Commentaries on the market
Comments as of close Weds, 4/14/10
Trading Day by Day, copyright 2010
Comments as of close Weds, 4/14/10
June S & P - Status - Bullish (concurrent). Observations - Big, solid up day for all stock indexes today and on chart has look of potential acceleration day to upside. This type of day that produces a chart that could lead to a sharp, fast up move. If this is going to be case then really should not see price back even very close to yesterday’s closing price levels. I, along with many others, have been skeptical of this bull move for past year and have been completely wrong. Tough to finally come in on long side here on highs, but stop levels fairly close and so risk/reward on any new longs here fairly good so see it as worth risk for at least light longs. Relative strength a little on positive side and so this not giving any negative warning signs. VIX next day down signal did not work and this indicator not very good lately. Bottom line - Can be/go long with stops in area of yesterday’s close (1192.00 to 95.00 area). Can make legitimate case to be/go long any/all other stock indexes as well with stops in areas of yesterday’s closes.
June Bonds - Status - Neutral (to Bearish). Observations - Trend and ML both sideways to marginally down so pattern indecisive but any more down tomorrow and will go slightly negative. Strong up day in stocks produced good down day in bonds today. With price on recent highs market a little over bought and so could see some more down near term. This market rallied a couple days more and by more than I expected and so passed on shorts past few days and this may have been mistake, at least was for today. If stocks keep shooting up then bonds probably will continue down, so being/going short bonds here just another way to be/go long stocks. Prefer to stick to sidelines here since not my favorite market and pattern a little too mixed, but if so inclined can make some case for anticipation shorts with stops probably OK in 116.16 - 20 area so not too much risk. Bottom line - lines say sidelines and agree.
June Euro - Status - Bullish/Neutral (in between concurrent and crosscurrent). Observations - Trend indecisive at moment but price above ten week moving average and only need little more up to be able to consider trend legitimately up. Have left two and half weeks of prices below 135.00 level and this now has look of potential “island” bottom and these can mark significant bottoms. Momentum line pattern nicely positive with ML on solid up cycle and SL making nicely higher lows/highs. Price and SL on minor recent highs and when this case a little short term over bought which means could see brief pause/dip at any time; however, see so much more upside potential than down and so prefer to give longs plenty of chance for at least a while. In Swiss trend and ML now both up so that market now Bullish/concurrent to upside and so longs fully justify being/going long there as well. Trend in Pound not quite up yet, but momentum line pattern very positive and so continue to see being long there in anticipation as still justified. COT data has been very positive in both Pound and Euro for long time and now with trends turning up in all three these markets it “should” lead to good sized, sustained up moves and when have this potential feel worth giving longs good chance to work, even though will have few days of down action from time to time even if do keep pushing higher. Bottom line- Lines in between longs and sidelines, continue to see being/going long any/all three these markets as justified. Prefer to go without stops but can use low 135.00 area, low 94.00 area and a little under 153.00 area respectively.
June Yen - Status - Neutral (to Bearish)/crosscurrent. Observations - Unchanged day after some decent early weakness, but once again under pressure in afternoon market. With trend so negative and both SL on week long push up to slight recent highs “should” see some decent weakness soon, but market now moving into fairly solid crosscurrent mode (clear and probably sustained up cycle in ML) and so when do get sell signal “should” just be worth a few days on downside. See nothing wrong with some light anticipation shorts here but with ML now in position for sustained up cycle and SL having made slight new high tend to doubt have much downside potential near term, although when trend this clearly negative can surprise on downside. Bottom - lines say sidelines and slightly agree, but some light anticipation shorts OK with stops probably good in 107.50 - 75 area, with regular stops probably best.
June Aus and Ca$ - Status - Bullish (to Neutral)/mildly concurrent, but in position to become clearly concurrent to upside in day or so and will on any further up. Observations - C$ made clear new long term highs early but then faded quite a bit and closed just above resistance at 100.00, which now “should” be support. What really don’t want to see in C$ now is a quick move clearly back under 1.00 since this would gives today’s one day move above the look of a potential “false” upside breakout and these can mark significant tops. Up trend so clear though “should” not see this, but have to keep it in mind if do. Patterns slightly positive but any more up and will become fairly solidly positive. So late action in C$ a little disappointing but as long as holds above 1.00 should be OK. Au$ did not quite make new highs but picture about same as C$ and so same comments apply. These two have done much better on upside than three european currencies past few months and now with those markets turning up always possible may see some relative weakness in these two, but probably not. Bottom line- Can be long either/both with stops now probably OK in 92.25 and 99.75 areas, with regular stops probably best now.
June Gold/May Silver - Status - Bullish/crosscurrent. Observations - Current chart and line patterns remain clearly positive here and so continue to fully justify being long. With price pausing here for few days and SL’s coming down some this is now a “classic” bullish pattern and so prices “should” head up in earnest fairly soon, although SL’s a little on high side so could chop around another day or so. Other than negative COT data, which can/should override due to clear up trend, all signs remain clearly positive in all three precious metals. Bottom line - Can be (and go) long either/both. Stops should not be necessary but can use 1135.00- 40.00 area and 18.00 area on late in day/close basis if feel need.
June Crude - Status - Bullish (to Neutral)/marginally concurrent. Observations - Solid up day and price quickly back up near long term highs. Recent dip was more than like to see and fouled me up some, but as have mentioned number of times when get out due to short term negativity and price suddenly resumes trending move have to just accept it and get back in. Only potential problems (basis lines) on longs now is possibility for a big bearish divergence since price back near highs but SL long way from its recent highs. However, up trend so solid feel should give longs at least some chance here. Other background negative is fact COT so bearish and has been for long time, but rule is can/should override this when trend clearly up, and this case. Bottom line - Can be/go long with stops having to be 85.00 or little under this level for tomorrow.
May Corn - Status - Neutral/crosscurrent. Observations - Good up day but faded some late. Traded above 3.60 most of day but did not quite close there so did not leave “island” below this level, but expect it to do so soon. While Corn strongest of group today still see any/all in Bean complex and Wheat as having more positive patterns. However, see enough positives here now to justify some light anticipation longs. Bottom line - Lines say sidelines and this fine, but if want to be a little aggressive see some light anticipation longs as fine, with stops needing to be at least under 3.50 on late in day, close basis.
May Beans - Status - Bullish (very weak crosscurrent, but a decent up day tomorrow and will go concurrent). Observations - Unchanged day due to late sell off, but made slight new recent highs before this and see this as positive sign. Still unable to close above clear chart resistance in 9.70 area, but as mentioned yesterday as rule when hit a resistance this many times (five by my count) invariably will fairly soon break through to decisive new recent highs. ML close to turning to what should be sustained up cycle and will do so if can hold here for few days, and especially if move up any. With trend now up, COT very bullish for long time, ML close to going to sustained up cycle pattern close to turning solidly positive. SL and price a little short term over bought now and so may have to have day or so of sideways to little down before ready to punch through this resistance, but see upside potential as so much better than down see being/going long in this area as worth risk, although may have to go through few days of little down or sideways first. Bean Oil pattern remains clearly bullish/concurrent and with SL back down near zero “should” be ready to resume upside pressure. Trend in Meal now slightly up but momentum line pattern still a little sloppy so may need a little pause/dip there before ready to push higher, but COT bullish and trend up and so could easily surprise on upside. Bottom line - Can be/go long Beans and/or Oil. Lines also slightly say can be/go long Meal and longer holds this area next few days better the case for this. Prefer to go without stops for time being but can use 9.55, 267.00 and 39.25 areas on close basis if feel need.
May Wheat - Status - Neutral/crosscurrent. Observations - Unchanged two sided day, but made slight new highs before selling off late. If can close above 4.80 next few days will leave a three week modified “island” down below and this can mark significant bottoms. Continue to believe this market has much more upside potential than down and with ML in solid up cycle and SL making higher lows/highs see enough positives to be/go long here in anticipation of trend turning up soon. Bottom line - LInes say sidelines and this OK but continue to prefer anticipation longs in May and/or July. Stops about 15 cents down on late in day/close basis OK for now.
May Cotton - Status - Neutral/crosscurrent. Observations - Moderate down day which keeps pattern neutral. Continue to believe will eventually see continuation of current solid up trend, but momentum line pattern unattractive for longs at moment so prefer to stick to sidelines for at least another day. Bottom line - Lines say sidelines and agree.
Chick Goslin
