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.