Providio's Daily Technical Market Comment for 12/5/2011 (Part 4)

[provitrading]

Softs:

Cocoa: 05Dec There is only one thing, actually one number, that we would like to note: 2.94. On a scale of 1-100, this is the measure of overextension in Cocoa. This is the most Oversold we have ever seen any market. Volatility is falling off a cliff. Look at option purchase strategies.
The recently rising Rate of Change tried to ease the selling pressure, but it ended up being more consolidation of losses and has resumed its weakness.
Seasonal Snapshot: Strong tendency to the upside until 15Dec.

Coffee: 05Dec Wide, violent consolidation of September’s losses. Today’s 8cent range follows three out of last four sessions’ +10cent ranges. This month long range has been bound by 220.00-240.00. Our Rate of Change and Momentum are flipping back and forth, waiting for a directional move. However, the falling 200-day Moving Average is detrimental to the health of the market.
Seasonal Snapshot: The 5yr is more pronounced, but all three patterns have a positive bias until 19Dec when choppy consolidation takes over at the beginning of Feb.

Cotton: 05Dec Continued consolidation of losses and not able to sustain a rally, where other physical markets have been. The fact that it’s not Oversold is probably a negative as it gives it that much more room to run to the downside.
Seasonal Snapshot: Moderate upward bias is interrupted by a downdraft in early December, then marches higher until year end.

Sugar: 05Dec March is still struggling with the 24.00 resistance level. Our rising Rate of Change has pulled Momentum positive and points our focus towards how the market acts at this recent resistance area. If it can’t rally, lower tests are again expected. That said, the 200-day moving average (26.60) has been moving decidedly lower for a while and should cap any rallies.
Seasonal Snapshot: The 30yr pattern leads all three higher into Dec.


Disclaimer:
There is risk in trading futures and options. One's financial suitability should be considered carefully before placing any trades. Past performance is not indicative of future results.