September 2012 Euro Currency
The September 2012 Euro Currency contract lows are trading along a lower trend line, touching at 1.2051 (7/24/12), 1.2140 (8/02/12), and 1.2258 (8/16/12). A close below the lower trend line will trigger a sell entry. It appears the market will need to settle at 1.2280 or lower for confirmation of a breakout. The Trend Seeker (a GBE trading tool) confirms the market is in a down trend. The 50 day moving average (1.2387) is just above recent highs which could act as resistance and a natural level for stop losses. A short term target could be the 1.2051 low from 7/24/12. The stochastic indicator crossed over to sell signal and MACD is converging. These indicators may fall in line once the breakout occurs.
November 2012 Soybeans
The November 2012 Soybean market has been range bound for about thirty days following the drought induced rally. The current range has established a Pennant Formation with touches to the upside at 1691’4 (7/23/12) and 1668’0 (8/10/12) and to the downside at 1536’0 (7/25/12) and 1555’2 (8/08/12). Ideally for a stronger formation there will be future touches on both the upper and lower trend lines. The Trend Seeker shows the market is still in an uptrend. That being said a close above the upper trend line would trigger a buy entry. It appears the market will need to settle at 1660’0 or higher for confirmation of a breakout. A 50% retracement of the Pennant Formation would be at 1613’4, which falls below recent lows, and an ideal stop loss placement. MACD, just like the range bound market, is undecided at this time.
November 2012 Canola
The November 2012 Canola contract highs are trading along a downward sloping trend line, touching at 645.7 (7/20/12), 633.0 (7/03/12), 620.0 (8/10/12), and 613.0 (8/17/12). Discounting the trading session on August 8, since the market broke below recent support only to close 3.4 points higher, we have a Flat Bottom Triangle formation. A close above the upper trend line will trigger a buy entry. It appears the market will need to settle at 611.5 or higher for confirmation of a breakout. The Trend Seeker confirms the market is in a uptrend. Stop losses could be placed below the support line just below the 600.0 price level. The upside target could be the twelve month contract high of 645.7 (7/20/12). The stochastic indicator crossed over to bullish.
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 â€œLIMIT MOVEâ€, IT MAY BE IMPOSSIBLE TO EXECUTE A STOP LOSS ORDER.
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By: Don DeBartolo