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Bernstein's Weekly Commodity Letter July 2009

Bernstein's Weekly Commodity Letter July 2009

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Published by: TradersNarrative on Mar 04, 2010
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09/16/2010

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 © 2009 Network Press Inc. PO Box 67367 Scotts Valley CA. 95066 USA800-678-5253 831-430-0600 FAX 831-430-0900 Email: jake@trade-futures.com
III
 
 Jake Bernstein’s
 
Weekly Commodity Trading Letter
 
A Comprehensive Guide to Trends, Timing, Cycles and Seasonals in Futures
Since 1972 Vol 2009 Issue 27 
 Learn HowTo CREATEand DEVELOPYour OwnTradingSystem(s)At my NEW Trading SystemDevelopment4 SessionsWebinarPART II12-14-17-22 JulyRecordedSessions will beAvailable
I will show you howto: Go fromCONCEPTTo STRATEGYTo TRADINGSYSTEMWithout program-ming skills or knowl-edge using the pow-erful features of theGenesis Navigatorprogram and my 4-part procedure. Toget online access tothe entire recordedseries or
for moreinformation orto sign up callmy office at800 678 5253 or831 430 0600
For the Week Beginning 6 July 2009
Markets are notorious for making fools of most of us most of the time. This should not surpriseanyone who has been a trader or an investor for even a few months. And those of us who havebeen involved in the markets for 4 decades or more have seen the markets test us time and timeagain. Without a doubt it is the test of strength that separates the winners from the losers. Thecurrent market environment is no different than any market climate that has come before. In fact,it is uncanny in its similarity. But lest you be fooled into taking the wrong actions at the wrongtimes by the similarities let us focus on the differences. Similarity is obvious and easily recog-nized. Differences are often not obvious or glaring and therefore they are overlooked. If you fo-cus only on similarities then you will be blinded or seduced by their repetition and you will loseyour vision. Although what is happening in the stock and commodity markets today has hap-pened before, the odds that it will create many fabulous buying opportunities does not
ipso 
 
facto 
mean that it’s time to jump in at this time.Clearly all of this handily fits into the SETUP, TRIGGERand FOLLOW THROUGH model that I have developed over the years and that I have writtenabout in this newsletter on so many occasions.
What’s my Point?
Let’s look at some timing triggers and follow through in S&P futures as an example of what Imean. In so doing the example will serve both an educational purpose as well as a recommenda-tion. Shown below is the WEEKLY S&P futures chart with my MA channel (MA 10 high and MA 8low) along with MACD (9,18) divergence. (Continued on page 7)
Your Second Opportunity Approaches: The “Double Dip
 
 
 © 2009 Network Press Inc. PO Box 67367 Scotts Valley CA. 95067 USA 800-678-5253 831-430-0600 FAX 831-430-0900
Jake Bernstein’s Weekly Commodity Trading Letter Page 2 of 8
 
I have been telling you “at this time of the year the seasonal tendencies for corn and soybeans are ideally bullish, however, the seasonalcharts show that the rallies are not likely to last much longer”. The forecast was correct. Ideally, seasonals remain bullish until early Julyfor soybeans and corn but now that the ideal time frame is upon us, time is running out. A weekly close above the July high once themonth of July is over would be considered bullish. See my short-term technical indicator analysis below. The decline in corn has beenconsiderable whereas soybeans have held well. Wheat and oats are also weak seasonally but lows are likely this month.
COWS (Corn, Oats, Wheat and Soybeans)
Soybean Complex:
 
I advised you that short term buy triggers developed in the soybean complex. These lows were signaled by myMAC (moving average channel) method. The trigger, to go long with considerable risk was correct and all profit targets were achieved. Ihave advised you to expect a seasonal top. Remember that the trigger now necessitates a target as well as a stop and trailing stop. Aseasonal decline remains very likely.
Corn:
 
Seasonal lows were predicted and were made. The expected rally developed, as did the recent top. The bullish conclusion wasbased on my Weekly Seasonal Futures charts and my Monthly Seasonal futures charts. Seasonals are ideally bullish until early July.The current decline was triggered by several sell signals which I illustrate for you on the chart below. It would now take a weekly closeABOVE the June high to turn bullish again on corn.
Wheat:
 
Await wheat buy recommendations. As in all the grain and soy complex markets, the intraday price swings in wheat will con-tinue to be large and they will therefore require large stops. The usually bearish seasonals are likely to keep rallies in check until after the Jly lows are in place. Do not follow strength at this time. Await seasonal lows. A significant decline is still possible this month.
Oats:
 
The intermediate-term uptrend remains bullish with support having been tested. I told you that “
This is one of the most bullishlong term developments I have ever seen in oats
and a buy trigger on a short term basis has confirmed the COT Commercials bull-ish stance. Prices reached short-term targets but then reversed lower on sell signals. The market may well be dragged lower withwheat and the other grain and soybean complex commodities inasmuch as the seasonals are now ideally lower.
 
 
Jake Bernstein’s Weekly Commodity Trading Letter
 
 © 2009 Network Press Inc. PO Box 67367 Scotts Valley CA 95067 USA 800-678-5253 831-430-0600 FAX 831-430-0900
Page 3 of 8
 
Copper:
 
I advised you that a weekly close above the March highs after the month was over would be extremely bullish for copper.The market performed as expected. Bearish divergence continues to be a serious concern on the daily charts, however, the weeklyup trend (see chart below) remains intact and clearly bullish.
Metals
Gold and Silver:
 
Gold prices were expected to go higher but I also WARNED you that “the near term future remains in doubt”. Mylonger-term forecast based on the long-term cycles and technical indicators suggest a $2000+ target when the next cycle peaks.This, however, could take some time to develop. Buy at monthly or weekly support. BE PATIENT in waiting for a decline. I am in nobig hurry to buy gold inasmuch as the seasonals are still ideally bearish until mid to late August. The next few weeks could thereforewitness considerably lower gold prices. As such I advise being patient.It should also be noted that my next cycle low was due ideally in the first half of this year or even as late as August. That low has notbeen made as of this writing in spite of the fact that we are in the correct time window for a bottom. I would not be surprised to seeone more significant selloff in gold and in silver as prices begin to decline to their seasonal lows in August which could also turn out tobe the longer term cycle low in gold prices. BE CAUTIOUS if you are long.
 
Platinum/Palladium:
 
My long-term forecasts for platinum and palladium have been bullish and I am still long term bullish in spiteof the recent corrections down which were discussed in this newsletter well in advance. The long overdue correction brought pricesback to reasonable support levels. I am more bullish on platinum and palladium in terms of potential price appreciation than I am ingold or silver.
Cattle and Hogs:
My analysis of the COT Commercials positions in CATTLE AND HOGS continues to LEAD ME TO THE ines-capable conclusion THAT a LONG TERM bull market is still developing. The COT Indicator as I use it suggests that Commercials areaccumulating long positions, which I consider to be bullish. The current time frame is one of ideal seasonal rallies in cattle as well asin hogs. Some of my timing indicators have turned bullish on both markets. Given the extent and length of the declines, rallies couldbe fast and furious.
Meats

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