Commodities KC Arabica Coffee C (2 lettori)

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Recupero ieri del caffè sin quasi toccare la soglia dei 62cents sul contratto marzo, già si sono indivuati dei buystops sui 62,50cents; si ipotizzano compere europee per cautelarsi dal fatto che i porti della Costa d'Avorio stanno per cadere in mano ai ribelli

Daily coffee report
LONDON (January 03 2003) : Robusta futures in London settled slightly higher on Thursday in thinly traded outright volumes, as the market continued to consolidate in its shortened session ahead of the New Year holiday.

Benchmark March ended $14.00 up at $803.00 a tonne, while second most-active January closed $14.00 higher at $780.00 a tonne.

Traders said prices are likely to remain within their recent trading range in the short to medium term or until Vietnamese selling arrives.

It was added that Vietnamese activity continued to be absent but while speculators have withheld supplies of beans, exports are likely to pick up in January as farmers needed cash for the new crop and for expenses related to the Lunar New Year festival.

It was said that exports remained slow despite the harvesting of more than 80% of the crop.

In Brazil coffee farmer Lineu Costa Lima will soon take-over Brazil's agricultural production and trade secretariat.

He will replace Pedro de Camargo Neto, who, on top of heading government policy for Brazil's leading sugar and coffee sectors, also led Brazil's offensive against US and European agricultural subsidies at the WTO.

Arabica futures in New York tumbled to two and a half month lows but pared losses on the close.

Traders said it looked like bulls spent the last of their money to keep the market above 60 cents.

Most active March closed down 1.15 cents/lb at 60.20 cents, while May ended down 1.25 cents at 62.60 cents.

The back months finished 1.15 to 1.35 cents lower.

Trading is expected to remain quiet at the beginning of the New Year with many players still absent from the market.

FUNDAMENTALS:

UNITED STATES: According to CSCE, US certified coffee stocks rose by 10,300 60-kg bags to 2,681,406 bags as of December 30.

There were 97,541 bags pending grading, while 17,647 bags were graded and 8,644 bags passed exchange approval, CSCE said.

The United States imported 1.945 million 60-kg bags of coffee in September 2002 up from 1.510 million imported the same month last year.

That brought total imports in the first nine months of 2002 to 15.723 million bags, nearly 3% less than the 16.202 million imported the same period last year.

Total imports in calendar year 2001 reached 21.389 million bags down from 23.766 million imported in 2000.

Main suppliers of green coffee in January/September 2002 were Guatemala (1.287 vs 1.807 million bags), Mexico (1.563 vs 1.706 million bags), Brazil (3.055 vs 1.641 million bags), Colombia (2.582 vs 2.255 million bags) and Vietnam (1.492 vs 2.177 million bags).

The country exported 965,900 bags of coffee in January/September 2002, 11.5% less than was exported the same period last year.

Total exports in calendar year 2001 reached 1.292 million bags compared with 1.297 million exported in 2000.

VIETNAM: Vietnam exported 176,000 tonnes in the first quarter of 2002/03 (October/September) down from 218,000 tonnes exported the same quarter last season, government statistics show.

The General Statistics Office revised down sharply the November figure to 48,000 tonnes from a previous estimate of 75,000 tonnes but gave no reason for the revision.

Traders said several exporters have committed to deliver new crop coffee in November.

However, thin supplies in November, when growers started picking cherries, and farmers holding back beans on firming prices, have caused delays for about two weeks.

That meant several contracts registered by coffee exporters as due to have shipments executed in November had been delayed, resulting in a drop in actual export volume.

Exports in December 2002 were put at a mere 60,000 tonnes down from 89,000 tonnes the same month in 2001.

The country's industry body, the Vietnam Coffee and Cocoa Association (Vicofa) has forecast 2002/03 production at 9.0 to 10.0 million bags, while traders put it at 8.7 to 10.0 million.

HONDURAS: Honduras exported 106,841 60-kg bags of coffee in December 2002, down from 115,725 bags exported the same month in 2002, preliminary figures from the Honduran Coffee Institute (Ihacafe) show.

Exports in 2001/02 are estimated at 2.618 million bags up from 2.469 million shipped in the previous season.

EL SALVADOR: El Salvador exported 38,380 60-kg bags of coffee in December 2002, down 32% from the 56,782 bags shipped the same month the previous year, the Salvadoran Coffee Council said.

That brought total exports in the first quarter of 2002/03 (October/September) to 139,512 bags, up 15% from the 121,498 bags exported the same quarter last season.

Of the total shipped in the first quarter of 2002/03 120,824 bags (87%) consisted of old crop coffee harvested and processed during the previous season.

This compares to old-crop exports of 70,678 bags or 58% of the total volume exported in the same quarter last season.

Total exports in 2001/02 were put at 1.474 million bags, down sharply from the 1.715 million shipped in 2000/01.

The fall in exports is attributed to low global prices, which have been pressured by massive over-supply.

Total production in 2002/03 is forecast to fall below the previous season's 1.7 million bags.

IRELAND: Ireland imported 75,800 bags of coffee in January/June 2002, 9.9% less than was imported the same period in the previous year.

Total imports in calendar year 2001 reached 182,200 bags, down from 155,700 bags imported in 2000.

Ireland imports most of its coffee in the form of soluble from the UK.-Reuters




CSCE coffee recoups Tuesday's losses as funds buy
NEW YORK (January 03 2003) : CSCE coffee futures closed higher Thursday, rebounding from Tuesday's losses as funds and other short-term speculators bought back recent short positions, said dealers.

"Basically I think the people who sold the market on Tuesday were the ones who were buying it back today," said one trader for a coffee importer.

The benchmark March arabica contract closed up 1.45 cents at 61.65 cents a lb after trading 60.25-62 cents.

May likewise rose 1.45 to 64.05 cents, with the backs months up 1.45-1.60 cents.

Several traders said that origins were not seen as aggressive sellers Thursday and speculated that selling from Central American producers would probably increase next week.

In London, robusta prices surged late on buying by commodity funds.

Liffe's March coffee finished at $848 per tonne, a one-month continuation peak, up a sharp $42 after trading $806-$848. Spot January closed up $42 at $804.

"March made a new contract high close. Vietnam either doesn't have as much coffee as believed or they and some other robusta producers are becoming very good at co-ordinating their sales and right now they're not selling," said one softs analyst.

Other industry sources speculated that fighting near the key port of San Pedro in Ivory Coast might have prompted some buying of futures contracts by European roasters.

"Ivory Coast is not an insignificant producer of coffee, but much of their production goes to Europe because of their colonial ties to France," said one coffee buyer.

"The Ivorian crop should be harvested in the next month so the fighting there might delay things even longer," the buyer added.

Technicians peg chart support in March at 59.05 cents with resistance at 62.60 and then 63.20 cents.

Estimated volume slowed to 7,481 contracts Thursday from Tuesday's official tally of 10,992 lots.

Call volume came to 1,838 lots and puts amounted to 868 contracts. Open interest jumped 1,402 contracts to 69,388 lots as of Tuesday. The market was closed Wednesday for New Year's Day.-Reuters

 

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Segnali operativi presi da barchart.com

Composite Indicator -- Signal -- -- Strength -- -- Direction --
Trend Spotter (TM) Sell Weak Weakest

Short Term Indicators
7 Day Average Directional Indicator Sell Minimum Weakening
10 - 8 Day Moving Average Hilo Channel Hold Bullish
20 Day Moving Average vs Price Sell Minimum Weakest
20 - 50 Day MACD Oscillator Sell Strong Strongest
20 Day Bollinger Bands Hold Bullish

Short Term Indicators Average: 60% - Sell

Medium Term Indicators
40 Day Commodity Channel Index Hold Bullish
50 Day Moving Average vs Price Sell Weak Weakest
20 - 100 Day MACD Oscillator Buy Minimum Weakest
50 Day Parabolic Time/Price Sell Minimum Weakest

Medium Term Indicators Average: 25% - Sell

Long Term Indicators
60 Day Commodity Channel Index Hold Rising
100 Day Moving Average vs Price Sell Minimum Weakest
50 - 100 Day MACD Oscillator Buy Strong Weakest

Long Term Indicators Average: - Hold

Overall Average: 40% - Sell


projections for06-01-2003

 

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Lunedì muy positivo a NY per il caffè sui massimi delle ultime 3 settimane, la spinta è venuta dai fondi e dall'industria in forte acquisto, dalla cattura degli stop già localizzati la settimana scorsa sopra i 62,60 , e dal rafforzamento del real brasiliano sul dollaro sulle ali dell'entusiasmo per il programma di Lula ( ciò dovrebbe rendere meno pressanti eventuali vendite di origine brasiliana sul mercato). Si monitora anche la situazione meteorologica sul centroamerica , visto che gelate potrebbero nuocere al raccolto in Messico e dintorni. Altri stop si ipotizzano in essere sopra i 64cents visto che vi sono due gap da coprire in su, a partire da quello a 65cents.

CSCE coffee sprints to three-week high, options active
NEW YORK (January 07 2003) : CSCE coffee futures overcame early selling to close at a 3-week peak Monday as buying by commodity funds, locals, and speculators overcame selling from various producing countries with call options busy, dealers said.

"There were no shortage of sellers today, producers and European roasters, but the funds and the floor were able to get some upside momentum going today," said a senior broker for a trade house.

The benchmark March arabica coffee opened easier but closed up 2.00 cents at 63.25 cents a lb following a 60.75-63.90 trading range.

May settled 2.05 higher at 65.70 cents, with the back months gaining 2.00 to 2.20 cents.

Traders cited a number of factors they said contributed to Monday's rally.

"The option turnover was real good. There was a lot of call buying of the March 65, 67.50 and 70 cent strikes," one broker noted.

Some brokers said Monday's rally was aided by several layers of buy stops at 61.50 cents, 62.60 cents and over 63 cents basis March.

"There probably were stops above 62.60 cents, but there are more over 64.25 cents," said one broker.

Another source of market strength was the result of less selling from Brazil because of currency moves.

Brazil's financial markets soared on Monday as investors flocked back from their holiday vacations, riding the country's honeymoon with the new left-wing government.

The country's currency, the real, was trading at its strongest level since mid-September, surging to 3.338 per dollar.

"Brazil has less incentive to sell coffee when their currency is strong," said one commission house broker.

Some buying support may have come from weather fears for Mexico and Central America.

A weather forecast for potential cold weather damage to the coffee belt in Mexico and Central America drew a mixed response from traders as some felt too much of the crop has been harvested to make a difference.

"Numerous Arctic air masses will be plunging southward across North America, possibly into Mexico and/or Central America, over the next couple of weeks," according to Jon B. Davis, a meteorologist with Salomon Smith Barney.

In fundamental news, Guatemalan coffee exports rose 10.5 percent in December to 203,446 60-kg bags from 184,052 bags exported during the same month last year, growers association Anacafe said Monday.

In London, robusta prices reversed earlier weakness with Liffe's March coffee finishing up $10 at $834 per tonne after a $812-$835 trading range. Spot January ended $9 higher to $812.

Technicians raised support in March to 62.60 cents with resistance bumped to 64 cents and then 64.70 cents.

Estimated volume increased to 10,736 lots Monday from Friday's official tally of 4,447 contracts.

Call option volume came to 4,345 contracts and puts came to 3,391 lots.

Open interest fell 354 contracts to 68,872 contracts as of Friday.-Reuters

 

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E' uscito ieripomeriggio anzichè venerdì causa vacanze , il COT al 31-12-2002

 

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Phantom of the Pits
by Art Simpson

Chapter 6 - Rule Two




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ALS - Phantom, do you want to continue on rule one or is it time to move on to rule two?

Phantom of the Pits - There will be lots more on both rules so let's get to rule two and see the other side of the coin.

We will need to get to the qualifier of rule two but we will do that later. We'll state rule two right now.

Rule Two

PRESS YOUR WINNERS CORRECTLY WITHOUT EXCEPTION.

Sounds pretty elementary but correctly is the key.

Quoted most of the time is cut your losses. Cutting you losses is only one side of the coin. Without rule two, you will find that trading still isn't even a 50/50 game. Without a correct method to press your correct positions you will never recover much beyond your losses.

You need rule two to ensure you have a larger position when you are correct. You always want a larger position when you get a great move or trending market than when your position isn't correct.

There certainly will be debate on how you know when to add to a correct position and on how a market can turn a correct position into a wrong position. We will cover those debates later. First let us get the rules and reasons established. By knowing what is expected in rules one and two we can prove the theorem based on good assumptions and experience.

Rule two does not mean just because you have a position in your favor that you must now add to that position. Correctly in rule two means you must have a qualified plan of adding to your position once a trend has established itself. The proper criteria for adding positions depends on your time frame of expectation of your trade plan.

You might be a day trader just trading, a short term trader, weekly trader, monthly trader or trend trader only . The add criteria will be different for each trade plan.

The important point of rule two is to point out the rule is established in order that you can make the most gain with the least drawdown expectations. You must also use rule one properly.

Rule two is important for it keeps you in a good position as well as impresses upon your own thinking of having a correct position initially. Most traders are conditioned to want to take a profit to prove to themselves that they are right. Being right does not in itself make the most amount of profit.

Most traders also want to get out before the market turns and takes away any profit they may have. Ordinarily they will let losses get larger but only let gain get started before getting out. This is just simple human nature when having a market position. Human nature in trading is not often proper trading technique.

Always a good reason for adding to a winner is because traders usually tend to doubt the position unless they re-enforce the correctness of that position. Adding to the position correctly best does this. The other good reason is that you must be larger when correct a positioned than when your position is wrong.

Correctly adding to a proven position must be done so that a pyramid isn't established which will hurt the trader in a minor reversal. Each add of original position should be done in smaller and smaller steps.

As an example, if you put 6 contracts on as your initial position you should use 4 contracts for your first add and 2 contracts for your next add. This gives you twice the original position when all three positions are in place. This is a 3:2:1 ratio in establishment of three levels of positioning.

At all times during the trade it is important that rule one be in your plan. This includes when you are adding to your positions in order to protect your trade from any major reversals, which often happen.

Your plan for adding positions could be as simple as at each buy signal for longs and each sell signals for shorts. It could be on 45-degree retracements or support lines. Without exception in the rule indicates it is not an arbitrary decision on the trader's part as to whether to add. Keep in mind this does not exclude the correct method of adding in respect to variables of different trading plans. What is a correct way of adding in one trade plan may not be in another.

In review of rule two, it states only that you must add to correct (proven) positions and that it must be done correctly. The rule does not tell you how to add, as this is your requirement in the trade plan you develop. The rule makes no exception on adding to correct positions. The intent is twofold of rule two. It is to re-enforce your correct position both mentally in your thinking and by execution in increasing the size of your position.

ALS - Phantom, what do you say to the traders who are going to ask you if they must add without exception, why is there any question as to how to add correctly? Doesn't the fact that a proven position is correct indicate it is time to add?

POP - Adding can certainly be done this way but it is not always good for all trade plans. I often times add immediately when my position has been proven correct because I tend to do it in smaller steps and work more long-term trades. Let us say you are only a day trader trying to take out a little of the market each day.

You will find your adds at the wrong place by adding as soon as your position is proven correct due to the nature of the markets. They give you back and forth action much of the time, especially as looking a day trade. One correct way for a day trader is to see that the position is proven correct and then add at a proper retracement. This will not be the case for a trend trader.

A trend trader would most likely have at least one add at a breakout or break away gap. It all depends on your trade plan. Your method of adding must be validated by your trade plan.

Day traders will have a problem with rule two unless they position properly and understand that their adds must only be made correctly. Day traders are in for the quick profit so it is hard to have a good add plan. Their best trade is to put all positions on at once where original and adds are all placed at once and use rule one to take them off unless or until proven correct.

Believe me this is the proper probability in a loser's game as is trading. Rule two says you must add to your winners without exception. As a day trader you are only keeping a position if proven correct or until proven correct. In a sense the market is deciding how large your position will be. The variable can be from all to none in this situation.

Trend traders will get larger when they are correct but day traders will start larger and get smaller when they are wrong. Day traders can be large when they are wrong but Trend traders will never be large when they are wrong. This is due to the nature of a loser's game for day traders.

By reducing your positions when wrong, your exposure is not extreme for a day trader provided rule one continues to be followed. Exposure and risk are also an element of time in a position. That is the edge the day trader is expecting to work to their advantage. Trend traders are expecting higher probabilities in smoothing out the swings.

ALS - Aren't you changing the rule here for day traders?

POP - Rule two must be used if you expect to make money in the long run. Your validation of how you add is according to your trade plan and a day trading plan is certainly going to be geared for the quick profit so why shouldn't you have your biggest position to work with from the start.

Right or wrong, you are going to use rule one to protect at all cost. Criteria will be different for the type of trading you do and scalping or day trading is a lower probability of making money than most think. You have to be right when you get in and out and twice the execution cost for each trade.

A day trader takes most positions on a fade of an expected range and on what they consider to be the edge. Correctly for day traders is different for trend traders.

ALS - Wouldn't you say that adding for day traders isn't always a good rule.

POP - Adding correctly regardless of your time period is useful in making bigger gains in the long run. Day trading is certainly a shorter run. A day trader should cheapen the cost of what they have and to do this you almost certainly have to have your biggest position on first.

I use to watch a very good trader put a big position on and take it off until it proved to be correct. He made good trades and ended up with bigger gains by doing it that way than adding after being proven right. What you are missing here is his positions were larger at first and this really is the rule two in that you still are larger when you are correct than if you had added later this way.

The drawback is that you are larger when you are wrong too, but it's still a protected position if you use rule one properly. It is acceptable but again I must remind you that rule one is critical here.

It looks like a modified rule two but as I stated your trade plan determines your method of adding. It is understood that you want to be larger positioned when correct. This is a way to do a trade when you don't have an established trend and the probabilities are lower. I can't rule out this method. I have used it on short trades. When I feel I am trading an established trend, I have criteria for adding which gives better positioning.

These two rules are to give you the long-term ability to continue to trade with the least amount of drawdown and the best possibility of making the most money in the long run. Huge drawdown is the critical reason some traders go out of the business.

You must start your trade plan with rules created to protect your equity. I am presenting those rules to incorporate into your plan. Experience has proven these rules a necessity in survival and reaching your objective of making the most return with the least amount of risk.

The follow up to rule two took place after feedback from the Futures talk forum when traders expressed their questions about rule two.

Follow Up to Rule Two

It is clear that the traders are interested in more review on rule two. From the posts on the forum, it seems to be a problem of understanding not only why to use rule two but exactly how they should use rule two

I asked Phantom to give us more detail on his rule two in order that it can become more effective for the traders. Phantom feels that there are several problems in understanding his rule two from reading the posts of the trader's forum. We will address a few of the problems and also try to explain more on how to use rule two.

ALS - Phantom, It looks like your rule two is not a good rule for most of the traders who have given return input on your rule?

Phantom of the Pits - By now you should see why we are spending so much time on just rules one and two. Rule one understanding has been pretty good so far. Rule two has been a problem. I could see that coming in the past posts. There is doubt in trader's minds as to the real purpose of rule two and why they should be saddled with a rule, which requires them to put a bigger position on than they want to have.

The traders aren't going to like what I am going to tell them here but I know they want me to be totally honest with them. There are going to be several reasons why a trader does not want to come up with a plan to add to winning positions. I will try to cover some of them.

ALS - Why is it that rule two doesn't seem to work for most of the traders?

POP - One simple fact! That fact is that they are putting their entire position on at their entry into a market. This is not rule two's intent. A total position is a series of positions until the complete expected position is established. They should only have their entire position established upon getting the move as expected. Rule two addresses this expectation.

Keep in mind that I don't blame the traders for their views on my rule two. It is not their thinking but their trading situation we must address as a place to start with rule two. It is a solid rule and its importance can not be diminished in trading.

Until you see the reward from rule two, it is very difficult to understand a bigger position being anything but wrong to you as a trader. That is of course going to be some of your behavior modification. Learning by experience is the only way that most traders will be able to accept this rule.

It is important to learn this rule by more than just example. It is not a rule you learn by making a mistake. It is a rule you learn by being rewarded for using the rule.

How can we reward the traders for using this rule by example? I don't think we really can. Therefore, we will explain why they are having difficulties and ask them to soul search as to the truth of the problem being within their own situation.

The nature of trading is that more often you see a negative effect from what you have just done. Seldom do you see or remember the good effects from the proper trading as often as the negative. This will leave a plan to add to winners on the back burner when it is time to add unless you fully understand the need for this rule.

The first problem with understanding rule two is that any time a trader can or does not incorporate a plan to add to winners, they may be under funded and unable to margin properly the additional positions in the add. Another aspect of being under funded may only be that over trading in the original position is actually a problem from the start.

Anytime you plan a trade program; you must consider what size position you are looking to establish. If your position as mine often is, is that you will have a total of six units upon completion of your position entering, you can have a better idea of what you must fund. You need to be able to fund the position from the start properly.

I believe most traders want to have a certain size position and from the start, that is the position they place. This is not a correct way to allow you to use rule one and definitely rule two properly. You see from the start of trading an expected move, your thinking is counter to ever adding in the first place.

True you should be at least twice as big or larger when right than when wrong, but you must work that position into your trading plan. You never risk it all on the initial position being correct or you are defeating the rule. You are trading more like a day trader if you put it all on at once.


Another reason for problems with rule two is that traders are actually day trading in order to not have undue risk in their positions. This will cut their odds of making the goals expected in any kind of move. It is more of a hit and run type trading. This type trading leaves you vulnerable to the flow of orders into the pit.

We can never estimate the exact quantity or direction of order flow for more than a very short period of time except in established moves. Sure we have our three phase theory and it does work to an extent but never good enough for us to know without seeing before hand just where the price turns are going to be. Looking back we can always pick the price turns and possible support and resistance.

I want the traders to ask themselves two questions! "Do you put your expected position on from the initial entry? Are you planning for adds prior to your initial trade?" If the answer to either of these questions is no, then you must go back and rethink your trading program. I have said it before. If you can think it, you can do it. Perhaps the traders aren't thinking it to begin because it certainly is not expected thinking without the proper planning.

I knew we would have problems in trying to convey rule two and that is part of the reason we have stepped back to wait and see the blank stares. We have those blank stares as I can tell from reading the posts and resistance to rule two. That is ok for it is what can be expected from such a rule.

I don't want to get into telling the traders their game plan for actual trades or their trading programs. What I do want to do is to establish that you must consider the favorable side of adding to positions when they are correct.

More thought must go into rule two as it is not as self-explaining as rule one. It is true that rule two is what makes my money for me. It does it in the long run and not the short run. There are several good aspects to the rule. We have discussed a couple of them previously. The fact that re-enforcing a correct position actually keeps you thinking correctly is one of the important reasons of rule two.

Another aspect is that of course you will be with a larger position when you are correct. I think one of the of the hidden benefits of using rule two in your trading plan is that it will actually keep you from over trading from the entry through to the end of the position if used properly.

By incorporating rule two in your game plan from the start, you will be eliminating the desire to be proud when the market moves your way and want to take profits to show that you are right. Traders love to be right. This is your enemy to love to be right. Your motivation must be to love to do the right thing in trading by either re-enforcing correctly your position or removing it should it not prove out to be correct.

You see when you think you are right in the market, this is just the beginning of your trade. Not the time to take your profits to say to the world "see I was right!" Let me ask you, who really cares if your were right? So what? You will become the best trader you can be by being wrong-small not right small! Get that in your mind now.

You are going to have to press your winners if you really expect to consider yourself with the ability to make a living or extra income. Otherwise, face the truth that you are only playing to break even.

Who wants to play for a tie? I sure don't! I remember a trader asking me how I felt about making money in my early days. She wanted to know how much I made. I indicated to her that if I did not make at least a thousand dollars a day, it wasn't even worth trading to me. She said that she would be happy with a hundred a day. I asked her if she added to winners. She said that there was no reason to add to winners.

I didn't mean to laugh at her but what she said. I pointed out to her that if she had three days a week where she made money and two where she lost that she would be in the hole for it would be a 50/50 game if she was never able to add to winners. My point was that you must make bigger money on your good days and not just the same amount of money you lose on your bad days. You would be better working for a living rather than trading if that is the case.

Now I am not laughing at anyone! I meant what I said about my statements of respect for the small trader! They need to know just why and how important it is to press winners before they will ever be able to approach the idea into their trading plans.

It isn't an obvious thought to think that even before you trade, you must have a plan to be bigger when the market is going your way. The first thought is always what size position to take to reach your goal. You must understand that you are not the one who will determine your market position size. It is going to be the market and must always be the market.

Rule two is going to tell you to put a complete plan into effect before taking the initial position. The light is starting to come on about rule two now. I can see some raised eyebrows in anticipation as to what is possible now. Not only is rule two a saver of your drawdown by it's proper use but it is an enforcer in pointing that you are looking to have a complete position when your expected move allows you to be totally positioned.

I am a little ashamed I did this, but I purposely held back the best part of the rule in order to see who would come up with the important aspects of rule two. Rule one was hit bulls eye by I would say at least half of those on the forum who thought it out. Rule two may have had a few who understood but didn't really make a remark on it.

I do know one who did hit the nail on the head. At any rate, there were others I think who did not indicate much about rule two who most likely had some good clues.

On adding to winning positions, I could give you my trading plan and my signals and tell you exactly when to add. But that would be doing the same thing as digging out the Mississippi on the West Side and changing its course.

I would be better off trading for you and you would be better off giving me your money to trade. I don't want that at all. Don't forget my faith in the small trader. You shall have to see the prospects of rule two more clearly yourself.

I can not help you with over trading or being under margined. You must correct that situation before you can ever expect to be on even ground with the big funds. You must at all times be able to only put a portion of your expected position on at entry and be able to at least double your size somewhere along the route of an expected move.

The protection is rule one but the biggest protection is rule two! Now I am going to tell you why rule two is the biggest protection of all. You never suspected what I am going to point out.

You have all heard to not add to a loser! Well rule two takes care of that from the start by keeping you with a smaller entry position in the first place. You never have your entire position until you are getting the move you had expected.

Now why would I encourage you to have half of your total position at entry? Because it is a losers game from the start and you knew that from rule one. Now from rule two, you find out that in order to trade it correctly, you were never really suppose to have your initial position upon your entry of a trade.

Can you tell me that you don't expect the market to fade your trade to a slight point? You really are going to pick a range when you are right and you are going to be at least half size when you are not proven to be correct. When you take your loss with rule one, it is a milder way of slapping your equity from the start.

Are you beginning to see any of the value of rule two yet? We can go into examples but understanding the rule is what we want now. Trading programs will all have different aspects of entry and adding. It is up to you now to understand rule two and try and incorporate it into your plans.

I am giving you a rule which not only makes you larger when you are right but keeps you smaller when you are wrong from the start of a position. I am also giving you a way to not over trade. It is up to that you to make sure you are properly funded to make this step an important one in your favor.

Never to over trade was one of the criteria of my rule two. A lot of thought went into rules one and two and it must come out the other side for you in understanding before it will work well. Now you have the background of rule two and can understand it a little better.

Whether we go any further on trying to impress the rule upon the traders depends upon it's acceptance by the traders whom I have complete faith. They shall continue to live up to my expectations and I shall continue to be proud of the faith I have in them.

I say it again and I know for sure! Clothes makes the man in most cases if that man lets it change his thinking and feeling to a point of betterment. Knowledge is your new suit.

ALS - Ok, you are telling the readers that to use rule two properly it will keep them from over trading because their entire position is never in place until they have added the remainder of their initially expected position only after the market has proven the position correct along the journey of the move that they are working with in the trade.

What the traders have failed to see is that in order to correctly use rule two, they never put the entire desired position on until or unless rule two is needed to be used along the way. Am I correct so far?

POP - Yes you are. What other points am I making?

ALS - Your rule two also is protecting from adding to losers and keeping the initial position smaller until proven correct. Is that right?

POP - Not exactly, what I want them to understand about that point is that they will only get bigger when their criteria in their trading program tells them it is time to add. They will not add just because the initial position has been proven correct. When they have completed their adding of additional positions, then and only then should they have their entire expected position established.

Traders are over trading most of the time when they say that they can't seem to justify adding to an existing position. Most of the time a trader does not think about the reason for adding because they have their initial position on from the start. This is their maximum risk from the start. That is never what you want in trading.

You must take some risk but never your maximum. That is exactly what they are doing if they can not plan for added positions along the way.

ALS - It is so obvious now! It is just like playing chess and seeing after the stalemate that you could have won so easily if you had just thought there could have been a stalemate.

POP - Yes, the trader is playing for a stalemate if they don't use rule two in some form somewhere along the way in their trading plan. Isn't it simple? To want to have a correct position from the start is over trading when you place an entire position.

Traders don't add because they have their position. The big drawdown is that when that original initial position is wrong, their losses are as large as there gains seem to be if they were right. We don't want that. Keep in mind that trading is always a losing game unless you change the odds.

With rules one and more so with rule two, you are changing what you can in trading to your advantage. If any position is taken without forethought of adding to it later when it has been a proven correct position, you are in a 50/50 game at best.

ALS - You also said the light should start coming on for the traders. Do you think this is enough to digest or should we continue?

POP - It's time to step back and let them get off the elevator. Let us see how many frowns we still have and if we need to review more on rule two. My faith in the small trader is that they are the best majority of one I could ever want in my class.

I am willing to consider the questions of my little Phantom's. I can do it for a day, and I can do it always? I am trying to make it possible for them to become the best traders they can be. I know that they will grow up faster than they realize. Good luck to them as we see what their new plans become.

ALS - Any lights coming on? Do we understand CORRECTLY yet?

" PRESS YOUR WINNERS CORRECTLY WITHOUT EXCEPTION "
---POP

 

[Fleursdumal]

Continua la rincorsa anche se ieri c'è stata un pò più di prudenza; se si dovesse proseguire nella salita i fondi sarebbero costretti a riprendersi un pò di longs

Daily coffee report
LONDON (January 08 2003) : Robusta futures in London settled higher on late trade buying on Tuesday, inspired by gains in New York.

Benchmark March gained $10.00 to settle at $834.00 a tonne, while second most-active May climbed $9.00 to end at $849.00 a tonne.

Traders felt the market had strong upside potential in the weeks ahead, although stronger rallies seem unlikely as the market is overbought and traders expect the current Vietnamese crop to put further pressure on prices ahead of the local New Year in the next few weeks.

Vietnamese farmers have already harvested more than 80 percent of the crop and are expected to seek cash to grow fresh crops and to finance expenses related to the Lunar New Year Festival.

Arabica futures in New York rallied to two-and-a-half week highs escaping their recent range as funds and commission firms bought.

Origin selling was light.

Benchmark March closed up 2.00 cents per pound at 63.25 cents, while May settled 2.05 cents higher at 65.70 cents.

The back months gained 2.00 to 2.20 cents. Prices were aided by restrained selling from Brazil because the country's currency was trading at its strongest level since mid-September, surging to 3.338 per dollar.

Brazil has less incentive to sell coffee when the currency is strong as this means lower revenues in local money.

The latest Commitment of Traders Report showed that funds reduced their net long position to just 1,450 contracts on December 31 from 2,335 lots the previous week.

Small speculators held a net long position of 6,335 lots, down from 6,775 lots the previous week.

This is in line with expectations and is unlikely to have any impact on prices on Tuesday.

FUNDAMENTALS:

UNITED STATES: According to CSCE, US certified coffee stocks rose by 465 60-kg bags to 2,699,383 bags as of January 3.

There were 58,948 bags pending grading, 32,039 bags were graded and 18,314 bags passed exchange approval, CSCE said.

BRAZIL: Brazil will hold on January 15 the first of the 2003 series of monthly electronic auctions of 20,000 60-kg bags of coffee, official sources said.

The other auctions this year will take place on February 12, March 12, April 16, May 14, June 11, July 16, August 13, September 17, October 16, November 12 and December 10.

The auctions are managed by the federal Banco do Brasil and designed to keep domestic roasters supplied and to rotate official stocks estimated at nearly 6 million bags.

 

[Fleursdumal]

Il KCH03 ripiega sotto i 63cents, mantenendosi nel range 62-64cents : apertura in gapdown subito coperto e tentativo di indirizzare i corsi sui 64cents placcato dai fondi ,intenti a difendere i loro shorts e dalle vendite dei produttori centroamericani, ancora inattivo il Brasile che nn ha grande convenienza a vendere col real forte di questi giorni. c'è cmq fiducia sul mercato tra i floortraders e si notano sui ripieghi acquisti speculativi di nuovi players .

CSCE coffee futures soften in consolidation
NEW YORK (January 09 2003) : CSCE coffee prices settled easier Wednesday, slipping from Tuesday's three-week highs on origin selling mainly out of Central America, dealers said.

"It was consolidation and some origin selling that in the last couple of days has been up at around 64.00 cents," said Hernando De La Roche, a director at Hencorp Coffee Group in Miami.

March arabica coffee fell 0.65 cent to end at 62.85 cents a lb after trading 62.50-63.70 cents.

May lost 0.60 cent to 65.40 cents, with deferred delivery months 0.50 cent weaker to 0.05 cent firmer.

Prices see-sawed on either side of unchanged and speculators supported prices above 62.00 cents with key March coffee making its session low and a double-bottom at 62.50 cents, traders said. Locals traded both sides of the market.

"There is not active buying at these levels, but there are specs coming in the market with strong bids underneath," one New York desk trader said.

"I don't really think we'll go too much lower than here at around 63.00 cents."

De La Roche at Hencorp commented that the selling was more or less from Central America.

"Brazil is quiet now because the real is very strong. They have been out of the market for the last couple of days," he added.

"We are more or less in a range between 62 and 64 cents," De La Roche said.

Coffee sales from Brazil have been minimal this week as the real held near four-month highs, propped by optimism over the new administration of leftist president Luiz Inacio Lula da Silva.

Brazil has less incentive to sell coffee when the currency is strong as this means lower revenues in local terms.

Investors were waiting for concrete actions to back up signals Lula's government will stick to market-friendly policies.

In US industry news, Complete Coffee Coverage said US green coffee roastings fell in the week ending December 21.

Roastings totalled about 370,000 60-kg bags, against 430,000 bags the previous week and 375,000 bags in the corresponding week one year ago.

Cumulative to December 21, roastings totalled about 18,280,000 60-kg bags, compared to 17,995,000 bags the previous year, CCC added.

In London, robusta coffee also eased, with key Liffe March $13 lower at $800 per tonne, while next-active May shed $14 to $815.

Chartists peg support in CSCE March arabica coffee at 62.50 and 62.00 cents, with resistance at 64 and then 64.70 cents.

Estimated volume was 10,376 lots against from Tuesday's count of 7,155 contracts.

Open interest fell 952 lots to 68,571 lots of Januar

 

[Fleursdumal]

articolo di Andrea Luchi preso da www.clubcommodity.com

Entusiasmante 2003

Eccoci qui all’inizio del 2003 a meditare su cosa succederà nei mercati finanziari in generale, e in quelli delle commodities in particolare, in questo nuovo anno.

Il futuro, lasciatemelo dire, appare entusiasmante per i commodity traders.
Infatti, siamo probabilmente all’inizio di un cambiamento che si rivelerà epocale.
Forse non ci avete mai pensato ma ogni periodo storico è stato caratterizzato dal “successo” di un asset rispetto a tutti gli altri. Negli anni settanta, con le borse in crisi nera, le commodities sovraperformarono ogni altro tipo di investimento, raggiungendo il culmine agli inizi degli anni 80 con l’oro che superò gli 800 dollari/oncia per poi iniziare un declino ventennale. Negli anni 80 assistemmo all’ascesa della borsa e del settore immobiliare giapponese, che raggiunsero l’apice alla fine degli anni 80, a cui fece seguito un declino che non sembra ancora vedere la fine. Negli anni 90 il testimone fu preso dalla borsa americana che dette vita ad uno spettacolare “bull market” che ha oscurato ogni altro mercato toro del passato, fino a raggiungere livelli insostenibili da vera e propria bolla speculativa.
Perché parlo di svolta epocale? Perché molto probabilmente l’asset con le migliori performance nei prossimi 5-10 anni saranno le commodities, ovvero le cose reali, che hanno un loro valore intrinseco. In questi anni abbiamo assistito al successo del dollaro che, incurante dei mali dell’economia USA, è stato il rifugio dei capitali provenienti da tutto il mondo in cerca di un riparo sicuro e dei rendimenti allettanti della borsa americana in perenne ascesa. Ma quale è il valore reale del dollaro visto che ormai da oltre 30 anni non è più legato all’oro? Nessuno può stabilirlo con certezza: il suo valore è solo frutto dalla fiducia che in esso riponiamo.
Proprio la necessità di implementare politiche inflazionistiche (per evitare la deflazione che il legame con l’oro avrebbe comportato) portò gli USA a spezzare il legame che legava il dollaro all’oro. E questo portò all’iperinflazione degli anni 70 e alla spettacolare ascesa dell’oro fino ai massimi del 1980. A quel punto gli USA decisero che un po’ d’inflazione andava bene, ma troppa era inaccettabile, e col predecessore di Greenspan, Volcker, gli USA, attraverso l’utilizzo dei tassi d’interesse cominciarono una dura battaglia all’inflazione, che, col tempo fu vinta.
Purtroppo la vittoria dell’inflazione portò a credere che il migliore dei mondi possibili fosse stato raggiunto: borse ai massimi di tutti i tempi, la new economy che avrebbe portato il paradiso in terra agli uomini, la fed che pompava dollari in continuazione per tamponare ogni problema (crisi messicana, crisi russa, crisi asiatica, crisi del LTMC) senza che questo causasse un aumento dei prezzi al consumo. Insomma si cresceva senza inflazione, si spendevano i dollari di cui la fed inondava l’economia USA, i prezzi delle azioni andavano alle stelle insieme a quelli delle case, mentre tutti gli americani (aziende e privati) si indebitavano per poter moltiplicare le loro ricchezze sul mercato azionario e immobiliare.
A questo punto è giunto il brusco risveglio con il crollo delle borse. Per un po’ si è sperato che fosse solo una pausa poi si è cominciato a capire che l’economia non poteva crescere zavorrata com’era da una quantità immensa di debito che non poteva essere ripagato se non a prezzo di una lunga e impopolare deflazione.
Ecco quindi la soluzione, uguale a quella dei primi anni 70: l’inflazione. Attenzione al passaggio decisivo: se si svaluta la moneta (il dollaro), anche il peso dei debiti si svaluta. Una cosa è pagare i debiti con una moneta forte, una cosa è pagarli con una moneta svalutata, che ha perso molto del suo valore: è quasi come usare la carta straccia. Il debitore gongola e il creditore impreca per essere stato pagato con qualcosa che non vale più come ai tempi del prestito.
Questo è quello che faranno gli USA. Per evitare di morire sommersi da una valanga di debiti svaluteranno la loro moneta.
Dite che esagero? Sentite le parole di Mr. Bernanke, uno dei presidenti della Fed: “Gli USA possiedono una tecnologia chiamata stampante (sì proprio la stampante che avete sul tavolo del vostro ufficio, N.d.T.) che ci permetterà di stampare tutti i dollari necessari ad evitare la deflazione”.
Ovvero sono disposti ad inondare il mondo di dollari (causando quindi inflazione) pur di evitare la deflazione incipiente.
Insomma sta succedendo quello che è successo, su altra scala, negli anni 70.
Quale è la conseguenza più immediata di questo cambio epocale di politica economica? Che gli asset reali (commodities) si apprezzeranno rispetto alla “carta”, proprio come 30 anni fa.
Osservate le charts dell’oro e dell’indice CRB….e siamo appena all’inizio! L’oro ha superato i 350 dollari/oncia ed è appena all’inizio della sua corsa. Mi ricordo quando 3/4 anni fa scrivevo sui forum che un regalo garantito per i figli sarebbe stato comprargli un po’ d’oro: scrivevo così perché avevo la certezza che il prezzo sarebbe prima o poi esploso ma non ero sicuro sui tempi.
Probabilmente comprare l’oro non sarà un regalo da lasciare ai figli ma sarà la nostra ricchezza negli anni a venire.
Ricordatevi che dopo 20 anni di mercato orso pochi capiscono il reale valore dell’oro e tutti ne parlano ancora a malavoglia e con diffidenza: è proprio questo il momento di comprare. Quando, tra qualche anno, anche il vostro barbiere vi parlerà dell’oro che ha comprato con i suoi risparmi ecco che sarà giunto il momento di vendere, perché la mania sarà all’apice. Ma fino ad allora tenete duro perché l’occasione è di quelle che capitano una volta per generazione.

Andrea Luchi

08/01/2003