Corn (CME ZC Dec14) finished off a solid rebound week on Friday with more gains, and remains well positioned this week for more upside. Early this week though, I expect ZC to pullback given that its 4hr chart appears a bit overbought. I’ll be looking to go long a few lots on pullbacks to the 365-370 range, assuming the 4hr and hourly charts align well with my longer term bullish view.
Cotton (ICE CT Dec14) has broken into my .64-.645 target buy range I had mentioned Friday. I’m going to try buying lower in the .6325-.635 range as the 4hr Stochastics is still pointing down suggesting more downside.
Wheat (CME ZW Sep14) pushed strongly higher Friday after the profittaking earlier in the week. I may buy a few lots in the 535-540 range, but will wait for the 4hr and hourly charts to line up better with the weekly chart buy signal.
Arabica Coffee (ICE KC Sep14)’s consolidation finally appears over, given Friday’s strong performance and push above a descending resistance line as seen in the charts below. Readers over the last few weeks will know that I’ve redrawn the triangle support and resistance lines a few times during the consolidation from the July peak. Unfortunately, when there aren’t enough reference points (highs and lows) from which to draw the triangle lines, the early triangle lines are naturally less accurate in their ability to project price moves. Even so, I’ve maintained my bullish tilt throughout the last few weeks given the monthly and weekly chart signals. After Friday, all key timeframe charts practically point up now. Crucially, I’ve been waiting for the daily MACD to turn up. It still has a slight possibility of negatively crossing over, but I expect this negative crossover to be brief given that the daily Stochastics is now turning up. Note how MACD generally lags Stochastics by a few days on a daily chart. Also bullish on Friday was the higher high made versus the Wednesday and Thursday peaks, along with Friday’s higher low versus Thursday’s. With the 4hr and hourly RSI/Stoch/MACD pointing up as of the Friday close, I expect today’s open to be fairly strong. I’ll be looking to buy on any dip later in today’s session in the 1.83-1.85 range, and targeting intraday exits around 1.89-1.9.
S&P500 (CME ES Sep14) and Nasdaq100 (NQ CME Sep14) both exhibited interesting behavior Friday, with a steady grind higher initially followed by a selloff on the Ukraine news, and then another rally even higher into the close. ES is still short of its high in July, while NQ traded a hair above its July high on Friday. In this morning’s trading, NQ opened above the psychologically important 4k level. I exited my shorts on NQ during Friday’s mid morning pullback, and am currently flat. As the ES and NQ chart profiles are rather mixed now in the short term, I’m going to remain flat for probably the next few days until both are more overbought on the daily and 4hr charts. This time, I’ll be shorting the ES instead of NQ as ES has been the weaker performer these last few months. I’d be going long the VIX (CFE VIX Sep14) at around the same time I go short the ES.
Gold (CME GC Dec14) continues being vulnerable to more near-term downside pressure after Friday’s selloff, as its daily and 4hr RSI, Stochcastics and MACD all point down. I’ll remain flat on GC until its daily and 4hr charts line up bullishly again.
Silver (CME SI Sep14) continued underperforming GC on Friday, falling further on a percentage basis. Its 4hr and hourly charts are looking oversold, with a bit more downside suggested by the daily MACD. I am flat SI having traded out of my Friday position several times (for small profits) and will remain flat until the daily chart looks closer to a more sustainable rebound.
Netflix (NFLX) broke above a downward sloping channel resistance line on Friday, and appears to have more upside in the next few days, especially given NQ’s break above 4k.
Natural Gas (CME NG Sep14) has given back all of its August gains, and is now sitting at its July low. Based on how steeply negative the weekly MACD green line appears, the July low is unlikely to hold, and the next downside projection would be the November low. I will continue to sit out trading NG as better trade setups appear in the markets described above.
The BUXL (Eurex GBX Sep14) continues pushing higher on safe haven inflows, and on bullish near-term technicals. The weekly MACD histogram continues rising, and the price is gravitating towards GBX’s all time high made in April 2012. I’ll likely remain flat GBX for the next few weeks.
Note the daily reshuffling of the charts below. As mentioned, they’re ordered by how favourable the risk:reward of the trade idea appears based on my analysis for each day.