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Thursday, 23 October 2014

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 Indonesia-investments.com:

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

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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
Production
(million metric tons)      23.5  26.5   27.0   25.0
Export
(million metric tons)      16.5  18.1   21.2   21.1
Export
(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.

Indicator Y - Short 2172 On 4pm SAR

With the closing price of 2136 at 1230pm just now on cpo futures 3rd active contract month, the hourly indicator Y will plan to do its stop and reverse buy trade signal once 4pm cpo futures price is last traded 2145 or higher. The short 2172 will have its bearish view being changed to bullish view once the buy signal is triggered at 4pm later today.

Using the hourly indicator Y trading guides, the short 2172 will have to turn long once 4pm is traded 2145 and above.

(Now is more than one hour in advance by giving out the trade signal! It is THREE hours in advance)

Indicator Y - Short 2172 On 1230pm SAR

After cpo futures last traded with high 2139, the hourly indicator Y is facing high probability of turning buy signal sooner than expected. It is still holding on the short 2172 since 10/10/2014 Friday.

Even though the hourly indicator Y may not have its 1230pm stop and reverse buy trade signal being triggered yet, it will have very high chance in believing the hourly indicator Y will turn buy at 4pm later today if cpo futures price can close at high level as given in previous update in the range of 2120 to 2140.

We will give the 4pm stop and reverse buy trade signal ONE hour in advance once there is a clear sign after 1230pm close today.

Protective stop loss order may still be placed at traders' own trading appetite since it is not the main objective to be discussed in this blog other than the stop and reverse trade signals using the hourly indicator Y short term technical trend indicator trading guides.