For the Week of November 25, 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:
Ten-Year Treasury Note
The December 2013 Ten-Year Treasury Note contract is setting up for a trade opportunity to the upside. There is a downward sloping trend line with touches at 127’22.5 (11/08/13), 127’05.5 (11/19/13), and 127’02.5 (11/20/13). A close above the trend line and Trend Seeker changing to Up, will trigger an entry to the upside. Currently the Trend Seeker (a US Chart Company tool to help identify market trend) is Down. The MACD, a trend indicator, agrees with Trend Seeker, as it’s bearish above the baseline. Stochastics, a Momentum indicator, is relatively flat. Ideally, the contract retraces first to the support level, recent contract lows in October and November, so that if a breakout occurs the technical indicators confirm the trade signal. Potential stop losses can be placed below the pivot points of 125’29.0 (11/21/13) or 125’23.0 (11/1213).
U.S. Dollar Index
The December 2013 US Dollar Index contract formed a 1-2-3 Bottom Formation. The number one point is the twelve month contract low of 79.060 (10/25/13). The number two point of 81.565 (11/07/13) was setup on a rally. The contract retraced to 80.560 (11/20/13), almost the Fibonacci Retracement of 50% (80.313). This low sets up the number three point of the formation. A break through the number two point triggers an entry to the upside. The MACD, a trend indicator, is currently rolling over bearish above the baseline. Stochastics, a Momentum indicator, crossed over bearish as well. Perhaps waiting on a break of the number two point will allow the technical indicators to confirm the trade entry to the upside . A 20-day Exponential Moving Average crossed over a 50-day Moving Average and is widening, this is bullish. The Trend Seeker (a US Chart Company tool to help identify market trend) is currently Up.
The February 2014 Lean Hogs contract is setting up for a trade to the upside. The contract developed a Flat Bottom Triangle formation. There is a downward sloping trend line with touches at 94.900 (10/30/13), 92.500 (11/12/13), 91.425 (11/20/13), and 91.350 (11/21/13). There is a lower support level with touches at 89.400 (10/18/13), 89.450 (10/21/13), 89.525 (11/14/13), and 89.400 (11/19/13). A close above the trend line and Trend Seeker changing to Up, will trigger an entry to the upside. Currently, the Trend Seeker (a US Chart Company tool to help identify market trend) is Neutral. The MACD, a trend indicator, is bearish above the baseline. Stochastics, a Momentum indicator, is flat above the “over sold” level. An upside target is the twelve-month contract high of 94.900 (10/30/13). A potential stop loss can be placed below the recent lows and support level.
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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