Jurgens Bauer's Comments on the Soft Commodity Markets for 05.16.08
I cannot begin to express my extreme disappointment and frustration with ICE. Thursday's fiasco was especially annoying when trading was halted for over three hours due to a power outage (in Chicago no less). You might think that an Atlanta based company who promotes electronic trading as the end all be all would have a suitable back up system in place, obviously they don't. Oh, that's right, they closed the outcry pits in futures (a built-in back up) and give the impression that they have every intention of doing the very same at their earliest opportunity with the option pits.
Since ICE acquired NYBOT they have repeatedly failed to communicate with traders on the floor and even their own personnel. In a reliable business communication is not simply a matter of dictating policy. Appropriate corporate communication involves a proven marketing technique, inquiring from your customers (in this case seasoned, experienced, professional traders with a vested interest in the business) their needs and wants and then actually listening to them before making policy decisions. Appropriate corporate communication requires (or maybe demands) being up front with those who derive their livelihoods from years of buying selling and promoting the products you now own.
As an experienced professional I am angry. When situations like this arise I am reduced to searching on line to obtain information to pass along to clients about what, when, where and how the soft markets will be back up and available for trading.
I did hear a good rumor though, (excuse me if I cannot confirm), but while the platform shut down and ICE leaders were involved in a board meeting, one of their top guys was in Washington involved in discussions regarding the impact of electronic trading. You can't make stuff like this up..., but since I can find no evidence on the internet...
Cotton: Exports weren't as bad as some may have thought. The day was dominated by the shut down, although at the last minute, (and after most traders had left), options opened for 10 minutes of trading. Seems somebody needed to sell some strangles in July, which traded at 23% volatility.
Coffee: Might have broken lower, when oil prices dropped, but since oil recovered, (crude prices had an almost $6.00 range, moving first up, then down then back to unchanged on option expiration day), by the time coffee futures were available to trade they only moved down slightly.
Cocoa and Sugar: pretty much the same. Both were lower, but not in the way one might have expected had the opportunity to transact been available.
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Jurgens' Technical Support and Resistance
05.16.08
Cotton: (70.13 +0.14)
Support: 69.55-69.40, 68.80-68.50,
Resistance: 70.55, 71.35, 72.20
Coffee: (136.80 -0.90)
Support: 136.00, 134.40-133.80
Resistance: 140, 142-142.50, 144
Sugar: (11.00 -0.05)
Support: 10.95-10.88, 10.50
Resistance: 11.32-11.35, 11.59
Cocoa: (2629 -20)
Support: 2615-2595, 2550-2535,
Resistance: 2650-2667*, 2713-2721
©2008 Jurgens Bauer & Associates all rights reserved.
Trading floor: (212) 748-3898, cell: (973) 652-4694
Email me at jurgensb@gmail.com DISCLAIMER: Any information and opinions contained herein comes from sources believed to be reliable, but certainly not guaranteed as to accuracy or completeness. No responsibility is assumed with respect to any statement, nor with respect to any expression of opinion herein contained. All views are the opinions of the author at the time of writing and are subject to change without notice. No statement should be construed as an offer to buy or sell a commodity. This publication is for information purposes only: Any and all trading ideas suggested are hypothetical in nature and also subject to change without notice. Commodity futures' trading is speculative by nature and investors can lose more than 100% of their account equity. DISCLAIMER
©2008 Jurgens Bauer & Associates all rights reserved
