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Home / Futures Blog / Beyond the “Spotlight”

Beyond the “Spotlight”

February 18, 2015 by Don DeBartolo

For the Week of February 17, 2015

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:

Let’s review contracts with potential trend line breakouts. Trend lines act as potential support or resistance levels in the markets. A close above an upper trend line or close below a lower trend line triggers a potential trade setup if technical indicators confirm the chart formation.

British Pound

The March 2015 British Pound contract has formed a downward sloping trend line with touches at 1.6494 (9/19/14), 1.6160 (10/28/14), 1.5776 (12/16/14), and 1.5349 (2/06/15). The contract closed above the upper trend line on 2/12, however, the Trend Seeker (a U.S. Chart Company tool to help identify market trend) is neutral. For trade confirmation, the trend must be up. The MACD, a trend indicator, is already bullish below the baseline. The Stochastic indicator exhibits a contract with strong momentum, though it’s in the overbought level currently. A 20-day Moving Average is sloping upward, while a 50-day Moving Average is sloping downward. A crossover of these averages is a bullish signal. A long entry on a pull back to the trend line is an aggressive entry if the Trend Seeker has not yet changed. A potential stop loss is below the recent contract lows near 1.5163 (2/05/15). An upside target is a potential resistance level at 1.5813 (11/28/14).

U.S. Dollar

The March 2015 U.S. Dollar contract has formed an upward sloping trend line with touches at 87.830 (12/16/14), 93.680 (2/06/15), and 94.075 (2/12/15). The contract closed below the lower trend line on 2/13, but once again, the Trend Seeker has not confirmed the trade. The Trend Seeker (a U.S. Chart Company tool to help identify market trend) is up. For trade confirmation, the trend must be down. The MACD, a trend indicator, is already bearish above the baseline. The Stochastic indicator exhibits a contract with momentum to the downside. A 20-day Moving Average and a 50-day Moving Average are sloping upward. Perhaps a breakout using the Momentum Entry Technique of the 93.385 (2/03/15) low will allow for a shift in the trend. A potential stop loss is above the pivot point high of 95.230 (2/11/15). One downside target is the 50% retracement of the last rally at 91.865. A second target is the 87.830 (12/16/14) low which may be a potential support level.

Silver

The May 2015 Silver contract has formed an upward sloping trend line with touches at 14.705 (12/01/14), 15.570 (1/02/15), 16.600 (2/06/15), and 16.650 (2/12/15). The Trend Seeker (a U.S. Chart Company tool to help identify market trend) is neutral, with a bearish ranking. For trade confirmation, the trend must be down. The MACD, a trend indicator, is already bearish above the baseline. The Stochastic indicator exhibits a contract with momentum to the downside. A 20-day Moving Average is sloping downward, while a 50-day Moving Average is flat. A crossover of these averages is a bearish signal. A potential stop loss is above Friday’s high (17.475) and the 50-day Moving Average. The downside target is the twelve-month contract low of 14.705 (12/01/14).

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.

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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