For the Week of December 23, 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 March 2014 Euro Currency futures contract has formed a Double Top Formation. This is a bearish, trend reversal formation. The Trend Seeker (a U.S. Chart Company tool to help identify market trend) is currently Up. The first point of the Double Top Formation is the high of 1.3834 (10/25/13). The second point, 1.3846 (12/18/13), actually took out the previous contract high, but this was done on a FOMC meeting announcement. A breakout of support will trigger an entry to the downside. There are two support levels. The first is an upward sloping trend line with touches around 1.3300 (11/07/13), 1.3322 (11/08/13), 1.3402 (11/21/13), and 1.3625 (12/20/13). The second is a support of contract session lows from September through the beginning of December at 1.3500. A breakout through this support level will coincide with a breakout through the upward sloping trend line. Potential downside targets are the low of 1.3123 (9/05/13) or the twelve-month contract low of 1.2781 (7/09/13). A potential stop loss will be determined if the contract approaches a potential breakout. The MACD, a trend indicator, has just turned bearish above the baseline as of Friday. RSI, a Momentum indicator, is still bullish. On a breakout, additional confirmation to the downside is strong Momentum. In addition, the contract will trade through a 50-day Moving Average (1.3611) on a breakout.
The March 2014 Silver contract is setup for a trade opportunity to the upside. A break of the 20.480 high (12/11/13) and downward sloping trend line will trigger a long entry. The Trend Seeker (a U.S. Chart Company tool to help identify market trend) is Down. The Trend Seeker must change to Up before a long entry trigger confirmation. The MACD, a trend indicator, is bullish below the baseline. The Stochastic, a Momentum indicator, is bearish, but bounced off the “over sold” level. The RSI, another Momentum indicator, is below the 50.00 level but is trending higher. The contract price is currently trading below the 20-day Exponential Moving Average (19.909). A potential stop loss is the low of 18.890 (12/04/13). Potential upside targets are the highs of 23.115 (10/30/13), 23.400 (9/19/13), and 25.080 (8/28/13).
The February 2014 Live Cattle contract is setup in a Pennant Formation. The upper trend line has touches at 135.450 (10/17/13), 135.300 (10/25/13), 134.975 (11/14/13), 134.900 (11/15/13), and 134.725 (11/29/13). The lower trend line has touches at 125.975 (6/06/13), 126.125 (6/12/13), 126.325 (6/20/13), 126.475 (6/21/13), 131.250 (11/20/13), and 132.150 (12/19/13). The Trend Seeker (A U.S. Chart Company tool to help identify market trend) is Down. MACD, a trend indicator, is bullish below the baseline. A 20-day Exponential Moving Average (133.221) and 50-day Moving Average (133.658) are relatively flat. All of this together presents a mixed market. Until a breakout occurs, above or below, the trend lines, there is no trade setup. On a breakout to the upside, the potential target is the contract high of 138.400 (12/17/12). On a breakout to the downside, the potential target is the low of 124.025 (5/20/13). A potential stop loss will be determined if the contract approaches a potential breakout.
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.