IS IT TIME TO GET READY FOR A SUGAR HIGH?
April 22, 2019
There is significant risk involved in trading futures and/or options on futures. Futures and/or options of futures trading may not be suitable for all investors. Investors should consider these risks and evaluate their suitability based on their financial conditions. Past performance is not indicative of future results.
The long range outlook for July Sugar is worth examining. The fundamentals impacting the market are pretty well known and for the most part considered bullish.
On a daily basis Sugar is going to be influenced by the fluctuations of the Brazilian Real
Strength or weakness in ethanol demand, especially in Brazil as it competes with Sugar
The upcoming growing season in India
I like to take that market attitude and compare it with what our in house very sterile math model is suggesting. So what is the model telling us?
Long term trend is higher and will require a Friday close at or below 1140 to reverse to negative
The underlying strength is improving as it will take a 14% decline to reverse the trend compared to 8% a week prior.
Our in house model also shows both Positive and Negative indicators with the First Standard Deviation of the 191 week average with advantage the Positive indicator.
There is a definite divergence between the two indicators
This divergence while no absolute guarantee does suggest a high possibility of a stronger upside move.
So what do I suggest based upon our model?
Buying at about 1250 would be wonderful, but perhaps wishful thinking.
For the aggressive trader willing to take an extra 16 point risk think about buying at 1281 otherwise look to buy at 1265
I am suggesting a 1242 stop
If you have any questions or comments give me, Lee Gaus a call at 1-877-304-1369, email at lee@efggrp.com. Look forward to hearing from you.
The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.