Commentaries on the market
Comments as of close Thurs, 4/8/10
Trading Day by Day, copyright 2010
Comments as of close Thurs, 4/8/10
Nothing today to make me change overall view headed for some very good markets since see decent signs dollar may be making major top and commodities, especially precious metals, may be headed for good sized, sustained up moves. Cotton a little weaker than expected today, but not too surprising based on current patterns, and market “should” head higher again fairly soon (due to solid up trend). Never argue much if someone wants to take good profits, and have some now in crude, gold/silver and Au and Ca$, but see lot more upside potential in all these and so prefer to stick with longs and continue to add on any one to two and half day dips.
June S & P - Status - Neutral (crosscurrent). Observations - Had some very minor negative relative strength today and this adds a little to short term negative picture. If not for yesterday’s positive relative strength probably would have tried some shorts and these would have been losers. Passing on a losing trade does not show up in net p & l but does make big difference. Continue to see very mixed picture here and so still see sidelines as best. Trend a little too positive for shorts, but rest of picture little too negative for longs. Always underestimate this market on upside, but this not the type of picture would want to be/go long. Bottom line - Lines say sidelines and agree.
June Bonds - Status - Bearish/Neutral (in between crosscurrent and concurrent to downside). Observations - Pattern almost more neutral than negative, but overall picture still more negative than neutral. So feel should give any shorts at least another day or so. Continue to see big downside potential in this market since have big supply coming to market for at least next couple years and if should begin to see some commodity inflation, which believe will, then this market will have very difficult time holding up at these “high” levels (low interest rates). Have been stuck in sideways pattern for several months, but expect will break out to downside soon. Bottom line - Lines indecisive at moment but still see enough negatives to justify shorts with stops OK a little above 116.00 level (probably on regular basis now), a little above today’s highs in June Notes OK as well (116 10/32).
June Euro - Status - Bearish/concurrent. Observations - Pattern still negative enough for shorts in Euro and Swiss, but continue to see this pattern as just short term negative and so prefer to stick to sidelines since feel have missed the short term down. Market has been under pressure past few days due to renewed concerns about Greek debt, but still see some decent potential positives and so continue to doubt have much downside left in this market. If can hold this area or better next few days would set up fairly positive momentum line pattern (ML would get into position for sustained up cycle and price/SL would have big bullish divergence). Once again Pound came back very well from some decent early weakness and continue to feel this market just does not want to go down anymore and see it as worth some against trend longs if want to be very aggressive (stops on these now probably OK in 151.25 area, especially if see this after midday). bottom line - Lines say can be short, prefer sidelines.
June Yen - Status - Bearish/concurrent. Observations - On strict basis lines now Neutral/crosscurrent, but still see overall picture as sufficiently negative to consider it bearish/concurrent and so still justify shorts. Today good example of what I mean when talk about two and half days up. Had two up days and then up some more overnight and early and when pattern negative this tends to be about all get on upside. However, now would not want to see any more up so feel should use little “stronger” stops (regular stops rather than midday or later). Today also good example of why usually prefer not entering stops until midday or later, but if trade up in area of today’s highs again would view it as too much to stay short with pattern so marginally negative. bottom line - Lines a little mixed but still see it as negative enough to justify being short, but would not use regular stops in 107.50 or little higher area.
June Aus and Ca$ - Status - Bullish/concurrent. Observations - Decent upside reversals on both these markets today and that’s good positive. A little short term overbought at moment since both prices and SL’s on high side, but ML up cycle in position to strengthen soon and this good positive. Still see good upside potential in these two markets and so want to give longs decent chance. Bottom line - Can be long either/both with stops now probably OK a little under 99.00 in C$ and in 91.25 - 40 area in Au$.
June Gold/May Silver - Status - Bullish/concurrent. Observations - Third day in row of clear negative relative strength. So far this has not produced any meaningful downside pressure, but longer goes on more of a short term concern it is. With patterns clearly positive do not see negative relative strength as sufficient to take profits on longs and go to sidelines, even temporarily, but do see it as negative enough to pass on adding to longs at moment. See so much upside potential prefer to risk some downside for short term than be out. bottom line - Can be long either/both. Prefer to continue to go without stops since still want to add on any dips, not sell on stops.
May Crude - Status - Bullish/concurrent. Observations - Price now on two day dip and since still in quite positive pattern can fully justify being long and going long here. Market gave nice dip intraday for any new longs. Any further down tonight/tomorrow would be two and half day dip and this would qualify as good buying opportunity, again. Prefer to continue to go without stops, but can use low 83.00 area (basis May) on late in day/close basis if feel need. Would go with June for any new longs. Bottom line - Can be/go long. Stops “should” not be necessary but can use fail safe stops a couple hundred points below today’s close.
May Corn, Beans and Wheat - Status - Neutral (crosscurrent). Observations - Corn still the weakest, most negative of group and only one would even consider for shorts, but even there see too much in way of potential positives and see downside potential as too limited to justify shorts. Can fully justify being long Bean Oil now since that market is Bullish/concurrent and see this as fine, and especially if can get a little dip from current levels. Could set up quite positively for all in group in few days or week if they can hold in current levels, or especially move up any. Bottom line - Lines say sidelines in corn, beans and wheat and continue to agree, but can be long Bean Oil now and can initiate new longs here and especially on further dip.
May Cotton - Status - Neutral (crosscurrent). Observations - Had the right idea here several days ago when suggested treating longs here as short term trade but was reluctant to stick with this idea when pattern went bullish/concurrent. While on very strict basis pattern still bullish/concurrent believe more accurate to consider it neutral/crosscurrent since will be after tomorrow (unless up very sharply and see that as unlikely). Suggested stop levels hit on both intraday and close level and so see sidelines as best for moment; however, if can hold this area for few days pattern will set up potentially more positively. Have felt needed one more down in both price and SL to set up more positive pattern and now have that potential, just need to turn SL up for a third higher low and believe will see this. Bottom line - Lines now essentially say sidelines and agree for moment, but still see upside potential as much better than down.
Chick Goslin
