For the Week of April 21, 2014
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:
Euro FX
The June 2014 Euro FX contract established a 1-2-3 Top Formation. The number one point is the twelve-month contract high of 1.3966 (3/13/14). The number two point is the 4/04/14 low of 1.3669. The contract rallied to 1.3903 (4/11/14), setting up the number three point of the formation. A break through the number two point triggers an entry to the downside. An aggressive short entry, using the Momentum Entry Technique (M.E.T.), is a break of the 1.3787 low (4/15/14). The MACD, a trend indicator, is above the baseline and slightly bearish. The Trend Seeker (a U.S. Chart Company tool to help identify market trend) is currently neutral, with a neutral ranking. A 1-2-3 Formation is a trend reversal formation though. Stochastics, a Momentum indicator, is strong to the downside well above the “over sold” territory. A 20-day Exponential Moving Average and a 50-day Moving Average are converging. A crossover of these Moving Averages, which should occur above the number two point, is a bearish indicator. A downside target is the 1.3482 low (1/31/14).
Chicago Wheat
The July 2014 Chicago Wheat contract is setup for an entry to the downside using the Momentum Entry Technique (M.E.T.). An entry would be a break of the 663’6 low (4/11/14). The MACD, a trend indicator, is bearish above the baseline. The Trend Seeker (a U.S. Chart Company tool to help identify market trend) is currently up though. Stochastics, a Momentum indicator, is strong to the downside above the “over sold” territory. A 20-day Exponential Moving Average and a 50-day Moving Average are converging. A crossover of these Moving Averages, which should occur above the number two point, is a bearish indicator. A downside target is a support level near the 624’2 high (2/26/14). A potential stop loss can be placed above the 718’2 (4/16/14) high or just the 7.00 price level.
Feeder Cattle
The August 2014 Feeder Cattle is grinding along a lower trend line while potentially formed a top at 183.000 (4/14/14). The touches on the lower trend line are 169.825 (2/06/14), 174.100 (3/05/14), 177.900 (4/01/14), and so far today’s low of 180.900. A close below the lower trend line would trigger a short entry opportunity. The MACD, a trend indicator, is above the baseline and slightly bearish. The Trend Seeker (a US Chart Company tool to help identify market trend) is currently up, with a weak ranking. The Trend Seeker should be down for a short entry confirmation. Stochastics, a Momentum indicator, is strong to the downside well above the “over sold” territory. A 20-day Exponential Moving Average is angling down, but a 50-day Moving Average is angling up. A crossover of these Moving Averages, which should occur above the number two point, is a bearish indicator though. A downside target is a support level near the 170.500 level. A potential stop loss can be placed above the twelve-month contract high of 183.000.
Risk Disclosure
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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