Sugar

Sugar was able to finish out the week with a strong close @ 18.87, which was above the 50 WMA.  This was the first close above the moving average in over a year.  The high of the day was 18.95, one tick above resistance zone #5, and closed inside the 18.71 to 18.94 zone.  I wouldn't be surprised to see a pullback from these levels and the recent upside move is a bit overbought.  Let's see if resistance zone #5 causes some weakness this week or if the recent bullish action is to much to contain it.

Finally, recapping my original Sugar post from early September:
* we have met the first 2 of 3 short term objectives with only the 19.38 level remaining
* we are still looking for a long term objective of around 20.25-20.75

I will follow up at the end of this week to show how Sugar at it's current resistance zone and then take some time off from this market.  I will give more updates if it approaches it's long term target area.

Sugar

Today's high of 18.76 hit the lower end of resistance area #5: 18.71-18.94.  It was a bullish day as it had a nice long body with a strong close near its high.  I do expect prices to find resistance in this zone.  It could be temporary though as we have seen great strength coming into this level the last two weeks.  However, let's remember we haven't had a weekly close above its 50 WMA since July 2012.  Let's see where we close out the week tomorrow.  The 50 week is around 18.74.

DJIA futures continuation chart

There is a potential double top pattern forming on the weekly DJIA futures continuation chart shown below.  We need a weekly close below 14740 for this pattern to be confirmed.  The pattern objective would be around 13858 with a potential stop around 15375. 

First, some supporting background on the monthly chart.  The most recent high of 15658 was right in the middle of a fib cluster based on 3 ABCD patterns.  The dominant pattern dates back to a late 2010 activation.  So we are seeing the current high being formed in an area of potential significant resistance.  There is also some bearish divergence seen on the monthly RSI.

Second, some supporting background on the weekly chart.  We've seen the market recently make its third new high since May, but barely moving much higher than the previous highs.  As a result, we also see bearish divergence on the weekly RSI.  This shows a slowing of upside momentum.  Finally, the most recent high of 15658 was made on a weekly shooting star pattern.  We have since seen selling pressure the past week and a half. 

Let's see if this double top pattern gets confirmation in the next week or two.  If so, then the objective of 13858 should be reached.

Sugar

Monday saw buyers come in and nearly gain back all of Friday's big loss helping gain back bullish momentum.  Today we saw some follow through to the upside making new highs and reaching the 4 resistance area mentioned earlier (18.27-18.30).  This zone contained the sym triangle objective @ 18.27.  It's now time to set up our next resistance area.

Resistance area #5:  18.71-18.94
This level should provide some stiff resistance as there is a confluence of fib retracements, a 361 fib extension, and the 50 WMA.  We haven't had a weekly close above the 50 WMA since July of 2012.

Let's see how the market reacts if it reaches this area in the next week or two.

Sugar

The rest of the week saw Sugar reach the 3rd resistance area I mentioned @ 18.14 and just missed touching the 4th resistance area @ 18.27-18.30.  The high for this week happened on Thursday and was 18.24.  Friday saw significant selling down around 50 cents and registering a bearish candle.  On the daily chart we still have closing prices above the 20 and 50 DMA, but as of Thursday we had been above the 10 and 100 DMA as well.  We are still seeing higher highs and higher lows, but Friday's action puts the recent up move from bullish to neutral in my opinion.  If we take out the recent swing low of 17.35, then it moves from neutral to bearish.

Sugar

Monday's price action brought 1st area downside support and 1st area upside resistance into play:
* 1st area support is at the rising window (gap), the MR1, and the 10 DMA: 17.51-17.54
* 1st area resistance continues to be the current resistance, which is the 20 WMA and 100 DMA
The low of the day was 17.52, then rallied and closed on its highs of the day @ 17.81.  This was above the 1st area resistance.

Today's price action brought 2nd level upside resistance into play:
* 2nd area resistance is the 361 fib projection from the dominant ABCD pattern: 17.96.
The high of the day was 17.96, with a close near its highs @ 17.93.

Price action is continuing to be bullish and looks poised to test the next upside resistance levels:
* 3rd area is the MR2: 18.14
* 4th area is around the sym tri objective and the 461 fib projection: 18.27-18.30

Sugar

Thursday saw a strong close, after it's gap up open, closing at its highs.  Friday's action saw higher prices on selling with a close just at the 20 WMA and 100 DMA.  This area once again served as resistance with prices closing in the area for the 2nd consecutive week.

Downside support:
* 1st area is at the rising window (gap), the MR1, and the 10 DMA: 17.51-17.54
* 2nd area is at the recent swing low (doji candle) and the 20 & 50 DMA: 17.35-17.43
If we take both of these levels out, then the recent bullish action turns neutral to bearish.

Upside resistance:
* 1st area continues to be the current resistance, which is the 20 WMA and 100 DMA
* 2nd area is the 361 fib projection from the dominant ABCD pattern: 17.96
* 3rd area is the MR2: 18.14
* 4th area is around the sym tri objective and the 461 fib projection: 18.27-18.30
We'd like to see some of these areas taken out in the next 2 weeks to keep the recent bounce intact.  The big picture pattern based off the weekly chart implies a potential bounce to 20.50 and possibly higher.  We have some major upside resistance to deal with, but it's very possible we're on our way to higher prices.

Sugar

Recap where we left off after Sept 14th's post:
*Bulls want to see either a close above the 20 WMA and 100 DMA or support on any breaks around 17.30-17.43 (10 WMA along with 10, 20, and 50 DMA).
*Bears want to see prices close below that 17.30-17.43 area, which will set up a move to test that 16.70 low.

Update:
We saw this market pull back from the 17.71 resistance level over the next 3 days and it found support in the 17.30-17.43 area as shown on the daily chart.  Yesterday's trading saw a doji candle form right in this support area closing above the 10, 20, and 50 DMA.

The attached charts were taken early this morning, so it contains the overnight action in Sugar.  We saw a gap up opening from this support area, which is very bullish.  We are looking more likely to make another run at that 17.71 resistance level.  Let's see if we can close above it this week.

Sugar

In my last post I mentioned the next big hurdle for the Sugar market was:
* to get a close above the 20 WMA, currently around 17.70, which would be the first since 9/30 of 2012 (highlighted in dark blue)

Well, the 20 WMA officially closed @ 17.71 and the weekly close for Sugar was 17.68.  It met expected resistance at this level and closed below.  This area also coincides with the 100 DMA @ 17.73.  It will be interesting to see what this market does next week.  Will it break through this resistance or retrace back?

Bulls want to see either a close above the 20 WMA and 100 DMA or support on any breaks around 17.30-17.43 (10 WMA along with 10, 20, and 50 DMA).

Bears want to see prices close below that 17.30-17.43 area, which will set up a move to test that 16.70 low.

Weekly Chart:

Daily Chart:

Sugar

Here's the chart:

Sugar

Sugar looks poised for a nice bounce when looking at the weekly chart of the March 2014 contract. The current downtrend off last October's highs has found support at the 361/261 fib combo of the dominating and 1st level supporting ABCD patterns. The dominating ABCD had a deep retracement with slightly left handed skewing (8:9). The 1st level supporting ABCD had medium deep retracement with left handed skewing (3:8). These two combine to form a weak moving downtrend that could create a rally that retraces between 50 and 61 pct of the move down. That puts the long term target between 20.50 and 21.50. However, that is a longer term view.

Shorter term objectives include:
* 18.28, the sym triangle pattern obj
* 18.70-19.00, the fib cluster of resistance along with the 50 WMA
* 19.38, the 261 fib projection of the potential ABCD pattern forming off the recent lows

Some potential clues a short term to medium term bottom is in place:
* support @ 361/261 fib combo as mentioned above
* 2nd level and 3rd level 361 fib projections in the same area as the major 361/261 cluster
* decreasing time of ABCD patterns shows loss of momentum (bars: 17, 11, 11, 6)
* oversold RSI @ the 7/14 bottom
* failure to take out the 7/14 low on the recent retest
* close above the 10 WMA
* confirmation of a sym tri reversal pattern
* seasonal strength from late Sep to early Nov

Next big hurdle:
* to get a close above the 20 WMA, currently around 17.70, which would be the first since 9/30 of 2012 (highlighted in dark blue)

Chart to follow later.

Crude Oil

The July Crude Oil chart is starting to look a bit interesting.  We have prices above the 10, 20, 50, and 100 weekly and daily moving averages.  We have a potentially bullish ABCD pattern forming with a move above 97.39.  The current retracement on this potential pattern is less than 50%, which is bullish.  If we can break above that level in the next couple days, then we would also have right handed skewing (7 bars down and less than 7 bars back up).  This would indicate bullish momentum.  Our big obstacles in the way of higher prices are some downward sloping trendlines seen both on the weekly and daily charts.  The daily chart shows this to be a 5 point resistance line.  Will this area be another selling zone in Crude OR will a break above combined with the ABCD pattern be the fuel needed to drive prices higher.  The conservative target of this upside breakout would be 103.62.

British Pound

The Pound was unable to find support between 1.5370 and 1.5410.  Prices have now reached back down to the H&S bottom breakout neckline.  Market action has now negated the earlier patterns and was only able to reach it's conservative target.  The current outlook has shifted to neutral with a downward bias.

Sugar

Sugar prices held for one day at it's 78.60 level and has since continued to sell off.  There are some support areas lower and I will continue to monitor this market for a potential seasonal bottom.  I would become very interested if prices drop in the 15.00-16.00 range.

Sugar

Sugar was unable to see any follow through after confirming the double bottom pattern.  We have seen weakness the past 3 days and have close below all 4 moving averages (10,20,50,100).  The recent swing low is still holding, but this market is showing signs of moving lower.  The next support level to watch is @ 17.33, which is the 78.60% retracement level.  The MS1 is just below it and could hold as support again.  If we put in a new low, then we will look for new signs of a bottom.

British Pound

Prices have been drifting sideways the past few days since the recent high on 5/1 with heavy selling today.  We are very close to a possible support zone between 1.5370 and 1.5410.  There is a heavy confluence of fib support along with a recent swing high, the 20 and 50 DMA, the monthly pivot, and an upward sloping trendline.  It will be interesting to see if this area holds and bounces higher or if we get a bigger downward move.

Sugar

A double bottom pattern was confirmed today in July Sugar with it's close of 17.81 above it's neckline of 17.74.  The next key area to close above will be 17.97.  It is a previous swing high along with a MR1 and 50 DMA in the same zone.  I expect to get stall briefly in this area before making a run at the double bottom objective ~ 18.28.  I believe that resistance zone I mentioned will become a key area where bulls and bears battle it out.  Will the rally stall and resume the strong downward trend that's been in place? Or will the bulls be able to bust through and make a run at the next swing high of 19.00?  Keep in mind that Sugar tends to make a seasonal bottom this time of year.  Stay tuned.

Sugar

Sugar is a market to pay attention to this month as it normally makes a seasonal low ~ June.  However, it can come a bit early (May) or a little later (July).  If you take a look at the weekly chart (left hand side below), you can see this market has been in a downtrend since the October 2011 top.  This move is controlled by its dominating ABCD pattern, which has a deep retracement and 14:8 right handed skewing.  The secondary ABCD pattern has a medium deep retracement and 5:5 neutral skewing.  These two combined are considered a weak downtrend that can see a favorable bounce once the market reaches a solid support zone.  A few possible areas are the 261/261 and 361/261 fib combinations based off these two ABCD patterns.  The market has touched and traded slightly below the 261/261 zone.  This is the first area for a possible bounce that we will analyze today.

Bullish signals:
Weekly RSI divergence
Daily RSI divergence
Potential Double bottom forming (need close above 17.74 swing high)
Support from MS1 pivot
COT: commercials @ 8+ year longs
COT: large traders @ 8+ year shorts

Upside roadblocks:
8 point downward trendline resistance on monthly continuation chart (becomes bullish if closes above)
Current pattern of lower lows and lower highs (becomes bullish with double bottom formation)
MR1 pivot @ 18.01
50 DMA @ 17.96
10 WMA @ 17.93
Overall weakness in the commodity sector

If we get a double bottom confirmation, then it's target will be around 18.28.  This area coincides with a potentially strong resistance zone, which is shown on the daily chart below (righ hand side).  The MR2 pivot is also in this area along with a confluence of Fib resistance, the 100 DMA, and the 50 WMA.

British Pound

The head & shoulder bottom objective was reached today and closed right near the MR2 for the second day in a row.  We've also closed above the 100 DMA for the past 3 days, which is a bullish sign.  We have now reached my first two price targets (conservative and moderate).  The only one left is the aggressive target of 1.5637, which is the 261 fib projection of the dominant ABCD pattern.  If we surpass that level, then I will start to monitor higher areas for possible resistance.

British Pound

The Pound did indeed find support in the 1.5150-1.5190 zone I mentioned a few days ago.  The low of the day on 4/23 was 1.5192.  The market reacted favorably to the GDP figures today and broke above the recent swing high set on 4/11.  You now have back to back ABCD patterns with higher highs and higher lows.  Today's high of 1.5477 was just above the conservative target I mentioned back on 4/6 and closed just below it's 100 DMA.  This moving average could provide some brief resistance along with the MR2 @ 1.5517.  Don't forget we are very near our H&S bottom target ~ 1.5546.  If we can clear above these levels, then your next target area is the 1.5637 to 1.5752 zone.  This area is the 261/261 target of the two ABCD patterns.

Continuous Commodity Index

The ICE has delisted the CCI Index Futures Contracts, so I can't continue this analysis. 

Continuous Commodity Index

Let's take another look at this market.  We've seen some increased selling this week after a pause last week.  It's looking more likely to test that 78.60% area @ 522.903.  I still believe we will go even lower and possibly test the recent lows near 502.28. 

British Pound

The British Pound met some resistance around the 38% retracement area and has sold off the past few days.  Today's price action was bearish with a close back below all the moving averages (10, 20, 50 ,100).  There is potential for support and a bounce around the 1.5150-1.5190 zone.  This area has a confluence of fib support and two intersecting support trendlines.  Let's watch price action in this area.  If it blows through, then you can expect a test of the recent lows. 

Continuous Commodity Index

It looks to me like the commodity markets have more downside action ahead according to the CCI weekly chart.  Since it's Sept 2012 high, this market has been making lower highs and lower lows.  This 6 month downtrend has seen 3 ABCD patterns:
* Pattern 1 has a shallow retracement with 4:4 neutral skewing: BEARISH
* Pattern 2 has a deep retracement with 4:3 right handed skewing: BULLISH
* Pattern 3 has a neutral retracement with a 1:3 left handed skewing: NEUTRAL
The dominant pattern is #1 and sets the tone, which is Bearish.  I'm expecting this move to test the 78% retracement zone @ 522.903 and possibly a bit lower.  I think this downtrend finds support somewhere between 502.50 and 523 as the downtrend has been weakening.  If we get closer to this area I will give more analysis on possible areas for a bounce, which would affect numerous commodity markets. 
Stay tuned!

British Pound

It's been about a week since my last post on this market so let me give another update:
First, we saw prices break down and close below the 10 and 20 DMA on Tuesday with a bearish candle.  It looked as though the H&S pattern was in trouble and prices were going to try and test recent lows.  However, on Thursday following the BOE meeting we saw prices bounce off their lows, rally, and close near their highs creating a very bullish candle.  This brought us back above the 10 and 20 DMA along with creating a potential ABCD pattern.
Second, Friday's price action indeed confirmed an ABCD pattern with neutral retracement and a very bullish 7:1 right hand skew on the breakout.  The skewing confirms bullish momentum as it took 7 bars from it's swing high to swing low and only one bar to break out and create the ABCD pattern.  This changes some of the upside price targets.
Third, we got a close above the 50 DMA for the first time since January 10th and closed right on the 10 WMA.
Finally, some upside price targets:
Conservative:  the 100% projection of the ABCD pattern ~ 1.5464
Moderate:   the H&S objective ~ 1.5545 alongside the 100 DMA ~ 1.5531 and 20 WMA ~ 1.5521
Aggressive:  the 261% extension of the ABCD pattern ~ 1.5637

British Pound

It's been a few days since my last post so let's take another look at the British Pound June futures.  We saw 3 days of selling followed by a bounce back up today.  The current short term uptrend is still in place and today's close got us back above the 10 and 20 DMA.  If we take out the recent 3-25 swing high of 1.5260, then we will have back to back ABCD patterns with higher highs and higher lows.  The next target area will be 1.5400.

British Pound

The head & shoulders bottom pattern got confirmation today with a close above the neckline.  We also got a close above the 20 DMA yesterday for the first time since January 10th.  Let's see if we can get follow through next week or if the bearish momentum returns.  One other piece of supporting data that I forgot to mention on Wednesday for some upside action comes from the COT data.  Commercials are approaching extreme longs, which is bullish.  Small traders are at 8+ year shorts, which is bullish.  Another thing worth mentioning is that large traders are a record net long the Dollar Index, which is bearish.  The Dollar Index has been on a nice rally the past month and a half.  We could see some dollar weakness the next week or two, which could be good for some of the other currencies like the Pound.

British Pound

The British Pound could see a correction bounce in the days and week ahead.  This market has gotten crushed since the start of 2013.  There is fundamental factors at play here, but the technicals are lining up for a possible bounce. 
First, a potential head and shouders bottom is forming with a close above the neckline needed to confirm this pattern.  A close above 1.5181 should do it. 
Second, the market is in oversold territory and shows bullish divergence on the RSI.  You also have a bullish crossover on the MACD.
Third, an engulfing candlestick pattern formed on the weekly chart, a hammer on the daily chart, and an engulfing on the daily chart.  All formed at the monthly S1 pivot.
Fourth, you had a bullish ABCD pattern form today with shallow retracement and right handed skewing. 
Fifth, you saw a close above the 10 DMA 5 days back and it's held since.  Next up is to close above the 20 DMA, which has been resistance the past few days.  It hasn't been above since early January.

Targets: the H&S objective is around 1.5550, which coincides with the 361 fib extension off the ABCD pattern and the 100 DMA.  First resistance should be around 1.5390, which is the 261 fib extension of the ABCD pattern and the 50 DMA.

mar Coffee (update)

Coffee has been in a steady decline since just missing it's symmetrical triangle pattern objective back on January 18th.  It was able to post new lows today thus voiding my earlier call for a potential bottom and those options expire tomorrow out of the money.  There are some good potential trades shaping up in other markets that I will be keeping an eye on for possible posts.  They include: Wheat, Copper, T-Note, and the Australian Dollar.

mar Copper (update)

Prices broke out to the upside today stopping just shy of the Jan 2nd high.  I think this market breaks this level too and goes for the Sept 19th swing high next.  If we can keep these current gains by week's end, then you will have a confirmed break of both downward sloping resistance lines.  That should help drive prices higher in the upcoming weeks ahead.

mar Copper

March Copper has been consolidating since mid October.  It has seen higher lows and lower highs on the weekly chart with some significant support and resistance trendlines with 5 to 8 touches.  Currently, we are above the 10, 20, 50, and 100 WMA heading into mid week.  It will be interesting to see if Copper finally breaks through the downward sloping resistance lines or through the upward sloping support lines.  I'd say there are more clues pointing to possible upside breakout as it's in a seasonally strong period, housing data has been strong, and the daily chart has been showing higher highs and higher lows.  We have the Fed tomorrow and unemployment on Friday.  This could be an interesting finish to the week in Copper.

mar Coffee (update)

March Coffee fell just 0.75 cents short of reaching the resistance zone 1 area on Jan 18th.  Since then it has sold off pretty hard closing below the 10, 20, 50 DMA once again.  This market looks poised to test recent lows once again.  However, there is one last line of potential support before it does that- the 78.60 fib retracement ~ 144.80.

mar Coffee (update)

Coffee is closing in on it's symmetrical triangle pattern target near 159.40.  However, you could see some resistance near it between 158.75 to 161.20.  Besides the triangle pattern objective, you have the 100 DMA, the MR2 pivot, previous pivot lows that were once support, and some fib resistance as well.  If it breaks through this resistance zone 1, then you have stronger resistance between 163.00 and 167.00.

Also, I just wanted to show an updated chart I showed on November 27th.  It was my first mention of this Coffee market.  Prices on the monthly continuation chart came very close to the upward sloping trendline thats been in place since December 2001 before bouncing higher.  You can see bullish divergence on the RSI and a loss of downside momentum on the MACD.  On the weekly chart, you can see we moved a little lower from that November posting as this market grinded sideways a bit to shake off the remaining bearishness.  Finally, you can see the market tug of war battle between the bulls and bears in the candle formed at it's lows.  You can see long shadows on the top and bottom with a small body, which represents some indecision.  This market still has upside challenges to face and there's no guarantee we won't see further weakness.  However, we are finally seeing some bullish characteristics enter this market as we approach a seasonally strong period starting in February and I strongly believe a temporary bottom was put in place.

mar Coffee (update)

Price action today confirmed a symmetrical triangle pattern and was able to close above the 50 DMA for the first time since early October.  It also closed above the 10 WMA for the first time since late September.  We are finally starting to see confirmation of buyers entering this market.  The symmetrical triangle pattern's objective is ~ 159.40 with stops @ 144.85.  I didn't enter this trade, but still holding on to my option positions as I'm looking for a possible upside move to the 180-185 area.  Lastly, from a seasonal perspective we can see price strength from October through May with dips in November, January, and March.  We haven't seen any strength in this market for some time, but it certainly is a good sign of a potential bottom forming during a seasonally strong period.

mar Coffee (update)

mar Coffee (update)

Coffee is forming a potential symmetrical triangle pattern that looks poised to break out tomorrow.  Today we closed above the 10 and 20 DMA for the second consecutive day.  The next key level to close above is the 50 DMA near 152.00.  It hasn't closed above this MA since 10/4/12.  The target on this pattern is around 159.50.  If those options positions I'm holding are going to make any money, then this market needs to start moving higher soon.  Let's see if this potential triangle pattern can finally kickstart a rally.  COT report still showing a bullish contrarian view.  Chart to follow.

mar Coffee (update)

After I was stopped out on my futures trades on 12/31, this market put in another double bottom yesterday after the first one failed.  I don't have any futures positions on, but still holding those option positions from mid November:

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 will continue to update this market as I still anticipate a nice sized rally coming this quarter.  Let's see if it happens in time to profit on those options trades.