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MRCI's Online Update -- 04/01/2009 - SAMPLE

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*Please note: If you are a current MRCI Online subscriber, you can view current MRCI Online Updates here: http://www.mrci.com/client/update.php

To MRCI Online Subscribers: (04/01/2009)


MRCI Seasonal Action Report: to organize trade actions for the following week. This report is updated daily as a tool for monitoring trade actions.

Again, we would like to emphasize to our subscribers that trade exit dates are also historically optimized turning points and can be important points in time to be looking for market reversals.

Trade Exits:

  • Buying June09 Swiss Franc(CME) on Thu 4/9 close to liquidate short
  • Selling June09 Australian Dollar(CME) on Thu 4/9 close to liquidate long
  • Selling June09 DJIA Index(CBOT) on Thu 4/9 close to liquidate long

Trade Entries:

  • Buying June09 Australian Dollar(CME) on Fri 4/3 close to initiate long
    Trade has been profitable 13 of last 15 yrs - Average: $877
    (The A$ has typically been strong during much of the last Australian fiscal quarter, beginning with a surge into mid April; note the massive gap on weekly charts.)

     

  • Buying July09 Natural Gas(NYM) on Mon 4/6 close to initiate long
    Trade has been profitable 12 of last 15 yrs - Average: $1449
    (NORMALLY, distributors in hot-weather regions that depend on natural gas to generate electricity accumulate inventories before the beginning of air-conditioning season.)

     

  • Selling December09 Corn(CBOT) on Mon 4/6 close to initiate short
    Trade has been profitable 15 of last 15 yrs - Average: $319
    (As planting begins in April, new-crop comes under pressure as acreage is assured.)

     

  • Buying June09 Crude Oil(NYM) on Tue 4/7 close to initiate long
    Trade has been profitable 13 of last 15 yrs - Average: $1749
    (As the summer driving season approaches, refinery utilization rises and increases consumption of crude oil; but rising consumption must compete with the need to accumulate inventory, thereby accelerating demand.)

     

  • Buying June09 Gasoline(NYMEX) on Wed 4/8 close to initiate long
    Trade has been profitable 14 of last 15 yrs - Average: $2465
    (Rising consumption competing with inventory accumulation accelerates demand.)

     

  • Selling June09 Live Cattle(CME) on Thu 4/9 close to initiate short
    Trade has been profitable 12 of last 15 yrs - Average: $434
    (Comment next week.)


MRCI Spread Action Report: to organize trade actions for the following week. This report is updated daily as a tool for monitoring trade actions.

Again, we would like to emphasize to our subscribers that trade exit dates are also historically optimized turning points and can be important points in time to be looking for market reversals.

Spread Exits:

  • Selling Jul09 Lean Hogs(CME)/Buying Apr09 Lean Hogs(CME) on Thu 4/9 (#3136).
  • Selling Dec09 Cotton(ICE)/Buying May09 Cotton(ICE) on Thu 4/9 (#3143).
  • Selling Jul09 Wheat(CBOT)/Buying May09 Wheat(CBOT) on Thu 4/9 (#3149).
  • Selling Dec09 Cotton(ICE)/Buying May09 Cotton(ICE) on Fri 4/3 (#3152).
  • Selling Dec09 Wheat(CBOT)/Buying May09 Wheat(CBOT) on Fri 4/3 (#3159).
  • Selling Jun09 Australian Dollar(CME)/Buying Jun09 Swiss Franc(CME) on Thu 4/9 (#3169).

Spread Entries:

  • Buying May09 Feeder Cattle(CME)/Selling Jun09 Live Cattle(CME) on Mon 4/6 (#3174).
    Trade has been profitable 14 of last 15 yrs - Average: $1014
    (Cattle slaughter begins to surge in April; as it does so, feedlot operators will need to buy feeders to replenish numbers.)

     

  • Buying Jun09 Australian Dollar(CME)/Selling Jun09 Canadian Dollar(CME) on Mon 4/6 (#3175).
    Trade has been profitable 13 of last 15 yrs - Average: $495
    (A$ have usually surged into mid April as the final quarter of the Australian fiscal year begins; in contrast, April is the first month of the first quarter of the Canadian fiscal year.)

     

  • Buying May09 Wheat(KCBT)/Selling May09 Wheat(CBOT) on Mon 4/6 (#3176).
    Trade has been profitable 14 of last 15 yrs - Average: $356
    (Exporters usually prefer the higher protein content of hard red winter traded at KCBT to soft red traded at CBOT, thus making soft red carryover more burdensome at the end of the crop year.)

     

  • Buying May09 Gasoline(NYMEX)/Selling Sep09 Gasoline(NYMEX) on Wed 4/8 (#3177).
    Trade has been profitable 14 of last 15 yrs - Average: $1194
    (As gasoline consumption rises and inventories are accumulated, accelerating demand most affects cash markets and drives bull spreads through April.)(Comment next week.)

     

  • Buying May09 Wheat(KCBT)/Selling Dec09 Wheat(KCBT) on Thu 4/9 (#3178).
    Trade has been profitable 12 of last 15 yrs - Average: $306
    (Comment next week.)

Correlation Studies:

Correlation studies usually don't change on a day-to-day basis, especially when multi-year, multi-contract, and all with relatively high correlation numbers.

In addition, analyzing correlation studies is subjective, and one must use them as a tool rather than as a trading system. You must realize that even high correlation studies can follow a market pattern for an extended period of time and then suddenly deviate from this expected pattern. We like to look at correlation studies as giving us roadmaps as to where the price might go. Then we use other shorter-term trading tools for navigating the markets on a daily basis.

Dow Industrials: Single-year correlation for cash index projects potentially dynamic rally throughout April and eventually into June; but new single-, different-year study for September futures suggests higher into early/mid April, then sideways/lower through July.

Dow Transports: Two-year correlation for cash index suggests persistent rally into mid April, pullback into May, then higher still into July.

Dow Utilities: Single-year correlation for cash index projects lower into May.

S&P 500: Correlations for cash index and for June futures project rally from early April into May.

S&P 100 (OEX): Two-year correlation for cash index suggests modest rally from early April into June.

DAX: Single-year correlation for cash index projects bounce into mid April, lower into early May.

CAC-40: Correlation for cash index projects rally throughout April and perhaps into May.

NIKKEI 225: Correlation for cash market suggests lower into late April, then potentially dynamic rally into July; study for June futures projects sideways/higher into May.

SPI 200: Correlation for June futures projects strong rally into May.

Ten-year Treasury Notes: Correlations for June & September futures projects potentially sharply lower prices into May.

Eurodollars: Correlations for June & September still suggest uptrend intact.

Gold: Correlation for October futures suggests sideways/lower into mid April before major uptrend into September/October begins.

Platinum: Five-year correlation for July futures projects choppy trade in April, then rally into June.

Silver: Correlations for May & September futures project modestly lower into mid April.

Copper: Correlations for cash market and for May & July futures project lower from mid/late April through May.

Japanese Yen: Correlations for cash market and for June futures project sideways/lower into May.

British Pounds: Correlations for cash market and for June futures suggest dynamic rally through April.

Canadian Dollars: Correlation for cash market suggests lower into mid April, then rally into mid May; study for June futures projects rally throughout April.

Crude Oil: Correlations for cash market and for May-October futures suggest dynamic rally NOW, with those more deferred suggesting rally to last through July.

Heating Oil: Correlations for May-November futures suggest dynamic rally at least through April.

Gasoline: Correlation for cash market suggests steadily lower from mid/late April into June/July; but studies for May-September futures project dynamic rally at least through April if not for several months.

Natural Gas: Correlations for May-September futures suggest potentially dynamic rally NOW, with study for October suggesting more moderate rally through April and then sideways/lower into July.

Cotton: Correlations for May & July futures suggest modestly lower into mid/late April.

Lumber: Correlation for May futures suggests sideways through April; study for July projects choppy through April, then rally into May; study for September suggests sideways/lower for months; new study for November projects lower through April.

Coffee: Correlation for May futures suggests modestly lower into April; study for July projects sideways into mid May, then abruptly lower.

Orange Juice: Correlations for May, July, September & November suggest continued erosion.

Soybeans: Correlation for May futures projects moderate rally into April; study for July suggests sideways through April, with dynamic rally beginning in May.

Soybean Oil: Correlations for May & July futures suggest sideways trading range; study for August projects sideways/lower into May, then dynamic rally.

Corn: Correlations for May & July futures suggests lower through April.

Oats: Correlations for May, July & September futures project choppy, sideways during April.

Wheat: Correlations for May CBOT, KCBT, and MGE futures project rally into mid April; but study for July CBOT now suggests lower through April.

Rough Rice: Correlation for May futures suggest rally through April; study for September futures projects erosion into May; study for November suggests choppy, sideways/higher into June, then lower.

Live Cattle: Correlation for June futures projects rally throughout April.

Feeder Cattle: Correlations for April & May futures project much lower.

Pork Bellies: Correlations for July & August futures project choppy through April.

Milk: Correlation for April futures suggests erosion through expiry.

Best Regards,

The MRCI Team
http://www.mrci.com

 


SEASONAL TENDENCIES ARE A COMPOSITE OF SOME OF THE MORE CONSISTENT COMMODITY FUTURES SEASONALS THAT HAVE OCCURRED OVER THE PAST 15 YEARS. THERE ARE USUALLY UNDERLYING FUNDAMENTAL CIRCUMSTANCES THAT OCCUR ANNUALLY THAT TEND TO CAUSE THE FUTURES MARKETS TO REACT IN A SIMILAR DIRECTIONAL MANNER DURING A CERTAIN CALENDAR PERIOD OF THE YEAR. EVEN IF A SEASONAL TENDENCY OCCURS IN THE FUTURE, IT MAY NOT RESULT IN A PROFITABLE TRANSACTION AS FEES, AND THE TIMING OF THE ENTRY AND LIQUIDATION MAY IMPACT ON THE RESULTS. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT HAS IN THE PAST OR WILL IN THE FUTURE ACHIEVE PROFITS UTILIZING THESE STRATEGIES. NO REPRESENTATION IS BEING MADE THAT PRICE PATTERNS WILL RECUR IN THE FUTURE. HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS. RESULTS NOT ADJUSTED FOR COMMISSION AND SLIPPAGE.

Please Remember: These are NOT trading recommendations. They are provided for information purposes only and are intended only as potential ideas based on the market's own performance in the past, but past performance is not necessarily indicative of future results. Futures trading involves substantial risk of loss.

Copyright © 2009 Moore Research Center, Inc. No part of this may be retransmitted without written permission.

Last Updated on Tuesday, 21 May 2019 11:02  
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