For the Week of October 9, 2017
This weekly feature examines chart formations, along with technical indicators, of two to three commodity markets. Breakouts of these formations may lead to trading recommendations published by the Trade Spotlight advisory service.
Highlighting This Week’s Potential Breakouts:
There is a 1-2-3 Top Formation setting up for the December 2017 British Pound futures contract. The number one point is the twelve month contract high of 1.3622 (9/21/17). The number two point is the recent contract low of 1.3048 (10/06/17). Watching for a retracement to setup the three point. This formation is a trend reversal pattern. The Trend Seeker (a U.S. Chart Company tool to help identify a market’s trend) is down, though with a weak ranking. The Stochastic indicator has hooked up implying that short-term retracement. Short the contract only on a reversal of momentum and break of the number two point. A 20-day Moving Average has hooked down. There is a wide gap between that and the 50-day Moving Average, but a cross over of the two confirms the bearish position. A stop loss will likely be placed initially above the 50-day Moving Average. The downside target is near the 1.2663 (6/21/17) session low, the first point on a lower trend line. That trend line or the 200-day Moving Average below may act as a stringent support level. The stop loss will be trailed in that case.
The December 2017 Gold futures contract found support near the 200-day Moving Average (1259.5) last Friday. Using the Momentum Entry Technique (M.E.T.), buying the contract on a break of today’s session high (1288.0). The upside move today also break through a trend line going back to the twelve month contract high of 1362.4. The upside target is the 50% Fibonacci Retracement of the last sell-off (1313.3). The initial stop loss will be placed below the pivot point low of 1262.8 (10/06/17). The Trend Seeker (a U.S. Chart Company tool to help identify a market’s trend) is currently down, though with a weak ranking. The MACD and Stochastic indictors are shifting up, though it may be a short term retracement. The 20-day Moving Average crossed the 50-day Moving Average. On a retracement the contract would be setting up 1-2-3 Top Formation.
Subscribe to Trade Spotlight Suite – Paid Edition – Quarterly
Trade Spotlight Suite – Paid Edition – Quarterly - Trade Spotlight is a suite of email advisories and provides futures, options and spread trade setups accompanied by definitive trade management. Trade setups are developed by applying the GBE trading methodology of chart formation breakouts confirmed through key technical indicators.
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.