mar Coffee (update)

I was stopped out of my Long Coffee position today @ 141.75.  There are currently no new buy trades, but will keep watching this market for signs of a bottom.

mar Coffee (update)

It's been a couple weeks since we looked at Coffee.  The COT report still shows commercials near 8+ year bullish extremes.  I think we are seeing signs a bottom is in and is a good time to take a chance at getting long some futures.  The market formed a double bottom pattern today bouncing off an 8 point support trendline and in between MS1 and MS2.  You have bullish divergence on the RSI and a close above the 10 and 20 DMA.  The big key is you finally got a lower low followed by a higher high signalling a change in trend.  Will it be a big change in trend or a minor one? only time will tell, but it's worth taking a risk here.  Got long @ 148.05 (tick above the recent swing high) with stop @ 141.75 below recent low of 141.80.  The risk here is ~ 2362.50.  I will be looking for a big upside move with initial aggressive target near 185.00

mar Copper (update)

Copper was never able to get out of that resistance box and has been selling off since.  I mentioned some possible areas of support and the third one was the charm: around the 3.545 area.  However, this market is now in neutral territory: does it go and retest the recent highs or does it go retest the recent lows?  I will continue to watch for more clues, but on the sidelines now.  Something to keep an eye on though is this market is forming a symmetrical triangle on a weekly chart and looks poised to break out up or down in the next coming weeks.

mini Dow (update)

The December contract expired last Friday and we are now trading March.  Today will be the final post for this contract and we will revisit the March chart a few times to see if it goes to new highs or takes out the recent swing lows first.  Mid last week the market did indeed reach the 78.60 retracement level as expected. However, it met stiff resistance as it was also the MR1 and the 261 ABCD fib extension and has been selling off since.  This area basically closes the book on this pattern as it met it's objective.  It will be interesting to see what takes place from here: new highs or back to test the recent swing lows.

Mar Copper (update)

It's been around 5 days since my last post in Copper.  Over this time, Copper has struggled to move to the upper part of the resistance box.  The downward sloping trendlines seen on the 240M chart has proven to be solid resistance, which isn't surprising given they extend from a Feb '12 and Sept '12 swing high.  The high reached on Dec 12th briefly touched this resistance line in the same area as the MR1 pivot point and the 361/361 fib combo off the primary and supporting ABCD patterns.  Normally you would expect a pullback to around the 61.80% retracement based on this ABCD pattern off the 361/361 price level because of the deep and medium deep retracements.  This signaled a weak uptrend, which should give rise to a decent pullback.  This would call for prices to drop to around 3.53-3.55.  However, the move down off the Dec 12th high has also been weak so far as seen on the 240M chart.  The primary ABCD pattern has a med deep retracement with 6:10 left handed skewing.  The secondary ABCD pattern has a deep retracement with 5:5 neutral skewing.  Both retracements signal a weak down move that should see a good upside pop.  The levels to watch for first are the 261/261, 261/361, and 361/361 fib combos as possible support zones.  They are 3.585, 3.566, and 3.545.  Keep an eye on the downward sloping trendline on the daily chart that was resistance 3 times as it could turn into support if reached.  This could line up nicely with those fib levels.  Finally, there is a monthly pivot @ 3.57 that could come into play.

Mar Copper (update)

Copper hit just below the MR1 yesterday, which coincides with a downward sloping trendline and the 361/361 fib combo of the two main ABCD patterns coming off the 11/9 lows.  There's a very good chance we can see a correction from this area.  However, the bullish nature of the past couple weeks make it a tough market to short and you could see it grind lower before resuming higher.  I would consider scaling out of any long positions up at these prices though.

mini Dow (update)

I exited my last contract today @ 13288, which was the 100% projection of the ABCD pattern off the 11/16 low.  It was nice to see my target hit the day before the FOMC meeting, which could bring some volatile price action tomorrow.  I still see this market making an attempt at the 78.60 area and possibly the recent highs from early October.

mini Dow (update)

This market was able to get through the ECB meeting and unemployment without any weakness.  We are continuing to see strength and I've now moved my stop up to 12904, just below the most recent swing low.  My target on my last contract remains 13288.  Friday's action saw it first new closing high since 11/23 and it looks like it really wants to test that 78.60 area.  However, I do see resistance if we get there this week.  Looking at the 240M chart the dominant ABCD pattern has a shallow retracement with 19:4 skewing, which is very bullish.  It was followed by a supporting ABCD pattern with a neutral retracement and 11:13 skewing, which is neutral.  These two patterns combined project an initial target area between 13288 and 13373.  The upper end of this area near 13373 coincides with the 78.60 retracement level along with MR1 resistance.  I would expect a correction from here, but if not the next target area would be the recent highs near 13600.

Mar Copper (update)

Copper has spent the past 4 days finding sellers in the lower end of my resistance box.  The 240M chart is still currently showing resistance between 3.67 and 3.76.  Let's see how price action plays out this week if it continues to trade in this zone.

Mar Copper (update)

Copper has entered the lower end of my resistance box and just missed the 370.00 level today so I decided to exit @ 367.50.  If I had more than a one lot I would hold one with a trailing stop, but since I only have one I thought it best to exit as I think we could start to face some resistance from current levels up to 375.00.

Copper has some upper resistance approaching based on patterns from the 240M chart.  This recent move up started with the dominant ABCD having a deep retracement and it's secondary ABCD having a medium deep retracement.  This signals a weak uptrend that could have a decent pullback when it hits some fib resistance.  The third supporting ABCD also had a deep retracement.  The 361 fib combo up @ 371.25 is shaping up to be a possible short term trading opportunity on the short side.  This area is supported by a monthly R1 and a downward sloping trendline from a monthly chart.  The one tough part of shorting is the past few days has been very bullish and isn't offering any small local ABCD patterns to cluster in the target zone.  As a result, you may see some sideways action up there so it can shake off its bullish energy.  If it breaks through 372.00, then it could face resistance up at the 78.60 zone @ 375.00.  I think it will be very tough for Copper to move any higher without a correction first.

mini Dow (update)

I decided to exit another contract @ 13015 near the close today.  I've moved my stop on my remaining one lot to 12739 with my target exit @ 13288.  There's alot on tap for tomorrow and Friday (ECB, BOE meetings, unemployment data) so I figured I'd lighten up.  But as far a price action goes we are now above the 10, 20, 50, and 100 DMA and are coming out of that bullish ABCD pattern.  I like prices to test the 78.60 retracement zone up @ 13350, which coincides with monthly R1 resistance.

mini Dow (update)

Thursday price action confirmed a bullish ABCD pattern with shallow retracement and 3:1 right handed skewing.  We also broke the 3pt resistance trendline and closed above the 50 and 100 DMA.  I exited half my position on Friday @ 12986 and moved a stop on my remaining 2 contracts just below the swing low @ 12739.  This bullish ABCD pattern now suggests a conservative upside target of 13288 with more agressive targets of 13373-13615.  I will look to exit 1 @ 13220 and the remainder @ 13349.

Mar Copper (update)

On Thursday, Copper broke the 7 point resistance line and closed above the 50 and 100 DMA.  It stalled right around the 364 mark on Friday, which coincides with a downward sloping trendline.  I mentioned this could be an area of resistance.  I think we could get further upside in this market and I will be looking to exit around the 370 area.  There are pockets of resistance if we clear 364 between 367 and 375.  If we enter this area I will give some analysis for a possible short trade.

Mar Coffee

I gave my analysis on the continuation charts for Coffee, but here's the March futures contract.  Today we got a big bounce higher.  Could this be the start of the bottom? Remember, the commercials have a record long position, which is extremely bullish.  The question is not if, but when the market will have a big upward move.  I think it's sooner than later as I've put on two option trades:
11/14 bought 1 KC Mar 160 C @ 5.40
11/26 bought 2 KC Mar 150-162.50 C spread @ 3,112.50 debit
I'm a novice option trader to say the least so still experimenting, but too hard to buy futures on this trade setup.  I'm exploring options as a way to enter these specific trades as timing is difficult and can take a couple months to capture the big move.  These trades don't occur often, but when they do they can have explosive reversals.  Let's see what happens with this market the next couple months.

Mar Copper (update)

Copper hit resistance around where I figured: just below the 50 & 100 DMA plus the 6 point resistance line (which has now become 7 points).  We are seeing a real choppy move higher off the 11/9 lows, which is a sign of a weak uptrend.  The main obstacle in front is still those two moving averages and the resistance trendline.  If we can break above, then I can see a move to 3.64 for the next resistance zone.

mini Dow (update)

The past few days has seen this market stall just below the 50 and 100 DMA and now there's a 3 point downward sloping resistance line as well.  Today's action saw strong selling early into the previous resistance zone and then a snap back rally.  Old resistance became support.  If we get a break above the recent 12982 high tomorrow, then will we have a bullish ABCD pattern with shallow retracement and 3:1 right handed skewing.  I've pulled my original target 1 offers at 13025 and moved them to 13160.  If this pattern forms in the next 3 days the first upside target will be around 13350.  I would look to get out of another contract at that level.

Coffee (continuation chart)

A market to keep a real close eye on is Coffee.  This market has been selling off hard since the May 2011 highs.  However, according to the COT report the commercials are at record long levels and markets usually bottom when the smart money is at bullish extremes.  The hard part is the timing, which could be days or weeks away.  First, some interesting details supporting possible lows.  The monthly continuation chart shows an upward sloping trendline that has served as support numerous times since the Dec 2001 low.  Prices are getting near this area again.  Also, the RSI is oversold and hasn't been at this level since the 2001 bottom.  Could this be the area this market bounces from?  The weekly continuation chart currently shows a potential double bottom forming with bullish divergence on the RSI.  Finally, seasonally this market tends to bounce early Dec and rally into a May top with dips in Jan and Mar.  It could be too tough to time this market with futures so options might be a better play.  Options aren't my specialty, but I'm currently experimenting with them for COT based trade set-ups like this one.  I've put on a Mar bullish call spread (150-162.50 strikes) and will be looking for other possible trades in both options and futures in the next couple weeks.  I will show analyze the chart on the Mar futures contract this week.

mini Dow (update)

We were able to break through and hold the resistance level ~ 12750.  The only concern is that it was the day before and after Thanksgiving, which were both low volume days.  The upcoming week should give us a more valid indication of this market's recent strength.  First, on the positive side we closed above the 10 and 20 DMA, got a MACD bullish crossover, and broke above a downward sloping RSI trendline.  Second, some upcoming obstacles could be the 50 and 100 DMA, the monthly pivot @ 13185, and the swing high @ 13251.  My first target for exit is 13025, where I will get out of half my position.  My second target is just below the monthly pivot @ 13150, where I will exit one contract.  I will look to ride the final one lot with a trailing stop in case this market makes a run at new highs.

Mar Copper (Update)

OI has moved to the March contract, so we pick up the same pattern as the Dec contract.  New lows were never put in and a wider time range will form if those lows are breached.  Therefore, there are no more buy zone set-ups at lower levels.  However, this market is bouncing off an early support zone.  It wasn't an area I was comfortable buying into so I wanted to either wait for a candlestick pattern to form, see lower prices form by Nov 14th, or play a bounce above the Nov 13th high.  I ended up getting long on Nov 19th a tick above the Nov 13th high ~ 3.5090 with a stop below the recent lows ~ 3.4140.  Our initial target is the 78.60 retracement area ~ 3.755.  This buy set-up follows the logic that Copper traded into the first buy zone, but it wasn't supported by other indicators yet.  My ideal choice was to buy at lower prices, but after a few days of trading sideways and not making new lows caused some other supporting indicators to form.  These other indicators are: bullish crossover on the MACD, a bullish engulfing pattern, and a close above the 10 and 20 DMA.  Our first obstacle will be the 6pt downward sloping trendline that lines up with the 50 and 100 DMA.  I expect selling at this level.

mini Dow (update)

My long position had a nice follow through day after my entry, but stalled two days in a row at the resistance zone I mentioned the other day ~ 12750.  It will be interesting to see if we can break through this level or if we get a retracement instead.  I wouldn't be surprised to see a pullback.  It will be important for any pullback to be shallow otherwise a strong possibility of a retest of the lows exists.  Good news is we closed above the 10 DMA and we are closing in on a bullish crossover on the MACD.

Mini Dow

A similar pattern has been emerging in the mini DJIA as the mini S&P, but with a long signal activated tonight.  Therefore, I will move my analysis over to this market.  Similar setup with a weak downtrending market into a support zone.  You have the dominant structure a double top, followed by a secondary structure with a deep retracement, followed by two more supporting structures with medium deep and supershallow retracements.  The time frames have been getting smaller as well indicating a possible loss of downside momentum.  This move touched the 361/361 fib combination of the dominant and secondary structures, which is a possible buy zone if confirmed with other indicators.  In this zone we also had a monthly S2, and oversold RSI, and some old support levels.  Finally, we had a bullish engulfing candle pattern for on Friday.  I went long a tick above the high of this candle @ 12574.  This triggered two different buy setups.  First, I'm long 2 on the bullish engulfing pattern with stops @ 12433 (low of candle).  Second, I'm long 2 more on a superstructure trade.  Stop 1 is @ 12300 and stop 2 @ 12200.  I'm looking for a bounce to at least 13025.  Obstacles to this trade are it could move lower and test better support around the 78.60 retracement level @ 12274, which is another support zone at the 461/361 fib combo.  MACD stills shows bearish momentum.  We need to see a bullish crossover to feel better about the long position.  However, this is a lagging indicator and usually comes a few days after the bottom.  Finally, we have a potential strong resistance cluster ~ 12750, which includes the monthly S1.

Copper (update)

It's time to take another look at Dec Copper.  One thing to mention is Copper OI has moved to the March '13 contract, but will still look at Dec for now.  The Mar contract looks pretty much the same pattern wise.  The past few days have traded sideways creating a bigger time range the the most recent supporting structure.  Therefore, that one has been removed.  For this pattern to remain in tact we need to see new lows tomorrow or Friday to avoid creating a wider time range than the secondary supporting structre (shown on the chart as m deep and 3:1).  You are seeing continued RSI bullish divergence and a possible MACD bullish crossover looming soon.  I'd like to see some new lows and an attempt to get down to the BUY ZONE listed for a long entry.  I will also be looking for any candlestick patterns that may form in the next few days if we can't get down to my ideal level ~ 3.33.

mini S&P 500 (update)

The ESZ2 contract touched the buy zone 1 area today and formed another supporting structure in the process.  This latest one had a supershallow retracement with right handed skewing, which is not what you'd like to see when trying to fade the sell off.  Currently, there's still too much downside momentum to take a chance at getting long in this zone.  However, I wouldn't be surprised to see a bounce here as you have a cluster of 3 fib extensions combined with the monthly S2.  The RSI is reaching oversold territory, but the MACD still has bearish momentum.  I will be looking to enter long positions in zone 2 and zone 3 with stops below the 78% retracement around 1290.00.  A weak downward move like this will have a conservative bounce target of the 61-78 pct retracement back to the previous high with an aggressive target of new highs.

mini S&P 500

There's a potential buying opportunity in the ESZ2 contract.  The current downward move from the 9-14 high has been very weak.  The dominant structure was a double top, 2nd level supporting structure with a deep retracement, followed by 3rd and 4th level supporting structures with neutral deep and double top retracements.  Weak downward moves can create very good buying opportunities around fib extension combos (261s, 361s, etc).  The first buy zone is 1347-1356.  This is the 261 combo zone supported by a monthly S2 pivot.  The second buy zone is 1325-1333, followed by the third buy zone of 1302-1313.  I don't expect this market to trade below 1290.00.  The most recent move down from the 11-7 high @ 1431.75 has been strong.  This is preventing me from buying at zone 1.  I 'm going to play it more conservatively and look to get long near buy zone 2.  I'd like to see some signs of this latest move weakening into my target area.  Some other factors to mention: longer term chart looks bullish as long as the swing low of 1250 holds, the RSI has a downward sloping trendline that needs to be broken for this market to rally, we are looking for a bullish MACD crossover, and finally this market is in a seasonal bullish time.  This market typically rallies mid Oct into year end.  To recap, I see 3 possible areas for this market to bounce to retest recent highs.

Copper

The Copper market looks to be setting up for a potential buying opportunity.  The current downward move off the 9-19 high has been weak.  The dominant structure had a deep retracement with left handed skewing of 4:9 followed by a supporting structure with a medium deep retracement.  Retracements less than 50 percent are considered weak.  You can look for a bounce at the fib combinations of 261-261, 361-261, 361-361, etc.  Right now the area I'm looking to get long is in the 3.31-3.34 zone.  This is the 361-361 combination from the dominant and supporting structures.  There is also additional fib extensions from the 3rd and 4th level structures (supershallow and deep, respectively).  Another sign of slowing momentum is that the structures time ranges are getting smaller.  First one is 13 bars, second one is 4, third is 4, fourth is 2.  The first area for a possible bounce is at the 78% area of 3.386.  At this level you also have a monthly S1 pivot, a 361-261 fib combo, and a 4 point upward sloping trendline.  I'm looking to play this more conservatively and try to buy a little lower.  You have slight bullish divergence on the RSI, but the MACD has yet to give it's bullish crossover.  However, this often happens a few bars after the market bottoms.  I will be paying attention to the first area of support to see if any candlestick patterns form.  If so, I may enter early.  Finally, an important note is the copper market seasonally posts a late November to mid December yearly bottom that rallies into late April.  So, in summary you have a weak downtrending market that is providing buy signals near a time when it seasonally bottoms. 

Swiss Franc (Update)

I was out of town last week so sorry for the late update.  I got stopped out of my long position on November 2nd.  The 7 point upward sloping trendline was broken firmly and the market is now below all 4 moving averages.  It looks like the double top formation I mentioned earlier as a possible concern was triggered the other day.  The target is around 1.0367, which is a possible area for a bounce.  We will revisit this market as this pattern plays out.

Dec Swiss Franc (position entered)

My long position was triggered today with a move above the doji high @ 1.0722.  The past two days, though quiet due to the storm, found support at the upward sloping trendline.  This trendline has now shown support 7 times.  We also were able to get a close above the 10 and 20 DMA.  Lets see if we can get some follow through to the upside.

Dec Swiss Franc

There's a potential low risk, high reward trade setup in the SFZ12 contract. This market broke out and created a measured move on 10/17 with a supershallow retracement and neutral skewing.  However, the move off the swing low on 10/1 to 10/17 had a very deep retracement which weakened the breakout.  As a result we would expect to see a pullback, which could present a buying opportunity.  The setup is to buy around the 38/78% retracement area, which was touched on Friday.  This level touched an upward sloping trendline that has held 5 times, is just above the 50 and 100 DMA, and above the monthly pivot.  The MACD is still above the zero line and the RSI is in neutral territory.  Finally, a doji formed giving us more confirmation of a possible bounce.  The trigger to enter will be buying 2 above the high of the doji @ 1.0722.  The first stop loss will be below the low of the doji @ 1.065 and the second stop loss will be below the swing low @ 1.0608.  We will look to exit one ~ 1.09 and the second ~ 1.10.  We will be risking 2325 to make 5700 for a reward/risk ratio of 2.45.  Potential obstacles are seasonally it's a weak period until late November, it has to close back above it's 10 and 20 DMA, and this market could in the process of forming a double top if you get a close below the neckline of 1.0608.  At that point we would be stopped out of our long trade.  Let's see how this plays out next week.