Thursday, May 16, 2013

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.

Thursday, May 9, 2013

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.

Monday, May 6, 2013

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.

Thursday, May 2, 2013

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.