Noel Campbell
Noel Campbell 		All right, enough about the Sugar market! Well maybe not. A number of weeks back in the Trading Tutors Newsletter I wrote about a potential long trade on the weekly chart for the Sugar Contract. Well the outcome of that trade was an entry and a loss during the week. That’s the way things can go and one certainly shouldn’t let it be a detrimental setback.

Time and Price clusters are the most profitable trading set-ups in my trading. The identification of a time and price set-up gives the highest reward to risk trading opportunities. Trading a time and price set-up is the best way to get closest to the turns in the market and is the next level up from swing trading. David Bowden never made a secret of the fact that time was his most profitable analysis tool. Time when combined with price gives your trading plan and entries dynamite power.

In Chart 1 you can see the recent ABC trade that was ambushed on the weekly chart of the Sugar market. However turning our attention to time and in particular, Time by Degrees, we are now at a potentially important 180-degree pressure date. Looking out 180 degrees from the significant low in February 2004 (5.27) we are at an important time in the market. We should also remember that 90 degrees out from this low in May, the market gave us an important low that provided an excellent profit opportunity on the long side of Sugar. This would imply the market is working in the Square of the Gann Emblem and add emphasis to the 180-degree date here in August.

Chart 1

click chart for more detail

Adding price to the equation I’ll start with a study of ranges. The previous significant bull cycle for Sugar was from June 2002 (4.82) to February 2003 (9.13). Adding this range to the February 2004 low (5.27) the 50% Pressure Point comes out at 7.425. The market powered through this pressure point and we can now look for it to become support.

In Chart 2, we have the same recent action on the daily bar chart for the Sugar market. As you will see by studying the down swings the market just hit the 150% pressure point, which according to the Road Map chart suggests it is time to watch for a change in trend.


Chart 2

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It is an exciting time in the Sugar market. There are some underlying fundamentals that highlight the potential for an increase in the price of Sugar, that relate to the exploding oil price. Sugar use in the production of ethanol is a very topical subject at the moment and should the oil price continue to surge, the debate over the use of ethanol in fuel production will only intensify. I remain confident that 2004 could be a big year for the Sugar market and patience and persistence may prove highly valuable virtues.

Until next week......

Noel Campbell