For the Week of October 01, 2012
The 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:
December 2012 30 Year Treasury Bond
The December 2012 30 Year Treasury Bond contract traded as high as 150’09 on Friday (9/28/12). This touch, along with the highs at 151’29 (9/04/12) and 154’17 (7/25/12), create a downward sloping trend line. A close above the trend line will trigger a buy entry. It appears the market will need to settle currently at 150’08 or higher for confirmation of a breakout. The Trend Seeker (a US Chart Company tool to determine trend direction) is currently Down but the ranking is Neutral. Perhaps it will take a break above the high of 151’29 (9/04/12) for the Trend Seeker to flip, providing confirmation to the upside. The upside target could be the twelve month high of 154’17 (7/25/12). A close above that high would trigger another entry to the upside based on the Hi-Lo Breakout Formation. The MACD and Stochastic indicators crossed over to a buy signal already.
October 2012 Sugar
The October 2012 Sugar contract has formed a 1-2-3 Bottom Formation. The twelve month contract low was made on 9/6/12 at 18.81, this set up the number one point of the formation. The market rallied to 20.25 (9/14/12) setting up the number two point of the formation. The market retraced to 18.93 (9/19/12) stopping short of the contract low and has traded higher since. That low sets up the number three point of the formation. In addition, there is an downward sloping trend line with touches at 21.32 (8/20/12), 21.00 (9/14/12), and 20.87 (9/26/12). A close above the trend line (currently 20.82) would trigger an entry to upside before the 1-2-3 Bottom Formation breakout (21.00). The MACD indicator crossed over to a buy signal, however, the Stochastic indicator crossed over to a sell signal. The Trend Seeker is currently Down. So there is no trigger until there is confirmation to the upside.
December 2012 Lean Hogs
The December 2012 Lean Hogs contract formed a Double Bottom Reversal Formation. Although it makes for a stronger formation if created over weeks or months timeframe, this current formation has been in place since the end of August. The first low was made at 70.050 (8/23/12) and tested, but not broken, on 9/07/12. At the time the trend was lower. Since the second low of 70.050 (9/07/12) the market as rallied to 75.875 (9/25/12). During the rally trading volume increased and the trend reversed to an Uptrend according to the Trend Seeker. The past couple trading sessions have tested the previous high of 73.175 (9/05/12). This high was the peak while the two lows at 70.050 were made. Look for a breakout above the high of 75.875 (9/25/12) for a continuation of this bullish formation.
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