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Home / Futures Blog / Beyond the “Spotlight”: Unleaded Gasoline, Kansas City Wheat and Oats

Beyond the “Spotlight”: Unleaded Gasoline, Kansas City Wheat and Oats

December 9, 2013 by Don DeBartolo

For the Week of December 09, 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:

Unleaded Gasoline

The January 2014 RBOB contract is setup for a trade to the upside. The contract has potentially found support along a lower trend line. There are touches at 2.4922 (11/07/13), 2.4995 (11/08/13), 2.6586 (12/02/13), and 2.6967 (12/05/13). There is also support at a 20-day Exponential Moving Average of 2.6734 and a 50-day Moving Average of 2.6270. The resistance to upside are the highs of 2.7436 (9/13/13), 2.7450 (11/22/13), 2.7496 (12/04/13), 2.7490 (12/05/13), and 2.7545 (12/06/13). A break of the highest high of 2.7545, will trigger an entry to the upside based on the Momentum Entry Technique. On the conservative side, wait for a close above the recent highs. The Trend Seeker (a U.S. Chart Company tool to help identify market trend is Up. The MACD, a trend indicator, agrees, as its bullish but above the baseline. Stochastics, a Momentum indicator, exhibits a market that is potentially rolling over to the downside. The same goes for RSI, the Relative Strength Index. A pull back to the support levels could setup a long entry trade with less risk though.

Kansas City Wheat

The Kansas City Wheat market is mirroring this past summers trading activity. This summer, the market traded sideways, spiked up, retraced, and once again traded sideways briefly. Back on September 25, the market broke out above recent highs and rallied for 70 cents. Now, a break of the recent highs around 716’0 may trigger the same type of rally. Currently the Trend Seeker (a U.S. Chart Company tool to help identify market trend is Down. The MACD, a trend indicator, agrees as it’s bearish but above the baseline. This all lines up with March 2014 contract making a new twelve month contract low at 693’2 (12/06/13). Stochastics, a Momentum indicator, exhibits a market that is potentially “over sold.” The 20-day Exponential Moving Average is pointed down but the 50-day Moving Average is flat, both are above the current market price.

Oats

The March 2014 Oats contract is setup for a trade to the upside. The contract is trading along a lower support line. There are touches at 308’4 (11/08/13) and 324’0 (12/05/13). There is also support with a 20-day Exponential Moving Average of 325’2. A break of the 338’0 (11/26/13) high will trigger an entry to the upside based on the Momentum Entry Technique. The Trend Seeker (a U.S. Chart Company tool to help identify market trend is Up. The MACD, a trend indicator, agrees as its bullish but above the baseline. Stochastics, a Momentum indicator, is bullish. The same goes for RSI, the Relative Strength Index. A potential stop loss can be placed below the pivot point low of 324’0 (12/05/13). A potential upside target is the 359’0 (8/27/13) high; the next target is the 394’2 (6/19/13) high.

Risk Disclosure

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.

Filed Under: Trade Spotlight

About Don DeBartolo

Don C. DeBartolo is a Series 3 licensed broker registered with the National Futures Association (NFA). As a former arbitrage clerk in the S&P 500 futures pit at the Chicago Mercantile Exchange (CME), Don has floor trading experience. Taking his trade execution expertise and ability to navigate a fast-paced environment, Don transitioned to the brokerage side of the business. Since 2005, he has worked at Daniels Trading, a brokerage firm in the heart of the financial district in Chicago. His responsibilities as a broker include providing market analysis, trade execution, and money management to his clients around the world. In March 2010, he developed a formal trade advisory for clients of the firm seeking specific trade recommendations and subsequent risk management.

Due to his widespread proficiency and experience with the futures and commodity options markets, he is able to offer his clients timely insight, specialized trade recommendations, and educational information through various videos and writings.

Studying at Loyola University Chicago, Don discovered the international sport of rugby. Still today, he plays for the Chicago Griffins, a member of the highest league of rugby competition in the United States. Skill and discipline are two traits that carry over from the pitch to the trading screens.

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Risk Disclosure

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.

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