Beyond the "Spotlight"

The GBE 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:

December 2012 Australian Dollar

The December 2012 Australian Dollar contract closed at 1.0305 below a lower trend line on November 15. There are three touches on the lower trend line at 1.0089 (10/08/12), 1.0191 (10/23/12), and 1.0340 (11/14/12). In the same November 15 trading session the MACD Indicator crossed over to a bearish signal; the Stochastic indicator crossed over earlier in the week. The market is currently trading below a 20 day exponential Moving Average but right at the 50 day Moving Average. The Trend Seeker (a US Chart Company tool to help identify market trend) is still Up. It appears the market will need further downside movement for the trend to flip bearish to confirm a short entry. The ADX is at 14.05 showing signs of a lack of Momentum currently. A break of a support line consisting of lows at 1.0095 (7/27/12), 1.0077 (9/05/12), and 1.0089 (10/08/12) can see prices break the 1.000 level and test the twelve month low of .9545 (6/01/12).

February 2013 Live Cattle

The February 2013 Live Cattle contract is trading within a Pennant Formation. There are two touches on the upper trend line at 133.550 (9/13/12) and 131.750 (10/19/12). There are two touches on the lower trend line at 123.800 (4/27/12) and 128.200 (11/07/12). There is also a near touch at 125.375 (6/27/12). The Trend Seeker (a US Chart Company tool to help identify market trend) has been Down for 17 trading sessions. The MACD and Stochastic indicators are bearish. The futures price is currently below the 20 day exponential moving average and the 50 day Moving Average. In fact, the 50 day Moving Average is grinding along the upper trend line. A close below the lower trend line will trigger an entry to the downside. It appears the market would have to settle at 128.500 currently for that to occur. The seasonal for this market is also bearish. A potential stop loss can be placed above the 20 day exponential moving average at 129.650. Potential downside targets are the June 27th low of 125.375 and the twelve month of 123.800 (4/27/12).

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By: Don DeBartolo

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