For the Week of October 19, 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:
The December 2015 British Pound contract has meet upside resistance along a trend line with touches at 1.5807 (8/25/15), 1.5650 (9/18/15), 1.5504 (10/15/15), and 1.5491 (10/19/15). A break of the 1.5410 low (10/15/15) and 50-day Moving Average (1.5409) will trigger an entry to the downside using the Momentum Entry Technique. The Trend Seeker (a U.S. Chart Company tool to help identify a market’s trend) is neutral. The MACD, a trend indicator, is neutral as well below the baseline. The Stochastic indicator, a momentum indicator, is beginning to hook over to the downside. For trade confirmation, these indicators should be bearish. A downside target is the support level near 1.5100. A potential stop loss could be placed above the upper trend line.
30-Year Treasury Bonds
The December 2015 30-Year Treasury Bonds contract is trading along a lower trend line with touches at 151’25 (9/16/15), 151’29 (9/17/15), 155’26 (10/09/15), and 157’18 (10/19/15). There appears to be major resistance above the 160’00 level with a not quite Double Tops formation at 161’17 (8/24/15) and 160’20. The Trend Seeker (a U.S. Chart Company tool to help identify a market’s trend) is up, but with a weak ranking. The MACD, a trend indicator, is beginning to hook bearish above the baseline. The Stochastic indicator, a momentum indicator, is neutral. For trade confirmation, these indicators should be bearish. A close below the lower trend line will then trigger a short entry opportunity. If the FOMC leaves rates unchanged and without a timeline to do so next week, this contract should sell-off like it did for the last FOMC announcement. A downside target is the 151’25 pivot point low (9/16/15). A potential stop loss could be placed on the other side of the trend line.
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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