Tradable Patterns

Trading liquid global markets

Buxl (GBX) Major Top Forming

BUXL (Eurex GBX Sep14) Weekly

The GBX fell quicker yesterday than I expected, and should increasingly attract shorts now that its weekly RSI and Stochastics are rolling over towards their warning lines at 70 and 80 respectively. The weekly MACD signal line can also be seen as flattening soon, with the weekly MACD histogram now falling for the first time following its multi-month rally. Realizing that the weekly MACD is a rather lagging indicator, let’s take a look at the daily chart below for further analysis.

Buxl Wkly Chart

BUXL (Eurex GBX Sep14) Daily

A view of the daily chart shows that a steeply upward sloping uptrend line was broken yesterday, with near-term downside targeting the uptrend support line drawn beginning in July. The daily RSI, Stochastics both slope steeply lower, and the daily MACD is just beginning a negative crossover. All of this suggests more downside in the next few sessions. My focus before Friday’s NFP will be on shorting GBX and taking profit/minimizing risk accordingly.

Buxl Dly Chart

VIX (CFE VIX Sep14) Weekly/Daily/4hr/Hourly/30min/5min

Not much changed in the VIX yesterday, as its weekly and daily RSI, Stochastics and MACD continue preparing for a pending rally. The 4hr and hourly RSI, Stochastics and MACD however, point slightly lower. I am now flat after exiting my long yesterday at a slight loss, and will likely remain flat ahead of Friday’s NFP (non-farm payrolls) given the relatively tight range I expect until the data release. My bias post-NFP will be to go long.

VIX (Wkly/Dly/4hr/Hrly/30min/5min) Charts

S&P500 (CME ES Sep14) Weekly/Daily/4hr/Hourly/30min/5min

The ES continues slowly inching along an upward sloping channel as seen in the 4hr chart, and is currently near the middle of the channel. Given limited volatility expected in the leadup to Friday’s NFP, I’m going to sit this one out (after exiting my short at a slight loss yesterday). The plan is to re-enter the short post-NFP assuming it becomes clear the market wants to go lower.

S&P500 (Wkly/Dly/4hr/Hrly/30min/5min) Charts

Nasdaq100 (CME NQ Sep14) Weekly/Daily/4hr/Hourly/30min/5min

The NQ’s trading near the top of a slightly rising channel as seen in my 4hr chart, while the daily Dojis and flattening MACD green line increasingly serve as a warning to those who are still going long at this point. I exited my short yesterday at a slight loss, and will likely remain flat ahead of NFP Friday. As with ES, my intention is to re-enter the short post-NFP assuming it becomes clear the market wants to go lower.

Nasdaq100 (Wkly/Dly/4hr/Hrly/30min/5min) Charts

Netflix (NFLX) Weekly/Daily/4hr/Hourly/30min/5min

NFLX’s increasingly looking vulnerable to downside as it has not only edged away from uptrend support (as seen in the daily chart) but also sees its daily and 4hr RSI, Stochastics and MACD all exhibiting fatigue. I will remain flat today.

Netflix (Wkly/Dly/4hr/Hrly/30min/5min) Charts

Arabica Coffee (ICE KC Dec14) Weekly/Daily/4hr/Hourly/30min/5min

KC surged higher yesterday after a few days of consolidation. It can clearly be seen now in a pennant/flag, where following a symmetrical triangle (as seen in the 4hr chart), we had the flagpole surge yesterday. Given yesterday’s strong move, I expect consolidation in the next few sessions before pushing towards the high made in April. My bias today is to remain flat KC as it becomes increasingly overbought in the 4hr and hourly charts, although I may go long on a strong pullback. Zooming out into the daily chart, you can see that KC’s still in the middle of an upward sloping channel. The weekly RSI, Stochastics and MACD still point higher.

Arabica Coffee (Wkly/Dly/4hr/Hrly/30min/5min) Charts

Cotton (ICE CT Dec14) Weekly/Daily/4hr/Hourly/30min/5min

CT paused in its pullback yesterday once it hit triangle support as seen in the daily chart. Although the daily and 4hr RSI and Stochastics appear to be trying to bottom, the possibility remains of a break beneath the ascending triangle support especially with the daily MACD on the verge of a negative crossover. In the next month or so, I expect CT to follow ZW’s footsteps of consolidation following a strong initial oversold rally. I will remain flat today.

Cotton (Wkly/Dly/4hr/Hrly/30min/5min) Charts

Wheat (CME ZW Sep14) Weekly/Daily/4hr/Hourly/30min/5min

ZW found itself yesterday under a bit of pressure, leading the daily and 4hr RSI, Stochastics and MACD to turn down. It sits near channel support as seen in the daily chart, which if breached, opens for further downside. I will remain flat today.

Wheat (Wkly/Dly/4hr/Hrly/30min/5min) Charts

Corn (CME ZC Dec14) Weekly/Daily/4hr/Hourly/30min/5min

Like ZW, I’ve had to re-evaluate ZC, as although it remains oversold on the weekly chart, the daily Stochastics and MACD increasingly appear vulnerable to downside. The 4hr and hourly RSI and Stochastics all suggest further selling pressure. The key now for bulls is for the August low to hold. Downside beyond the August low though should be fairly limited considering how the weekly MACD is about to make a positive crossover, and with weekly Stochastics as oversold as it is. I will remain flat today.

Corn (Wkly/Dly/4hr/Hrly/30min/5min) Charts

Natural Gas (CME NG Oct14) Weekly/Daily/4hr/Hourly/30min/5min

The profittaking on NG’s recent rally continued yesterday, with a strong push down leaving NG near the middle of a channel seen in the daily chart. Although the daily RSI and Stochastics appear to be trying to bottom, the daily MACD is about to negatively crossover. I will remain flat today.

Natural Gas (Wkly/Dly/4hr/Hrly/30min/5min) Charts

Silver (CME SI Dec14) Weekly/Daily/4hr/Hourly/30min/5min

After yesterday’s drop below 19.4, I had to quickly revaluate my long position and exited at 19.27. I was wrong to position SI so highly on my watchlist yesterday, as the weekly Stochastics was still pointing down. I should have known that with GC exhibiting bearish near-term behavior, SI would not be immune to any GC selloff. I’m going to leave SI on the sidelines for the few sessions, but will keenly watch for the post-NFP market action.

Silver (Wkly/Dly/4hr/Hrly/30min/5min) Charts

Gold (CME GC Dec14) Weekly/Daily/4hr/Hourly/30min/5min

With GC’s break beneath a channel support (as seen in the 4hr chart), it fell towards the bottom of a downchannel (as seen in the daily chart), and sits at triangle support (as seen in the weekly chart). It will be interesting to see if this multiple support zone can hold in the hours following Friday’s NFP.

Gold (Wkly/Dly/4hr/Hrly/30min/5min) Charts

Tesla (TSLA) Weekly/Daily/4hr/Hourly/30min/5min

TSLA’s going to remain off my radar for now as I’ll need to see the daily RSI and Stochastics turning down (and preferably the weekly RSI, Stochastics and MACD flattening) before I consider shorting TSLA.

Note the daily reshuffling of the charts. As mentioned, they’re ordered by how favourable the risk:reward of the trade idea appears based on my analysis for each day.

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