Friday, 24 October 2014

Indicator Y - Long 2137 Day 3

We will consider the hourly indicator Y long 2137 on 21/10/2014 as Day One of long, and it is Day 3 now which is believed that the long 2137 will continue its journey of up trend with the stop and reverse sell trade signal far below its long 2137. It will be very painful to see if cpo futures prices tumble down below its long 2137.

This is just a reminder to all technical trend traders following the hourly indicator Y, trend trading will always face with the problem of multiple losing trades when a market has gone into range trading. This year the hourly indicator Y may have less multiple losing trades do not mean that it will have the same next year. When multiple losing trades happen, it will be ugly to see but it is the best time to see also how can a trader handle such a trading pressure! Be frank, all technical trend indicators have such a problem - Multiple Losing Trades.

Thursday, 23 October 2014

Indicator Y - Long 2137 Reached 2182 Targeting 2223!

The high 2182 today is basically the 2% target with 2 points higher at 2180 that being discussed in the previous post before the cpo futures went back down to 2160s level.

The hourly indicator Y will still hold on the long 2137 until market close at 6pm today since the stop and reverse sell trade signal is far below the long 2137.

It is more important to see now where will be the cpo futures price closed at 6pm. Above 2190 will send a very strong signal that the market may go for another new target at 2223 which is about the 4% target from the long 2137 and also the previous high level in the daily chart.

(Again, profit taking targets will be up to traders' own decision and the hourly indicator Y trading guides only shows the stop and reverse trade signal.)

Indicator Y - Long 2137 Hit 1% Eyeing 2

Reaching its first 1% floating profit at 2159, the hourly indicator Y long 2137 can now look at the 2% floating profit at about 2180 (it may or may not reach, it is used as a target only).

There will be no stop and reverse sell trade signal given in this or next few updates since the stop and reverse sell signal is far below the long 2137. Based on the hourly indicator Y trading guides, the losses will be great if cpo futures prices is flushed down below 2137 since the stop and reverse sell signal is very far below the 2137.

Indonesian Palm Oil Reserves Shrinking But Exports Sluggish

Here is the excerpt from Bloomberg News and

Palm oil stockpiles in Indonesia probably slumped last month by the most since February 2013 as a dry spell reduced output in the largest supplier. Futures rose.

Inventories dropped 12 percent from August to 2.2 million metric tons, according to the median of six estimates from planters, traders, analysts and refiners compiled by Bloomberg. Production fell 9.8 percent to 2.3 million tons, the biggest decline this year, the median of five estimates shows.

“The effect from the drought at the start of the year has begun to materialize,” said Hariyanto Wijaya, a Jakarta-based analyst at Mandiri Sekuritas. “The first-quarter dryness, coupled with very dry conditions in September, have really hurt output. Production may have peaked,” he said by phone Oct. 17.

     Sept. 2014 (Survey)   Aug. 2014   Sept. 2013
Output           2.30         2.55        2.40
Stockpiles       2.20         2.50        2.23
Exports          1.70         1.72        1.64
NOTE: Figures are in millions of tons


Crude Palm Oil (CPO) Exports from Indonesia Sluggish on Weak Demand

Indonesian CPO exports to India, the world's largest importer of palm oil, fell 38 percent to 305,000 tons in September month-to-month (m/m). On a year-on-year (y/y) basis, Indonesian CPO exports to India have declined 26 percent to 3.3 million tons in the first nine months of 2014. This large decline is caused by India’s higher import tariffs for CPO, the depreciated rupee currency (versus the US dollar), and India’s high inflation.

Meanwhile, Indonesian CPO exports to China fell 31 percent m/m to 56,000 tons in September 2014, and declined 10 percent y/y to 1.60 million tons in the January-September period. China’s demand for Indonesian palm oil has fallen due to increased difficulty to obtain bank loans as well as the country’s new maximum residue limit standards.

Lastly, Indonesian CPO exports to the Eurozone have fallen 12 percent m/m to 302,000 tons in September 2014.

To end on a positive note, exports to the United States have increased 86 percent m/m to 68,800 tons in September. This is a remarkable development as the US soybean production is optimal thus leading to cheap prices of soybeans.

Indonesian Palm Oil Production and Export:

                                    2011  2012  2013  2014¹
(million metric tons)      23.5  26.5   27.0   25.0
(million metric tons)      16.5  18.1   21.2   21.1
(in USD billion)           20.2  21.6   19.0   18.9
¹ indicates forecast
Sources: Food and Agriculture Organization of the United Nations, Indonesian Palm Oil Producers Association (Gapki) and Indonesian Ministry of Agriculture

Indicator Y - Long 2137 No SAR!

This is the weakness of the hourly indicator Y where the possibility of big losses as mentioned long before (refer to the write-up in the Learning Corner) when there is no stop and reverse trade signal given in the blog, meaning that the cut loss point will be every far from the entry level. For example, the long 2137 may have very low SAR which may be below 2100 and it is just a cut loss point NOT SAR! Therefore, traders may have to sit tight on the roller coaster ride on the cpo futures prices if they are purely based on the stop and reverse trade signals of the hourly indicator Y to be triggered.

Like previous short 2172 where cpo futures prices was traded to high 2192 (just 20 ticks away!!!) and to the low 2104 (just 68 ticks floating profit!!!) before the SAR was triggered by buying 2137 (only get half of the real profit!!!).

Riding on trends need patient and discipline and also good risk management by not over trading! You may have no choice to give up substantial good floating profit by the time of doing stop and reverse trade, and also substantial high losses as trend trader!

Tuesday, 21 October 2014

Indicator Y - Long 2137 At 5pm

After such a long waiting game seeing high 2192 and low 2104 using the hourly indicator Y trading guides, short 2172 had finally given up some good floating profits (which had been mentioned earlier) by taking profit and turning long 2137 at 5pm sharp. It is a profit of 35 ticks on this trade.

The long 2137 will have to cut loss turn sell if cpo futures price is closed below 2113 at 6pm today based on the hourly indicator Y without taking into any consideration of higher high or lower low data.

The accumulated loss of 21 ticks for October month has turned to profit 14 ticks now while its accumulated profits for year 2014 reaching 996 ticks so far based on the hourly indicator Y trading record.

Indicator Y - Short 2172 On 5pm SAR

The 4pm stop and reverse buy trade signal was not triggered since the cpo futures price is last traded below the given level as stated in previous post.

However, the 5pm stop and reverse buy trade signal is now being adjusted much lower near to the current 2130 level, that is, if cpo futures price is last traded 2132 or higher at 5pm, the hourly indicator Y will have to take profit against its short 2172 and turn long at 5pm sharp on short term technical trend trading strategy. This is based on the hourly indicator Y trading guides without considering the higher high or lower low data that may affect the stop and reverse trade signal.