For the Week of April 22, 2013

The GBE Trade Spotlight advisory service applies the GBE trading methodology (buying or selling commodity contracts based on breakouts of chart formations and technical indicators) to identify one to two trade setups per week.

Highlighting This Week’s Potential Breakouts:

June 2013 Japanese Yen

Since September 2012, the Japanese Yen market has been selling-off with only short-term retracements. Establishing a new twelve month low at 1.0008 on April 11th, the market retraced to 1.0383 (4/15/13), only to roll over once again. The Trend Seeker (a US Chart Company tool to help identify market trend) is in a Downtrend; a close below the twelve month contract low will trigger a Hi-Lo breakout entry. The Hi-Lo Breakout is entering a market after a close above (or below) a twelve month contract high (or low). The MACD indicator agrees with the Trend Seeker. The contract is also trading below both a 20-day Exponential Moving Average and 50-day Moving Average. The Stochastic indicator is bearish, just below the “Over Sold” line. There is favorable Momentum with an ADX reading of 22.04. A stop loss above the recent retracement (1.0383) may be too steep of risk, but that would be the natural level of resistance. A potential target could be 0.9657, using a Wave Projection.

July 2013 Kansas City Wheat

The July 2013 Kansas City Wheat contract has found support along a lower trend line, There are touches at 711’4 (4/01/13), 735’2 (4/15/13), 735’4 (4/16/13), and 742’0 (4/19/13). The Trend Seeker (a US Chart Company tool to help identify market trend) is Down but the ranking is Weak. If the market takes out a recent high of 763’0 (4/12/13), this would trigger an Momentum Entry Technique. Although, the Trend Seeker must change to an Uptrend before working an open order. It may take the contract to take out the high of 783’4 (3/28/13) for the Trend Seeker to change. The MACD indicator is already bullish, below the baseline. The Stochastic indicator is also bullish, below the “Over Bought” territory. A 50-day Moving Average is converging on a 20-day Exponential Moving Average. This is evident by a current sideways trading market. The Momentum is currently down. The ADX indicator reads 16.56. Perhaps on the breakout, Momentum will increase, setting up good follow through.

August 2013 Feeder Cattle

The August 2013 Feeder Cattle futures contract is setting up for a Hi-Lo Breakout trigger. A close below the twelve month contract low of 145.25 (3/20/13) will trigger an entry to the downside. An aggressive trade opportunity is using the Momentum Entry Technique to place an open order taking out the contract low, instead of waiting for the close below. The MACD indicator is bearish, below the baseline. The Stochastic indicator is also bearish, in the “Over Sold” territory. Momentum is high, with an ADX reading of 29.64. A stop loss can go above the recent retracement at 148.025 (4/17/13). A potential target could be 138.850, using a Wave Projection.

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