Today is Sunday, October 10th and we are summing up the trading week results.
10-YR T-NOTES, 3,469;
Australian dollar, 4,560;
Open positions at the current moment are:
10-YR T-NOTES, long position – 5;
Crude Oil, short position – 6;
Silver, short position – 6;
Sugar, long position – 13.
Let’s consider last trading week’s deals in details.
Firstly, this is our map of COT-Setups for week 40th.
Cocoa (closed position)
Setup to buy was on week 37th. Setup is well implemented.
Our cocoa position was opened on Monday the 37th week. 13 contracts were bought. On the week 37th, part of the position was closed. We recorded the profit of $ 17,000 (Trading week 38). Second part of position has been closed this week with profit $4,680.
We closed the second part of the trade by seasonal factor. Since that we have seen that seasonality has been changing and going down. The second reason for closing the trade was the strong overbought of cocoa. The price rose without any rollback as well. There were high risks of a reversal of the instrument.
The total profit from setup and trade is $21,680.
We congratulate all our subscribers who has managed to catch this great cocoa trend. Well done!
We see that after our exit there was the attempt to grow, but on Friday there was the blocking day and the closing price of the week fell below the opening price.
At the moment, the COT index is discharging. We think that in a week or two a setup will form, and the bubble pattern will also form. We will be waiting for a week. There is a chance a setup to sell will appear and then it will be possible to trade by seasonality. It will be in the opposite direction.
Australian dollar (closed position)
SetUp to sell for Australian dollar was published in the weekly trading plan W39.
It was the short-term trade. The price approached the support level and turned around. We entered on the short-term pattern and did not plan to keep the open position for a long time. Because the price didn’t break through this support level, we has left the deal. In daily comments on the market, we wrote about this. Now we see that it was the right decision. The price has turned around. Profit here is $4,560.
By seasonality, we also see that the price has come to support. And there is a range for growth. We think that next week there will see more promising markets for trade. Therefore, we will not trade the Australian dollar so far.
10-YR T-NOTES (open position)
Setup to buy was for 30-yr T-bonds.
We entered into the 10-yr T-bonds deal, as this instrument looked weaker in terms of price structure and the risks were less ($1,780 vs $656 per contracts). Now the picture on the cot-index shows the opposite situation – we should sell. This happens when markets are correlated. It is possible that commercial players are hedged.
Entry to the trade was on the short-term pattern. The approach is similar to the Australian dollar. We entered, 2-3 days in the deal and took part of the profit. In this case we earned $3,469.
Further strategy for the open position is seen as follow. In the near future, seasonality will be declining. Friday was the weak day, but not the reversal day as Friday’s close has been higher than Thursday’s close. The accumulation is bullish and there is a chance that the price will go against seasonality. If there is a declining day on Monday, we will exit the trade by the end of the trading day. Currently, stop loss is at breakeven for the open position.
Sugar (open position)
SetUp to buy for Sugar was published in the weekly trading plan W40.
Here the seasonal factor plays a big role. The position is open. We moved stop loss closer to the market. Stop Loss is now below the short-term low. Here we need to look carefully.
According to the results of trading on Friday there is the short-term pattern to buy. It is an inside day with the close up. The previous day was with the close down as well.
But we see that sugar is growing very weakly. Other indicators also tell us that sugar is not strong as it was the week ago. Therefore, we will not buy more contracts, but rather focus on minimizing risks if the price goes against us. So, for this instrument, we look at how the trades will be held on Monday and we will make a decision.
Silver (open position)
Setup to sell was on week 37th. We were looking for a weaker instrument for metals. We chose silver.
We trade the mini contract, as the risk for one standard contract was about $7,300.
Here most likely there was a rebound from MA18. If on Monday the price goes down, we will place the stop above the short-term high.
By seasonality, we see that there may be a correction, but a further decrease. The momentum is bearish.
We are waiting for Monday.
We took crude oil for the trade. This is the impulse trade. Currently, the risks have been reduced.
Seasonality is bearish, momentum is bearish, and accumulation is bearish. There is a good chance that crude oil will continue to decline and the stop loss can be placed even closer to the opening price.
As mentioned earlier, there may be a sideways for another short period. But if crude oil continues downward movement, it will pull the CRB index along with it. It has a lot of weight there.
By the way, we can even see $ 30 on crude oil. There may be a super trade until the end of the year 🙂 We will observe.
To sum up the trading week:
10-YR T-NOTES Profit $ 3,469
Australian dollar Profit $ 4,560
Cocoa Profit $ 4,680
Total profit $ 12,709
Today we will plan for the upcoming week and consider new setups.
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Trade smart, Insider Week team
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