For the Week of November 05, 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 Euro Currency
The December 2012 Euro Currency contract closed below an upward sloping trend line on October 26. There were touches at 1.2069 (7/24/12), 1.2160 (8/02/12), 1.2285 (8/15/12), 1.2309 (8/17/12), 1.2320 (8/20/12) and 1.2926 (10/24/12). However, the Trend Seeker (a US Chart Company tool) was Up so a short entry was not entered. The market tested the upper trend line on October 30 and October 31 but closed below it. Prices are once again trading lower and the Trend Seeker is now Neutral. The market is currently below the 20-day exponential moving average and the 50 day simple moving average. Perhaps it will take a break below the recent low of 1.2813 (10/01/12) for the Trend Seeker to reverse, providing the downside confirmation. The MACD indicator crossed over to a bearish signal above the baseline. The Stochastic indicator crossed over to a bearish signal but is in potential over-sold territory.
December 2012 Crude Oil
The December 2012 Crude Oil contract has traded sideways then proceeded to abruptly sell-off twice in the last two months. Perhaps the market is setting up to do so again. There was over a $2.00 move in the market on Friday. A break of the 84.66 (10/29/12) low would trigger an entry to the downside. An entry is based on the Momentum Entry Technique as well as a break of a mini Channel Formation. The trend and momentum appear to be already bearish based on several indicators.
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