Chart of The Week - Corn to Move Higher

By: Chris Wilkinson of

Corn has been in an upward trend since it put in its lows at the beginning of October. From there the chart has traded a series of measured Fibonacci levels all the way into profit targets each time. Last week's correction brings us right at the next Fibonacci sequence to take a long position and stick with this trend.

For a review of the previous Fibonacci sequence that traded into profit targets we draw the Fib tool from the lows of November 19th (362.5) up to November 28th highs (393.75). With this drawn you can see the market pulled back and found support right on the 50% level and traded directly into its first and second profit targets, the -23.6% Fib level and the -61.8% Fib level. See the Chart below.

4 Hour Chart Corn

Now that the previous move has corrected we continue to draw the next series until we get to one that fails the 61.8% level. A failure happens when we get a strong close on a large time candle. An hourly close or higher is sufficient to call it a failure. Normally smaller time frames will trade back and forth around those levels so I look to larger time frames for confirmation. If a failure happens it is assumed the trend is over and the next one begins in the opposite direction.

The next move found by using the Fibonacci tool is drawn from the support of the previous move. We use the lows of December 3rd (377.25) and draw it all the way up to the new highs on December 29th (417). See Chart Below. Continue reading "Chart of The Week - Corn to Move Higher"

Gold Is Setting Up For a Short

By: Chris Wilkinson of

The overall fundamental theme for gold is still bearish. With the dollar rallying and commodities being dollar denominated, all else being equal, the price of commodities should decrease. The market looks to be pricing in low inflation to come and gold is used as an inflationary hedge. This is a bearish fundamental factor.

What we saw last week was very opportunistic upward movement that is helping set up the much larger downward trend that I foresee coming. The cash injections from the ECB and China should be short lived as the market will once again see these central banking efforts will not have a large impact on global inflationary numbers. Let’s look at the charts to plan our trade.

Continue reading "Gold Is Setting Up For a Short"

How To Find the Dips In A Trending Market

How do you trade a market that slips further and further from a level that looked attractive before it was too late? It's going, going, gone... Or how about seeing those monster moves and saying to yourself, "market order now or I will miss it", and so you do, and then you get torn to shreds.

The question then is, how do you avoid missing a large move without getting your head ripped off in a reversal. The answer is simple, trade the way a professional trades and you won't get caught in any traps. A professional has a disciplined approach with a strategy that suits their own trading style and account size which allows those trades to come to them so they will never feel like they are missing anything.

If you are one of those who is unsure of their strategy and is currently sitting on the sidelines watching the e-mini S&P futures continue its grind higher consider this. You missed over 180 points in returns from a very simple fib strategy and the move might be coming to end soon.

Here is what you missed after we got the bounce on October 16th: 10 point stop for all

1. Buy 1872.75 Sell 1899.50 + 26.75
2. Buy 1888.50 Sell 1912.00 + 23.50
3. Buy 1924.25 Sell 1953.00 + 28.75
4. Buy 1938.25 Sell 1964.75 + 26.50
5. Buy 1948.75 Sell 1973.75 + 25.00
6. Buy 1965.25 Sell 1995.25 + 30.00
7. Buy 2002.50 Sell 2026.00 + 23.50
Total= +184.00

Here is what to look for now: Continue reading "How To Find the Dips In A Trending Market"

Chart of The Week - E-Mini S&P 500

Each Week will be providing us a chart of the week as analyzed by a member of their team. We hope that you enjoy and learn from this new feature.

The major US stock indices pushed into record high territory late last week ahead of the start of the second quarter earnings season. To start this week, we see equity markets on a lower track following strong US economic data last week. Japan and European shares underwent profit taking, and with a relatively light US economic calendar ahead of the release of Wednesday’s FOMC minutes, we may see a round of profit-taking following last week’s record high print.

Friday, July 4th, saw a consolidation within the previous day’s range with light holiday volume after the 7 previous sessions had finished in the green. As we open the week on a bearish note, I would look to be a seller in the September E-mini S&P 500 just below Friday’s low of 1973.50 or better. My downside objective would be just above the underlying long-term trend-line at 1950. I would place a protective stop-loss order just above Friday’s high print at 1978.00. Should the market follow through to the downside, I would roll my stop order behind the position accordingly. Continue reading "Chart of The Week - E-Mini S&P 500"

Chart of The Week - E-Mini S&P 500

Each Week will be providing us a chart of the week as analyzed by a member of their team. We hope that you enjoy and learn from this new feature.

As we start the week our attention turns to the September E-Mini S&P 500 (CME:ES.U14.E) as it looks to extend a 6 day winning streak. US equities have benefited from the dovish and accommodative tone from the FED last week. Existing home sales and manufacturing PMI data have added an additional boost to the market this morning. Coupled with last week’s support, the path of least resistance in the S&P 500 is a move higher. The primary concern that could spark profit taking in this market are the geopolitical risks surrounding the conflict in Iraq which has given early strength to the Crude Oil market.

As we turn to the chart, last week we saw a breakout of a consolidation pattern in an overall strong bull trend last Wednesday, June 18. Since the breakout from this consolidation, the market has legged decisively higher to put in new all time high levels to close out last week. The market put in a new high print in the overnight session of 1959.75 and I expect this bullish momentum to continue this week. Continue reading "Chart of The Week - E-Mini S&P 500"