Commodities

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Daily High Grade Copper futures - July2014

Taking Profits in High Grade Copper

We sold our July High Grade Copper futures contract yesterday at 3.21.  We were long from our 310 strike price option we exercised (see previous posts: Copper) , yielding us $2750 (we were long from 310, sold at 321, so we made 11 points x $250/point).  Since we paid $2038 premium for our 310 July call option, so we made a net profit of  $712.00 or made 35% ROI on this trade.

 

Daily Cocoa futures chart - Sept 2014

We Just Shorted Cocoa Futures – 3rd Time is the Charm

Cocoa futures hit a new multiyear high back on July 3rd, and we’ve been waiting on a 123 top formation to short Cocoa futures (see previous post: Cocoa Hits Multiyear High).   We just bought a Sept. 2014 Cocoa Put option with a 300 strike price for $290.  As you can see in Daily Cocoa futures chart below, prices closed just below the #2 point of 3085 yesterday, and today they continued edging lower closing out the day at 3055.

The 50% Retracement on the Daily chart (see below) is at 300.5,  so our 300 strike price put option will be at the money if prices drop another 50 points.  HOWEVER, the 50% Retracement on the Weekly Cocoa futures chart (see below) is 2598, meaning this trade for such small risk ($290) could net us huge gains!

This will be the 3rd time we’ve shorted Cocoa futures with an option, but the previous 2 times our options expired worthless and out of the money.   Prices have to drop eventually, so 3rd time is the charm!

Daily Cocoa futures chart - Sept 2014 Weekly Cocoa futures chart

Weekly Corn

Corn Hits New Multiyear Low

Back in January this year, Corn futures had reached as low as 408 (see Weekly Corn futures chart below).   Today, September Corn futures hit as low as 397.50, making it a new low (the last time prices dipped below 400 was in 2010).

We are going to be watching for a 123 bottom formation before going long the Corn market.  Stay tuned!

Weekly Corn

Daily High Grade Copper futures - July2014

Copper Takes Off – Moving Our Stop-Loss to Lock in Profits

Boy, are we glad we exercised our High Grade Copper July Call Option and are long Copper futures from 3.10 because over the last few days, Copper prices have shot up to ~3.27 (at the time of this post).   See Daily High Grade Copper chart below.

Previously, we put our Stop Loss at 309  (just below the support level of 3.0985 – see previous post:  Exercising Our Copper Option And Going Long).   Now that prices have shot up, we want to lock in those profits so we called our broker and had him move our stop-loss to just below the support level of 3.147 at 3.14.   If prices continue to rise, we will gradually move our Stop Loss up to lock in more profits.

Daily High Grade Copper futures - July2014

Daily High Grade Copper Chart - July 2014

Exercising Our Copper Option And Going Long

We have been long High Grade Copper futures since April 24 (see our Copper posts here: InstantCommodityTrader.com/blog/category/copper) and our 310 strike price Call option for the July 2014 contract month expired on 6/25 (yesterday) at which time we exercised our option and are now long High Grade Copper futures from 310.

We  put in a stop-loss order to our broker to sell our contact at 309 if prices fall below the support level of 3.0985 (see Daily chart below).  Since we are long from 310, we would only lose $250 if prices go that low (in addition to the premium we paid for the 310 Call option back in April).  If prices continue rising, we will gradually move our stop-loss up to lock in profits.

Daily High Grade Copper Chart - July 2014

Daily Cocoa chart - Sept 2014

Cocoa Hits Multiyear High

Cocoa futures hit a new multiyear high today. The July contract month hit 3138. Over the next few days we will wait to see if a 123 Top Formation gels and then we’ll short the Cocoa market. The 50% Retracement Level on the Sept. Daily Cocoa chart (see below) is 2990, and on the Weekly Cocoa chart (see below) is 2592. There is huge downside profit potential in this trade, especially since the last 2 times we shorted Cocoa prices kept rising. Third time’s the charm!

 

Daily Cocoa chart - Sept 2014Weekly Cocoa chart

Daily Coffee futures chart - Sept 2014

Selling Coffee Option and Taking Profits

Today, Sept. Coffee futures touched as low as 174.8 (at the time of this post), and they had reached as low as 173.25 last Wed. 5/28.  We have been short Sept. Coffee futures from 180.0 with our Sept. Put option (1800 strike price) we bought for $4435 back on 5/9 (see previous post:   Short Coffee Today After Drop Below Support).  As shown in the Daily Coffee chart below, prices are very close to the 50% Retracement level of 170.4, now for the second time since last Wed.   Yes, prices could continue to drop and even surpass the 50% Retracement level.   However, today we sold our Put option for $6,341.

That gives us $1906 profit and 43% ROI in LESS THAN 1 MONTH!

Daily Coffee futures chart - Sept 2014

Intraday Gold Futures - Aug 2014

Gold Futures Collapse Through Channel

Gold futures collapsed today, breaking through the channel on the bottom side, signaling a major move down.  As we noted in our previous post: Gold Sideways Move Presents Trading Opportunity, Gold has been traveling sideways in a channel bounded on the bottom side by a low of 1268.5 and on the top side by a high of 1315.7.

Today, Gold prices tanked, going as low as 1264.5 for the August 2014 contract at the time of this post.  Normally, when prices break out of a sideways channel, we go long or short with the expectation of prices moving up/down the same ‘distance’ as prices moved sideways.  But we’re not going to chase this market.  Prices moved suddenly and violently today so we want to wait and see if they climb a little first before we enter the market on the short side.  We’ll see if we can catch it before it drops too far down.   Stay tuned!

Intraday Gold Futures - Aug 2014

Daily Wheat chart CBOT - July 2014

Wheat Futures Plunge Leaves No Trade

We’ve been following Wheat futures since a new 12-month high of 744 was reached on May 6th (see previous post:  New 12 Month High in Wheat Futures).

We waited for a 123 top formation, but instead prices tumbled almost straight down over the past 11 trading sessions (see Daily Wheat chart below).  At the time of this post, July Wheat futures are around 656 and the 50% Retracement Level is at 650.63, so that doesn’t leave much room for profit given that we look to make the difference between the #2 point and the 50% Retracement.  Since there was no discernible 123 top to signal a change in market direction, we missed the ride down and and we don’t see an opportunity to trade this market at this time.  Stay tuned.

Daily Wheat chart CBOT - July 2014

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