Commentaries on the market
Comments as of close Thurs, 4/29/10
Trading Day by Day, copyright 2010
Comments as of close Thurs, 4/29/10
Very difficult week since many markets very choppy with lots of big ups and downs and at moment not much net change on week in any market. When get this choppy in both prices and lines usually best to go to sidelines or at least keep positions light. When in doubt, of which I currently have an abundance of, always can make case to just go with the lines on any new with trend signals. New line pattern signals are going long Crude (as well as Gasoline and Heating Oil) and going long Gold and Silver.
Am about as unsure on these markets as have been in long time since seeing conflicting signs from the various markets, and when in this much doubt find it best to just surrender to the lines (go with the legitimate line pattern signals) and keep positions light.
June S & P - Status - Neutral (to Bullish)/crosscurrent. Observations - Good up day and now have once again made back a big, one day, news caused down spike. This market seems indestructible since always comes back from every dip, but the recent dips have created increasingly negative momentum line patterns since ML’s on fairly solid down cycles which are in position to be sustained for while and also producing series of lower highs/lows in SL (also a negative). These are the type of momentum line patterns that can mark significant tops in markets, but probably will need to make one more of these lower highs. This could happen over next few days, but safer to wait for it. Unless down sharply tomorrow will turn SL’s up and this will give crosscurrent buy signals, but prefer to pass on these. VIX down sharply today so no next day signal there. Bottom line - Lines say sidelines and agree.
June Bonds - Status - Bullish (to Neutral)/mildly concurrent. Observations - Decent up day and this kept patterns positive. Patterns still positive but now in position where price needs to keep pushing up or patterns will turn neutral or even somewhat negative. Did go up decently today while stocks firm all day and this a change and a positive one. Tough call but if still long any can give them little more chance, but would raise stops to area of today’s lows. Bottom line - Lines say can be long and this OK but needs to keep going up. Stops OK in 117.00 area in June Notes and 117.16 area in June Bonds, with regular stops probably OK.
June Euro - Status - Bearish (concurrent). Observations - Moderate up day but not enough to change negative patterns in Euro and Swiss, as well as Pound but less negative there after today. These markets being directly impacted by news of Greece bailout and when news has time much impact line patterns less reliable. If hold any position in these three over weekend, in either direction, will run unusually high news event risk. Normally would just go with lines which continue to be clearly negative, but in this situation this holds high risk since price and SL’s are on recent extreme lows which means any positive news could produce quite sharp up move. Situation like this just an individual trading decision and really just an educated guess since no way to know what weekend news will be, especially since it will be dependent on politicians. Bottom line - LInes still say can be short any/all three european currencies and this OK but see too much weekend news risk so slightly prefer safety of sidelines in all three (suggested stop level in Pound hit today anyway).
June Yen - Status - Neutral (to Bearish)/weekly crosscurrent but any down and will go concurrent to downside. Observations - Quiet, small up day, but nothing significant. Unless up sharply tomorrow pattern will turn clearly negative. Weekly charts have been on verge of turning clearly negative as well. Unless stocks start down and keep going down a little difficult to see what will help this market on upside. So longer price holds under 106.50 area tonight/tomorrow the better the case for anticipation shorts and if should close under that level will be able to make legitimate case to go short. Bottom line - Lines say sidelines but can make case to go short on close under 106.70 or little lower, and sooner feel this will happen the sooner can make case for anticipation shorts.
June Aus and Ca$ - Status - Bullish in Au$, Neutral in Ca$, both crosscurrent. Observations -Very mixed pictures and action continues here and best place would have been sidelines recently (other than buying the dips and then quickly selling). Continue to see signs these two markets may be making significant tops, but up trends still good and odds always favor trend. Too mixed for me so prefer sidelines, but can make small case to be/go long either/both. Bottom line - Lines say can be long Au$ with stops probably OK in 91.50 area. Lines say sidelines in C$ but can make case for anticipation longs with stops OK in 98.50 - 75 area.
June Gold/July Silver - Status - Bullish (to Neutral)/crosscurrent, but weakening. Observations - The recent negative relative strength was reversed today in somewhat unusual way since Gold held but other two (silver and plat) turned quite strong, and see this as quite positive sign. Pictures here have been somewhat mixed recently since gold stubbornly positive while other two on weak side. Line pattern back to positive in Silver and close to doing same in Platinum. Evidently have been too cautious here past few days since have been on sidelines rather than long. Difficult to go back long here on highs but with weekly patterns so positive feel need to do just that, especially with crude complex suddenly positive again. Still not the most solidly positive line patterns but as mentioned week ago sometimes crosscurrent patterns like these will turn concurrent without ever turning pattern back to clearly neutral and when this happens tends to indicate quite positive market, and looks like going to see that here. So at risk of getting “whiplash” in these markets, as well as crude complex above, feel need to go with lines and get back long. Bottom line- Can be/go long either/both. Stops tough to place but under 1160.00 and under 18.40 entered sometime around midday should be OK.
June Crude - Status - Bullish/crosscurrent. Observations - Big up day produces a crosscurrent buy signal, but could go concurrent (and will) if should see another two, three days in this area, or especially any higher. This market has been exceptionally choppy past week and half and thus very difficult to trade. Being on sidelines probably about as good a place to have been (other than buying the dips and then quickly selling, which is always much easier in hindsight than real time). The RBOB gasoline contract very strong today as well and this actually turns that pattern bullish/concurrent to upside. Price there also broke through the triple top in 2.36 area (again), but this time closed above that resistance level. Rarely, if ever, see triple tops in markets since usually when hit a support/resistance that many times will go through and signs are may be doing this in gasoline now. So can make decent case to go long Crude, and/or gasoline, here but this understandably difficult to do since have to buy big two day rally on highs of past month in markets that have been swinging rapidly back and forth between highs and lows of past month. So buying here runs risk of instant, painful “whiplash” which can be both expensive and very psychologically painful (feel like fool). So, tough call and difficult to do but can make legitimate case to go long either/both crude and/or gasoline. bottom line - Can go long either/both Crude and/or RBOB gasoline. Stops even more difficult to place since have to be somewhat generous initially with at least under 84.00 and at least under 2.3400, and would not enter until at least hour or so after tomorrow open (can make case for longs in Heating Oil as well but will limit focus to other two).
Grains - Very mixed picture in this group now and beginning to lose enthusiasm for upside potential here. So may be best to put any longs on fairly strict probation, meaning either up or out tomorrow. Tough to say how long to give any longs tonight/tomorrow, but would not tolerate too much time lower or even too much time around unchanged. Can still make legitimate case for shorts in Bean Oil and stops can be fairly close so not too much risk.
July Corn - Status - Neutral/indecisive. Observations - Very strong early but then faded and closed a little weak. Picture here very mixed now both on lines and charts, as well as action, and just too mixed to make good enough case for position in either direction. With pictures in bean complex and wheat also very mixed case for sidelines here even stronger. Bottom line - Lines say sidelines and agree.
July Beans - Status - Bullish (to Neutral)/very mildly concurrent. Observations - Unchanged day but could not hold early strength and other than very early was on weak side all day. Need to turn SL up tomorrow or pattern will go to neutral/crosscurrent and will do so if closes above 9.96 (or simply higher on day). Still see much more upside potential than down but action has turned a little too persistently negative past few days and this a concern. Picture in Meal similar but still little more positive and so case for longs there also little better, but action in Meal today disappointing since never rallied early when others were quite strong and so for first time in long time Meal was not leader of group. Sometimes this can be a negative warning sign when the long time leader/strongest of a group suddenly turns weak. However, if closes above 290.00 SL will turn up and keep pattern nicely positive. Picture in Bean Oil almost the opposite with market in somewhat weak, although clear, bearish/concurrent pattern and this good enough for at least light shorts. So, tomorrow may tell tale for this complex since just need higher close in beans and meal for SL’s to turn up for higher low and would want to be long if this happens, and can make case until sure will not. Bottom line - Can be long Beans and/or Meal but need to use fairly tight stops now (low 9.90 area in Beans 285.00 area or little higher in Meal on regular basis, or if either closes lower on day). Can be short Bean Oil with stops still a little above 39.50, but would not enter until midday or little earlier.
July Wheat - Status - Neutral/mildly concurrent to downside. Observations - Sharp early rally failed quite a bit late and closed on weak side. Basis lines very mixed picture here now since both trend and ML now slightly down, but SL just turned up and from a higher low. Too mixed to make good enough case for either direction. If had to be in would still be long and as long as holds above 4.85 - 90 can make minor case for longs, but too mixed so sidelines probably best. Bottom line - Lines say sidelines and have to agree.
July Cotton - Status - Neutral (to Bullish)/weakly crosscurrent. Observations - Big down day with close on lows of day and past week. Today’s down turned pattern neutral and hit suggested stop levels easily and so can no longer justify longs. Today’s down also leaves a week and half “island” up above and this can mark significant tops. Very disappointing trade since had nicely positive pattern but no follow through to recent upside breakout. Got back long one day too soon, unfortunately, otherwise would have ended up with nice profits on trade, although today’s loss did not take back all of precious gains. Up trend still strong so could resume up move soon, but for now have to stick to sidelines until see at least some price stability so get closer to SL turning back up. Bottom line - Lines now say sidelines and have to agree.
Chick Goslin
