you all for your emails and comments. Feel free to email me directly at christianrobinson1@gmail.com with any specific question you may have.
I look forward to hearing from you.

Good Trading