Last week, October 2012 sugar futures opened at 20.25¢ per lb. and closed at 19.58¢. More impressive is sugar's downward trend in August, as it opened at 22.59¢. Looking at the daily chart you can see sugar taking off from 19.50¢ mid-June, hitting the high of 24¢ in mid-July and landing once again at 19.50¢ this past Friday. A nice ride up and down if you caught it.
The technicals on the daily chart show sugar in a very strong trend down with ADX at 55. As you can see the last time ADX was at 55 it highlighted a very strong trend up a little over one month ago. MACD is bearish being below the signal line and the zero on the histogram line. Over the past eight trading sessions we do see MACD dropping divergence and Stochastics are in deep oversold territory, entering there on Aug. 6. The red lines on the daily chart are showing where the TS Analyzer at Trends in Futures highlight trade set-ups that we go over in daily updates and videos.
Proceed to Page 2 for the latest COT Data...
On the weekly chart you can see sugar’s flight path over the past couple of months. You also can see how the drop in sugar prices was supported by big money liquidation by looking at the COT Disaggregated Report. The drop never would have been as smooth without these actions by big money that continued into last week. This past week we saw Producers go from -238,446 contracts net short to -212,038. Managed Money went from 98,297 contracts net long to 75,050 and Swap Dealers went from 133,669 contracts net long to 140,442.
So will sugar head below $19.50 or take off once again? Reading the COT will help answer this.
If you need help understanding how to understand how to use the NEW COT report to your benefit get instant access to my new e-book "What Lies Beneath ALL Trends". It is filled with eye opening information.Commercial Net Tracker instructions: This form tracks the Commitment of Traders (COT) data for the commodity futures market. This form "looks" at the most recent five weeks of COT data and provides visual indications of the data. A) If the current value is at a 12-month low, the cell will display a red/burgundy background. B) If the current value is at a 12-month high, the cell will display a green background. C) If the current value went from net negative to net positive, the cell will display a blue background (indicating a bullish condition). D) If the current value is both a 12-month high and also went from a net negative to a net positive, the background will be green. You should view the data with green backgrounds to determine if they also went from net negative to net positive.
Proceed to Page 3 for this week's detailed fundementals...
Have a prosperous trading week.
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