David Fuller's view

Nasdaq 100 Index in-the-money hedge short stop triggered Coffee Robusta long opened.

Following my short of the Nasdaq 100 Index (weekly & daily), via the March contract at 3508.4 on Monday morning Feb 3^rd, I lowered my trailing stop to 3450 this morning, as it was ranging in the 3439-3440 region this morning after yesterday’s sharp fall.  This was triggered at 3450 around 2pm on Tuesday 4^th February.  The short sale price and covering price include all spread-bet dealing costs. 

Short-term Stochastic indicators are quite oversold for US indices right now.  However, this can mean either nothing in a dark mood for the market or it can trigger a bounce if there is a reasonable amount of two-way activity in the next few days.  I do not think the correction is over and I am likely open another short in the event of a further bounce.

Eoin and I have been watching the Robusta and Arabica coffee contracts closely since last November when they became so oversold.  However, with the corporate changeover and challenges in sorting out the Library we did very little personal trading at the time, although I am sure coffee was mentioned a few times in the Audios, along with sugar more recently, for which I finally opened a long yesterday.  This afternoon I bought some Robusta coffee because it was experiencing a small pullback today but looks to have consolidated initial gains and is back above its 200-day MA.  It also has a backwardation, indicating that supplies are tight in the nearby contracts.  I paid 1821 for the March contract, including spread-bet dealing costs.

I also placed a tight, slightly in-the-money stop to reduce risk in my sugar long because it has risen quickly, albeit from a very oversold level, and this rally will spill over into a consolidation and right-hand base extension at some point.