For the Week of September 08, 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:
The December 30-Year Bonds may sell-off if the contract closes below a lower trend line. There are touches at 133’01 (7/03/14), 134’31 (7/31/14), and 137’23 (9/08/14). The MACD, a trend indicator, is strongly bearish above the baseline. The Trend Seeker (a U.S. Chart Company tool to help identify market trend) is currently Neutral. Perhaps if the contract closes below the trend line, the Trend Seeker will change to Down, confirming a short entry trade. Stochastics, a Momentum indicator, is currently “over sold”. Though the indicator may remain in this territory for some time as evident by the July rally. In addition to Trend Seeker, another short entry confirmation is the 20-day Moving Average (138’15) crossing over the 50-day Simple Moving Average (137’06). Two downside targets are pivot points at 134’31 (7/31/14 and 133’01 (7/03/14), which also happen to be points on the lower trend line. Risk will be determined if the market closes below the trend line and the indicators confirm a short entry.
The December 2014 Soybean Meal contract is trading sideways within a Channel Formation The top of the Channel is 366.6 (7/17/14). The bottom of the Channel is 337.8 (8/12/14). A 20-day Exponential and 50-day Simple Moving Averages are converging. The MACD, a trend indicator, is flat. The Stochatics, a Momentum indicator, is “over sold”. The contract is currently near the bottom of the Channel. The Trend Seeker (a U.S. Chart Company tool to help identify market trend) is currently Neutral. The last sideways cycle resulted in a rally of roughly 50.0 points, though the contract traded sideways through the Fall into the Winter. If the technical indicators begin to turn bullish and there is a break of the 362.0 (9/02/14), this will trigger a long entry on a M.E.T. breakout.
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