Because market timing is never something we will know with any great accuracy, it’s important to keep trying and probing.  Even though, I’m much more interested in the downside of a lot of these markets, I’m still actively setting up trades to take advantage of the long side.  As always, every trade, long or short, know your entry, your exit, your target, your risk, and your reward.  Under no uncertain terms, these are all givens.  It’s the research and preparation that goes on before you relay an order to your broker.  There is zero tolerance for improvisation when you have your trading groove on.

So, where is my attention tonight?  How have my thoughts adjusted over the past 24 hours?  Yesterday, I had orders on in Bonds, Cotton, Sugar, Silver, and Crude.  I got zero fills.  No biggie.  It played out as a very orderly “bounce” / range bound day after a monster trend day.  Perfect days for losing lots of money.  I was grateful not to get pulled in.  And, it gave me a chance to look at things again with fresh eyes.  What do my “fresh eyes” see?  Two things primarily: #1) I’m less interested / concerned with equities, bonds, metals, dollar…. more small moves ahead… worth waiting for the story to develop further before taking key positions.  #2) It brought a little more personal interest towards the bullish scenario.  So, I personally will be looking for both long and short side on some of my key remaining markets.  But, again, I’m putting some of the gunpowder back in the shed.

Sure it could have much more to go.  But, with GDP in the morning, this isn’t a bad time to take some profit.

I’ve looked through my other indicators both fundamental and technical and I have some mixed feelings about this.  Open interest and seasonals are very encouraging for the bearish play.  But, my statistically validated indicators aren’t lining up.  Furthermore, I just don’t see a solid story on the fundamental side.  As always there is a high probability that my conservative stance will lead me to a place of some mild regret.  Regardless, for now, watch that price action and general participation.

Key date: November 9th

Key price: 20.25

One market that has my attention at the moment: coffee!  Quite curious?  Read on.

I haven’t done my homework on this.  But, I’ll go as far as saying, the following chart caught my interest:

What you see here is a weekly chart of coffee.  It looks to be breaking out of a bullish wedge.  The bottom chart represents a seasonal pattern for this market.  There is a nice seasonal uptrend on the horizon.  And the wedge itself offers an interesting model for timing.  If this thing were to really break out to the upside, I’d say sometime in the last quarter would make sense just based on what the chart is suggesting.

Keep in mind:  I’m still waiting on that Sugar short to set up… or more interesting is a possible short on the equities market in early November.  I look forward to whatever opportunities lie ahead.

What can you do? Let’s start with what you can’t do. You can’t change your mind every session. It’s an expensive habit. I’ve tried it before. I’m in these positions based on principle. Those principles are rooted in a plan of action. I will follow the plan to it’s very likely somewhat painful outcome. So be it. If the markets have taught me one thing, they’ve taught me not to spend too much time trying to monkey around. If you have a call, make it, and follow it to it’s end.

It’s great to really get into the markets, into a particular opportunity. You get to know a particular indicator inside and out. You know every major wiggle or waggle of an oscillator and how the market is likely to respond under such a circumstance. But, if you are not feeling profoundly connected with a serious exit strategy at hand, you best run for cover or just stay the course.

On another subject, here is an shot of an interesting market:

Copper has had a tremendous recovery. (Much like sugar.) I don’t think copper is over. But, this is one I have my eye on going into the fall. If you don’t see what I see, I’m looking for opportunities on the short side for this one.

Copper: At 287 copper is looking tired. Although I wouldn’t be surprised to see some test around 302. Nevertheless, it’s a sensible person who tries to get rid of some of this at these prices.

These markets can’t stay up forever. But, I’m not to keen on being a hero. I know the FDIC report may rattle a few feathers tomorrow. But, these are strange times. All news is bad and the markets continue their ascent to the top. I think a little more optimism in the air and anguish from those who better understand the reality.