For the Week of August 5, 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:
The September 2013 British Pound contract has setup a 1-2-3 Bottom Formation. The number one point is the twelve month contract low of 1.4806 (7/09/13). The number two point of 1.5432 (7/25/13) was setup on a rally in mid-July. The contract retraced to 1.5098 (8/02/13), and in the same session, rallied. The Friday session low setup the number three point of the formation. A break through the number two point (also the 61.8% Fibonacci Retracement of the previous sell-off) triggers an entry to the upside. The MACD, a trend indicator, is bullish just below the baseline. Stochastics, a Momentum indicator, is bullish as well. The Average True Range, a Volatility indicator, shows an increase in buying pressure. The market is above a 20-day Exponential Moving Average and 50-day Moving Average, but rather flat. The Trend Seeker (a US Chart Company tool to help identify market trend) is currently Down. For trade confirmation, the Trend Seeker must change to an Uptrend. A potential initial target is the high of 1.5743 (6/13/13).
The December 2013 Chicago Wheat contract is trading along a downward sloping trend line. There are touches at 730’6 (6/19/13), 705’6 (7/11/13), and 679’6 (8/02/13). A break above the trend line will trigger an entry to the upside. Though for trade confirmation, Trend Seeker (a US Chart Company tool to help identify market trend) must change to Up from its current Down trend. That may take a break out through the 50-day Moving Average (694’7). The MACD, a trend indicator, is bullish just below the baseline. Stochastics, a Momentum indicator, is bullish as well. The Average True Range, a Volatility indicator, is weak. A sign the market may trade sideways. A potential stop loss is the twelve month contract low of 658’2 (7/25/13). A potential upside target is the resistance level at 758’2 (5/03/13).
The October 2013 Lean Hogs contract is setup for a Momentum Entry Technique to the downside. The short entry trigger is a break of the 82.925 (7/30/13) low. The contract made a Double Top at 87.075 (6/28/13) and 86.950 (7/25/13), retracing in between. The low of the retracement stopped right near the 50% Fibonacci Retracement level of the rally in May and June. The MACD, a trend indicator, is bearish just above the baseline. Stochastics, a Momentum indicator, is bullish due to the recent trading activity. The Average True Range is strong, signaling volatility in the market. The contract is trading below a 20-day Exponential Moving Average and 50-day Moving Average, but rather flat. The Trend Seeker (a US Chart Company tool to help identify market trend) is Neutral. For trade confirmation, the Trend Seeker must first change to a Down trend. A potential stop loss can be placed above Friday’s high (84.475) and the 50-day Moving Average (84.583). A potential downside target is the twelve month contract low of 78.350 (3/20/13).
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.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.