August 23, 2010

Dan Shy
dan.shy@davianletter.com

IN FOCUS:
Trading Outlook for the Week of August 23, 2010

Trading Outlook:
Note: By way of reminder, since the Model Portfolio has only $17,783.01 there will only be 'day trades' at this stage of the game in order to escape the risk of over-leveraged gap opens in the commodity futures markets. As the 'trading sister' model account grows, we will move into 'swing trading'. In addition, I trade according to the methodology outlined in my YouTube series1.

Market #1 October Sugar (SBV0): As I mentioned in the last issue, I was able to find another profitable opportunities to go short within the Sugar market on the 18th. I then mentioned in that update issue ...
Typically, the month of August shows seasonal weakness in Sugar. But we can't say that about the month of August thus far. Even if we were to sink down to .1775 (the present price is .1950) really, all we could say is that Sugar has gone 'channeled', or congested within a broad range in the month of August. Therefore, I'm beginning to back away from my bearish stance. Any short / bearish trades taken in larger accounts would be with a smaller position size if we break lower. - Airelon's Market Tactics 41.5

That eventuality has come to pass. We continued to move higher for the rest of the week closing at .1984, and we never found another profitable opportunity to go short in this market. At this point, the entire bias has broken down, and the seasonal edge has come to an end. So view this as my official 'backing away from the Sugar market' statement. Market #2 October Gold (GCV0, YGV0 for the Mini-Gold or the GLD for the imperfect ETF): I am still hoping to get a pullback in Gold, possibly to the $1,210 region. The reason for this, is that a seasonally strongly bullish
1 Exact Link - http://www.youtube.com/user/AirelonTrading#g/c/61DCBF4BF4E93A0F (Playlist still being created)

August 23, 2010

time is approaching, that typically lasts for a few weeks. So this would provide a wonderful opportunity to massage a 'long bias' as I am apt to do. But I have to see the market pull down to the $1,210 region. I won't chase the market, only to get whipsawed. Either the market conforms to my preestablished trading parameters, or I won't trade it. So at this point, it's just about waiting, watching and observing. There is not a lot in the way of trades at the current time, according to my own methodology. Sometimes, as you've seen throughout the history of this newsletter, it just works out that way. Wheat, Cotton, Coffee and Live Cattle are acting in a completely contra-seasonal manner so that I cannot get a good read on them. Other markets such as Cocoa and Orange Juice I have thoughts regarding, but my methodology is telling me to wait three or four weeks. If you have any questions regarding my personal outlook, or any other comments, please feel free to contact me at dan.shy@davianletter.com. I will say that if you have questions about your own trading and you want to ask for my input? Please include your most recent money management performance statistics in any email correspondence. Until next week, stay safe trade well, and remember that loving other people doesn't cost a dime.
Note: The above statements should not be construed as an investment or trading recommendation. Airelon's Market Tactics is a newsletter that allows subscribers to look 'over my shoulder' as it were, for my own personal specific trading and investing ideas and thoughts for the next week. But they are only thoughts as of the moment of publication, and are subject to change.. Any trades or investments that I discuss within this newsletter are simply my own thoughts regarding my own investing and trading outlook. Remember that entering any market is an individual decision. There is no guarantee that I will enter, or have entered any of the trading or investing ideas that I discuss in this newsletter; as larger accounts may require a different strategy as the ones presented here. This newsletter simply contains my trading and investing thoughts for the next week. I, the author do not grant this work for wide distribution beyond any single individual subscriber as this publication is protected by U.S. And International Copyright laws. All rights reserved. No license is granted to the user except for the user's personal use. No part of this publication or its contents may be copied, downloaded, stored in a retrieval system, further transmitted or otherwise reproduced, stored, disseminated, transferred, or used, in any form or by any means except as permitted under the original subscription agreement or with prior written permission. I personally only enter any market after watching and reading the tape and I trade using money management principles2. The losses in trading can be very real, and depending on the investment vehicle and market, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 14 years of experience in trading and investing in these markets. The Model Portfolio accounts are hypothetical accounts,with all of the inherent problems therein, which are used within this newsletter in an attempt to track the results of this newsletter, and is run for the education of other traders who should make their own decisions based off their own research, due diligence, and tolerance for risk. Any pictures used within this newsletter are believed to be public domain. Any charts that are displayed using the ThinkorSwim platform, and other pictures were obtained through Wikipedia's public domain policy.

2 Exact Link - http://www.youtube.com/user/AirelonTrading#grid/user/D41865A5A41F4283