The Euro trade was stopped out above the 50 day MA. That said, it appears that volatility is closing in on current pricing. There is a confluence of moving averages and a tightening of Bands that are coinciding with fundamental mayhem as of recent times. Let’s take our losses and move on to the next trade. This brings me to a July Copper chart. I notice that the 21 DMA is crossing through the 50 DMA to the upside. In addition to that the MACD’s are flattening and the Bollingers are tightening. Ok, so that tells me a couple of things. First, volatility is coming in. Second we are looking for a safe bit of news or catalyst to tip the hat in a more decisive direction. Allow me this bit of news: http://www.bloomberg.com/news/2013-05-31/copper-set-for-first-monthly-gain-in-four-on-mine-supply-concern.html and http://www.bloomberg.com/news/2013-05-29/copper-users-squeezed-as-glut-clogs-warehouse-lines-commodities.html. I’m looking for an upside move through previous days highs of 3.3285 to a target price of the overbought Band area of 3.3820 with a stop at the current lower band of 3.2625.
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All posts for the month May, 2013
First you have a rally in stocks on news the Fed will begin tapering stimulus. Today you have a sell off on news the Fed will begin tapering stimulus. One minute the economic conditions are great and money is going into the US and then you have fear of sustainability and money flows out of stocks. Yields are rising; yields are falling. Sell higher yielding dividends; Defensive stocks take a hit. Gold is expensive; gold is cheap. Gold is losing its store of value yesterday; Today India is scooping up the precious metal. China is supporting demand yesterday; China’s GDP is revised lower than expected. OPEC says oil prices are stabilized; Inventories on oil are higher than expected and domestic supplies projected to all time highs. “Abe-nomics” to support Japanese inflation; “Abe-nomics” overshoots target.
All this does is make me keenly aware of how much I don’t know.
I posted the S&P mini June contract because I believe a short trade fundamentally offers a nice hedge against the unknown. Technically we have a nice risk reward/high probability trade on the short side. I have a target price of 1610-1620 and a stop above 1672.75 which was the high from May 27. The MACD’s rolling over and the market is coming off the overbought Bollinger Bands and stands as a sound short trade.
The dollar gained on the euro today with a boost from the noted Case/Shiller home pricing number. As money flowed out of Europe and into the dollar signs of confidence in the economy resonated and economic data continue to improve. This consumer sentiment and hinting from the Fed to ease up on “easing” should perpetuate until another catalyst shows up. I am looking for the Euro to fall through support of 1.28 the low of May and through the 1.275 low from early April. We will follow up on this trade in the near future. In the meantime a stop above the 50 day Moving average @ 1.29775 should be a tight loss.
Dec. Corn traded higher today as predicted from my last post. Excessive rain tore through the mid west spoiling planting plans for the new harvest. http://www.bloomberg.com/news/2013-05-28/corn-climbs-to-three-week-high-as-wet-weather-may-slow-planting.html. I would be looking to exit this trade and profit from an exuberant short term run.
The Dec. Corn MACD indicator has turn upward as the market comes off the oversold Bollinger band. The gap into $5.50 appears to be a low hanging fruit for some upside target pricing. Though the weather in the mid west is always at the forefront for ag pricing, value is always predicated upon price.
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