For the Week of February 11, 2013
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:
March 2013 E-mini NASDAQ
The March 2013 E-mini S&P and the March 2013 mini Dow continued to make new contract highs, while the E-mini NASDAQ contract traded sideways within a Channel Formation. The top point of the month long formation is 2768.75 (1/23/13) and the bottom point is 2686.25 (1/02/13). On Friday (1/08/13), the market finally broke out and closed (2772.00) above the top of Channel Formation. The closing price is also above previous highs from last March and August. As Trend Seeker (a US Chart Company tool to help identify market trend) is in an Uptrend, there is a new long entry opportunity. Buy orders can be placed on a break of Friday’s high (2778.50) or a pull back to the top of the Channel Formation. The MACD indicator agrees the trend is bullish but is Neutral on Momentum. The ADX indicator also exhibits a market with little Momentum as it reads 9.67. The Stochastic indicator exhibits a bullish market as well, below the “over bought” territory. A potential upside target is the contract high of 2848 (9/19/12).
March 2013 Ten Year Note
The March 2013 Ten Year Note contract is trading below a Trend Line. There are just two touches at this time, at 134’01.0 (12/06/12) and 132’17.5 (1/24/13). The high from December 28, 2012 fails to touch the trend line. The market appears to have found support around the 131’00.0 price level. The Trend Seeker (a US Chart Company tool to help identify market trend) is currently Down. Ideally there will be another touch or two before the market breaks the trend line and Trend Seeker flips to an Uptrend. Meeting these criteria, along with confirmation from other technical indicators, will trigger a long entry. The MACD indicator is already bullish but below the baseline. The Stochastic indictor lines are converging towards potentially turning bullish. The contract is currently trading near a 20 day Exponential Moving Average (131’22.3) which coincides with the current Trend Seeker ranking of Neutral.
July 2013 Kansas City Wheat
The July 2013 Kansas City Wheat (Spring Wheat) market is setup for a Momentum Entry Technique breakout. A break below the 803’4 (1/11/13) will trigger a short entry. The Trend Seeker (a US Chart Company tool to help identify market trend) is Down with an Strong ranking. This downside move may coincide with the seasonal “February Break” trading pattern. The MACD indicator is bearish but below the baseline. The Stochastic indicator already displays a strong bearish market but in the “over sold” territory. Support may come in around 770’0 to 760’0 from highs last year this time, but with ADX at 23.70 Momentum could carry this market to the 680’0 price level. A initial stop loss can go above the 2/08/13 trading high (834’4) or above a 20 day Exponential Moving Average (840’1).
STOP ORDERS DO NOT NECESSARILY LIMIT YOUR LOSS TO THE STOP PRICE BECAUSE STOP ORDERS, IF THE PRICE IS HIT, BECOME MARKET ORDERS AND, DEPENDING ON MARKET CONDITIONS, THE ACTUAL FILL PRICE CAN BE DIFFERENT FROM THE STOP PRICE. IF A MARKET REACHED ITS DAILY PRICE FLUCTUATION LIMIT, A "LIMIT MOVE", IT MAY BE IMPOSSIBLE TO EXECUTE A STOP LOSS ORDER.
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