Thursday, May 26, 2011

Name of the game is commodity trend-line break

We’re seeing a ton of patterns like the following.   It’s a great pattern for commodities coming off the bottom.  You don’t get the exact bottom but often a nice meaty move.      Here are a few that have already triggered (and have been in our newsletter — strategy was swing long into the break) and a few that have not broken yet for your trading pleasure:
Happy to have the commodities back for a trade  (also note the Ag theme –we like Potash and Mosaic $POT $MOS)

Wednesday, May 25, 2011

Now or Never (short term)

Things were looking dicey last night with futures down 10.   Market recovered somewhat overnight and the beacon of light was copper which held strong. Even though we’re not exactly experiencing a rip roaring rally it’s a nice move off the lows.   This is a short term “now or never” day — we bounced off 131.4 SPY gap fill and have bounced back through the 100SMA.   All we want at this stage is for a close off the lows — if we can hold the lows then we should get some bullish set-ups in the next few days.

Copper poking its head over the multi-week range — through there and would be bullish.

Very similar pattern on crude — poking its head over the range.   Not enough distance to call it safe but it’s a good start.

SPY filled gap and bounced — if the lows hold we should get some nice bullish set-ups soon.

These are the types of patterns we’re looking for — MOS we posted yesterday on our stream (and was in our newsletter).

Similar pattern on WLT coming up through 120.

Inflection point indeed.   Bears and bulls, press your bets.    Bulls would need to get some distance from these areas in order for buyers to find conviction to bid prices up and bears would need to go through today’s lows.  Once we break the range we expect trades with more “edge” to enter the picture.  Follow us on StockTwits and Twitter.

Tuesday, May 24, 2011

Resistance points

We had some initial juice in the market with the USD weak and commodities catching a bid on the Goldman upgrade.    However, not too many charts will set-up long until bulls take it up a notch and get it over the following resistance areas:
SPY reversed again on the 50SMA.    A close over would be bullish short-term.   If bulls can’t get it going most likely bears will press their bets.   Inflection point.
Semis barely holding onto 100 SMA — they were holding well until recently and need to pick-up on support in order to keep the bull thesis alive.

XLF rejected again at the 200SMA today — horrible action here but at least would look like temporary bottom on a close above.

QQQ can’t get above 100SMA — again note how traders sold the 100SMA test.

IWM reversed again at 82 resistance.     We should get a distancing from this area soon as bulls/bears press their positions.

As you can see from the above charts we’re at a very important point in the market (short-term).  Both bulls and bears will try hard to press their bets at these inflection points.   We have very few set-ups either way — however we expect that to change quickly once the victor emerges.
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