Crude

Crude hit a high of 113.46 and sold off hard forming a bearish engulfing pattern.  There was plenty of resistance ahead- I expected a bit higher move before strong selling.  As it turned out it caught some pressure in the early part of the sell zone.  There's some possible support zones to watch for: 106.75-107.25 and 105.00-105.50.

Crude Oil

May Light Crude Oil is starting to head into a resistance zone.  There is a cluster of fib resistance tracing to some pivot points as far back as Aug '10.  I would label this zone from 113.15-121.15 with some stiff resistance around the 117.50 area.  In front of this level you also have some pivot point resistance lining up with the MR2 @ 115.25 and WR2 @ 116.92.  The most recent move up of the 97.02 pivot low has been strong with a shallow retracement and a 3:2 skew breakout.  The 261, 361, 461 extensions of this pattern are 113.15, 117.14, and 121.13 respectively.  I would expect these recent run-up to stall around one of these extensions as it also coincides with some fib resistance from much older patterns.  Let's see if we can stretch a bit higher, stall, and then retest the 108.25 pivot high.

Cotton

Cotton has not been able to close below the upward sloping neckline of the possible h&s top formation.  It now is an 8 point trendline.  The market bounced off this area hard last Tuesday.  However, the market failed to make a new high and saw some sellers come in on late Thursday and Friday.  We are seeing some consolidation the past 4 weeks and it will be interesting to see if we make new highs or take out that trendline next week.

Cotton

Cotton has found support the past 3 days at the rising window from the gap up made back on March 18th.  You also have a 5 point upward sloping trendline in the same area, which also happens to be the neckline of the possible H&S top that maybe forming.  Friday found some negative trading: new highs on selling.  This rising window/neckline area will be a key area this coming week.  If we can get a break below 192.23 on Monday you could see a good move lower.  This move would be made with a pivot of less than 50%, which is bearish AND with a 2:1 skew, which is also bearish.  Initial support would be seen around the 183.00-186.00 area.  This zone features horizontal support, the double top tgt, monthly and weekly pivot point support and a 50 DMA.  I could see a move to this area and then a possible retest of the neckline.  Let's see how this week plays out.

Cotton



Cotton has been on an impressive up move since mid 2010 appreciating over 150%.  However, we are starting to see some signs of a possible h&s top forming.  The above chart shows the LS, H, and RS have all formed.  We are now just waiting for confirmation, which would be a close below the red neckline.  A mini double top formed and was confirmed yesterday.  This formation projects down to around 183.00.  If the h&s formation gets confirmed the objective is down to around 151.50.  The LS was formed with an engulfing pattern, the H formed with a shooting star, and the RS formed with a piercing line.  All reversals were confirmed with bearish candlestick patterns and shows stiff resistance up at these levels.  We also saw some divergence on the RSI between the LS and H.  Finally we got a bearish crossover on the MACD soon after the H was formed and have gotten back to back closes under the 10 and 20 DMA's.  We do face some possible support at the rising window just above the neckline.  Let's see if we can get a close below this area.  If so, the 50 DMA will be the next area of possible support as it also coincides with the double top objective.  I would expect a bounce at this area and a retest of the upward sloping neckline.

Nasdaq (Update)

It's been a couple weeks since my last post regarding the h&s pattern.  Since this pattern was confirmed we had a retest of the downward sloping trendline.  Prices rejected off this level along with the 10, 20 DMA.  We now have a 3 point downward sloping trendline, but are at a crossroads of future moves.  On the one hand we have confirmation of a h&s top.  On the other hand we have a possible falling wedge forming.  The right shoulder high is the first key level of resistance @ 2260.33.

NASDAQ (update)

Friday's close @ 2091.79 confirmed a weekly head and shoulders top and was below the 50 and 100 DMA's.  The prior swing low of 2100.17 was also taken out confirming a change in trend.  We no longer have higher highs and higher lows on the weekly chart.  The next swing low for possible support is 2024.27 and the recent swing high of 2341.11 will serve as possible resistance.  The target on the head and shoulders pattern is ~ 1732.00.