For the Week of October 22, 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 E-mini S&P
The December 2012 E-mini S&P contract is trading along an upward sloping trend line. There are touches at 1250.00 (6/04/12), 1314.25 (7/25/12), and 1416.50 (10/15/12). There was another touch (1423.50) on Friday on the anniversary of Black Friday. A close below the trend line would trigger a sell entry. It appears the market will need to settle currently at 1424.00 or lower to close below that trend line. The Trend Seeker (a US Chart Company tool) is currently Up and the ranking is Strong, however. Perhaps it will take a break below recent lows (1414.50) and potential support for the Trend Seeker to flip, providing the downside confirmation. The chart also appears to be a condensed version of a Triple Top Formation. It’s been formed over a month time period, as opposed to a three to six month time period. MACD and Stochastic indicator crossed over to bearish signals already.
December 2012 Mini Dow
The December 2012 Mini Dow contract has formed a 1-2-3 Top Formation. The twelve month contract high was made on October 5 at 13599, this set up the number one point of the formation. The market pulled back to 13208 (10/15/12) setting up the number two point of the formation. The market turned around trading as high as 13530 (10/18/12) stopping short of the contract high. This is the number three point of the formation. A break of the number two point (13208) would trigger a short entry. The market has already closed below the 50 day Moving Average of 13267. The MACD and Stochastic indicator crossed over to sell signals already. The Trend Seeker is currently Up but this is trend reversal formation.
January 2013 Canola
The January 2012 Canola contract has formed a 1-2-3 Top Formation. The twelve month contract high was made on September 14 at 657.5, this set up the number one point of the formation. The market pulled back to 580.7 (10/03/12) setting up the number two point of the formation. The market turned around trading as high as 620.6 (10/11/12) stopping short of the contract high and 50 Day Moving Average. This is the number three point of the formation. The market formed another number two point at 593.0 (10/15/12) and three point at 617.0 (10/19/12) if that high holds. A break of either number two point, or the lower trend line connected those lows, would trigger a short entry. The MACD and Stochastic indicator crossed over to sell signals already. The Trend Seeker is already Down for this market.
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