Futures and options trading contain substantial risk of loss and may not be suitable for all investors.
We realize we haven’t sent a tweet or posted a blog all week and there is an explanation. We will be taking a hiatus for awhile from our brokerage business and our commentaries. It’s been a great deal of fun and we have met a number of good people along the way. We appreciate everyone’s participation and the encouragement we have received.
Good trading and the very best to all.
Futures and options trading contain substantial risk of loss and may not be suitable for all investors.
We are taking a quick look at the Crude Oil market today as a level of support stood out rather easily. We are wondering, and thought we would provide, what a possible level of resistance might now be consistent with the Fibonacci retracement price barometer.
On the fall from the 8445 high in the March Crude of January 11 it has stopped so far at 7401. The .618 Fibonacci support using the 6746 low of September 25 we have calculated as 6395.
If this low should hold and a recovery ensues the half way back or .500 Fibonacci resistance comes to 7923 according to our math. This may be a reasonable price level to expect resistance to form. If it proceeds higher the .618 retracement, using the parameters of 8445 high and 7401 low, comes to 8046.
Weather at least here in the Midwest is expected to become colder during the course of the week. This had been an excuse for the last leg of the rally and perhaps will serve the same purpose now.
As always there are different ways to utilize trading tools. We always suggest using them in a way with which you are most comfortable.
Good trading to all!!
Jeff
CB&S
Futures and options trading contain substantial risk of loss and may not be suitable for all investors.
Yesterday we looked at the Dow Jones Industrials and today we are highlighting the cash S&P 500. The reasons are obvious. The stock market has sold off considerably from its high and this usually draws a great deal of interest and concern from most all investors as well as those who don’t even invest. In the grander scheme of things there may be consequences felt by everyone when there are significant moves made in the stock market.
The chart above illustrates that the major uptrend line connecting the March and July lows had already been broken some time ago. We showed previously that this had just occurred in the Dow Jones. The S&P 500 has now also closed beneath its 50 day moving average, another barometer to gauge the market.
We have displayed a set of Fibonacci retracement levels which show that the price has reached a .500 mark at approximately 109030 with the .618 at approximately107600. This particular retracement level lined up with what looks to us to be a minor line of support. This may provide a price from where at least a “dead cat” bounce will take place. And possibly it will turn out to be more. But our stronger feeling is that momentum has turned to the downside and that this set of Fibonacci retracements will eventually all be exceeded and we will find lower levels to pursue. We will do our best to be timely in providing where these are.
Our Trade Focus has seen the first of suggested short entry approaches initiated with more to come if the downward move continues. Let us know if you are interested.
Good trading to all!!
Jeff
CB&S
Futures and options trading contain substantial risk of loss and may not be suitable for all investors.
This is a redo of the previous blog but with the correct chart. There isn't much difference and our point remains the same however we felt more comfortable with the chart we had prepared for this blog spot.
It looks to us that today is a very important day for the technical condition of the stock market. We provide above the daily chart of the cash Dow Jones Industrials. We don’t think it necessary to go too far into detail. We believe that there are a few points of major significance that simply need to be noted.
The 50 day moving average at yesterday’s close we show as 10445.80. A key low in the Dow was made December 31 at 10423.10. And finally the major up trend beginning with the March low and joined with the July low comes in today at approximately 10570.00. The Dow, currently at 10415.70 as we write, puts all these key levels in jeopardy.
We’d be very interested in additional thoughts, comments, observations and approaches to this UNFOLDING market situation.
Good trading to all
Jeff
CB&S
Futures and options trading contain substantial risk of loss and may not be suitable for all investors.
It looks to us that today is a very important day for the technical condition of the stock market. We provide above the daily chart of the cash Dow Jones Industrials. We don’t think it necessary to go too far into detail. We believe that there are a few points of major significance that simply need to be noted.
The 50 day moving average at yesterday’s close we show as 10445.80. A key low in the Dow was made December 31 at 10423.10. And finally the major up trend beginning with the March low and joined with the July low comes in today at approximately 10570.00. The Dow, currently at 10415.70 as we write, puts all these key levels in jeopardy.
We’d be very interested in additional thoughts, comments, observations and approaches to this UNFOLDING market situation.
Good trading to all
Jeff
CB&S
Futures and options trading contain substantial risk of loss and may not be suitable for all investors.
I wanted to provide an explanation as to why this blog space has not been updated for the past number of days. There was a death in the family and I needed to help tend to the matters associated with that.
The chart above is a daily March Euro Currency. The Euro has fallen precipitously from its high versus the U.S. Dollar since its November and December highs. Today’s action appears to have kicked off a new leg to the downside.
The news events surrounding this are continued questions over the debt of Greece plus other “Euro Nations” and also reaction to the daily economic news items of U.S. Housing Starts, PPI and earnings announcements from a number of the U.S. Banks. There was also the Massachusetts Senatorial election to digest. A Republican actually won in that state, filling that left open by the death of Senator Edward Kennedy some months ago.
Perhaps as important as any of the already mentioned news items was more out of China regarding the head of banking regulation requesting banks to stop lending money until the end of the month. This has created what is turning out to be a flight to safety or quality in the U.S. Dollar and hurting commodities of all sorts and currencies of other nations. Metals too are under a great deal of pressure with Gold down $30.00 per ounce and Silver down 90 cents per ounce.
Back to the chart above, I have included the Fibonacci extension targets which show the .618 extension at approximately 14008 and the .750 at approximately 13886. These may be reasonable price objectives to look for in the relatively near term picture.
If anyone would care to add anything or comment on what is looking to be an important day in the markets please do so. As we conclude this the Dow Jones Industrials, which hasn’t been mentioned, are roughly 160 points lower on the day.
Good trading to all
Jeff
CB&S
Futures and options trading contain substantial risk of loss and may not be suitable for all investors.
We thought these weekly Crude Oil and RBOB Gasoline charts were very worth noting. Both are exhibiting weekly reversal potential and in the case of the RBOB one that may be more of the sweeping variety.
Also of significance are the Fibonacci retracement levels. In the case of the RBOB its high so far is almost right on the .500 line. And what adds to the significance or perhaps the potential significance, is that from that level the price appears to be halting abruptly and reversing course. For the Crude Oil it may be a sign of relative weakness as compared to the RBOB Gasoline in that it is showing signs of failing from a price level far shorter of the .500 retracement.
These are situations that may provide substantial trade opportunities and we thought you should know. Anyone interested in further discussion can give us a shout. We’d be happy to hear from you.
Good trading to all
Jeff
CB&S
Futures and options trading contain substantial risk of loss and may not be suitable for all investors.
The chart above is a daily CASH NASDAQ COMPOSITE.
What appears of interest here is that yesterday saw a new high for the move with a lower close recorded. Perhaps more importantly is that today’s trading range has left a gap beneath the low of yesterday trading range. This may be an indication of an impending correction. As can be seen there were gaps left on the chart while the market was moving up. Following yesterday’s reversal bar this small gap may hold a much larger significance. We will likely be finding out rather soon.
Of other interest is action in many of the other markets. Gold was down more than $20.00 per ounce, Silver down more than 40 cents per ounce, crude oil down roughly 200 points and the grain markets under great pressure with Corn down the 30 cent per bushel daily permissible limit following release of the January USDA Crop Report
Earlier in the day we sent out charts to our email list of a number of markets displaying similar traits. Gold and the Euro Currency, for example, illustrated where the recent highs corresponded to key Fibonacci resistance levels and where, like the NASDAQ Composite above, others such as Copper displayed daily reversal bars in very recent trading sessions.
We will soon find out if this was a one day wonder Tuesday reversal day or if there is greater cause to believe a substantial correction to these many up trends is in process. We suggest everyone stay tuned as this could become very interesting. We will share any measuring implications as soon as we can discern.
Good trading to all
Jeff
CB&S
Futures and options trading contain substantial risk of loss and may not be suitable for all investors.
The purpose of today’s chart and blog is to show that the U.S. Dollar Index has reached the first of the significant Fibonacci retracement levels. The chart above depicts the spot U.S. Dollar Index and the levels we find most important to be aware of concerning Fibonacci retracements. Those prices are approx.: 7681; 7630; 7580.45. They represent the .382, .500 and .618 Fib retracement levels as calculated from the November 26 low of 7417 to the December 22 high of 7844.9.
Traders believing, for example, that the U.S. Dollar has potential to move higher versus the basket of other currencies may want to use these price levels to help determine when or how to initiate positions.
Fibonacci retracement levels can also be determined for the various other currencies such as the Euro Currency for example. Some market participants might prefer this if their opinion or analysis suggests that one such as the Euro might perform particularly weak as compared to the U.S. Dollar over a certain period of time.
This is something that we frequently discuss and strategize with our clients. If interested in finding out more from us please send an email or call. Our Trade Focus is also available by weekly email. Sign-up is available through this blog as well.
Good trading to all
Jeff
CB&S
Futures and options trading contain substantial risk of loss and may not be suitable for all investors.
The chart above is a daily Comex / Globex March Silver with 50 day moving average and fib retracement. Chart by CQG.
This morning we sent a tweet that said March Silver futures had reached the .500 Fibonacci retracement level and that our underlying technical indicators suggested to us that the market might find resistance there. It did not.
The .500 level was 1813.25. The next important retracement level is the .618 Fib which comes to 1845.523.
The U.S. Dollar remains a factor as well as the stock indices. The intermediate term underlying technical condition appears quite overbought. This condition, however, does not show up at the daily level. In fact, although not completely positive, they are nearing a cross over into what we consider a positive position.
The longer term basis weekly data actually shows our underlying technicals as being in negative territory. This would help support the view that this upward price movement is corrective in nature.
Good trading to all
Jeff
CB&S
Futures and options trading contain substantial risk of loss and may not be suitable for all investors.
We have taken a number of questions already this week concerning Gold. We thought it appropriate, then, to make mention of it in our blog today. We also are very appreciative for being provided with the subject matter.
We will keep it simple as best we can. Simple, is good!
The first thing that we will point out is that Gold finished the month of December making a monthly reversal. It made a new high for its move while reversing and closing lower than the previous month. We also notice that the size of the monthly bars for both November and December were nearly identical in size. November’s range spanned $152.80 and December’s $151.40. We might consider this as a variation of the double bar reversal pattern.
There have been other monthly reversal bars that did not result in much of a follow through move such as the reversal bar high in June 2009. But both July of 2008 and March of 2008 produced monthly reversal bars which were part of the move that took the price from its March 2008 high of 1033.90 to the October 2008 low of 681.00.(basis monthly continuation data).
We are not predicting the same as the 2008 scenario, necessarily, but we do find significance to this occurrence. Other factors that help sway us to a more bearish than bullish attitude is the structure of its pattern to the highs and that everybody and his brother was bullish at the high and touting the long side (allegedly). Finally, it appears to us that the move since the December 22 low is corrective in its composition rather than the restart of the bull. This though, can change easily and quickly.
The other point that needs to be made is that the December 22 low was an approximate .618 Fibonacci retracement off the highs when measured using the significant September 2009 low. This gives it potential as a key support level.
The U.S. Dollar may play a role in the direction of Gold too and we suggest staying aware of its whereabouts and its trading pattern if and when making trading decisions for Gold.
Good trading all
Jeff
CB&S
Futures and options trading contain substantial risk of loss and may not be suitable for all investors.
There’s no denying; stocks start 2010 with a bang.
NASDAQ Composite actually gapped above the range of 2009’s last session on Thursday. And Thursday was a fairly sizable downside day closing 22 points lower from the previous settlement.
The NASDAQ 100 appears to have clearly broken out of a channel providing a measuring implication to slightly above 2000. Currently the NASDAQ 100 is trading 1885 which is 24.69 points higher on the day. Unless there is a quick reversal of direction this pattern suggests higher prices sooner rather than later. A good tip off to that type of reversal would be either a classic reversal with a new high and lower close or we would accept a move and close back into the channel. These may be worth looking out for.
We have been reminded during the course of the day that last year the first trading session of 2009 saw the Dow gain 3 percent only to end January with an almost 9 percent loss. Along with that we have been made aware of how the first three days of January plots the course for the entire year.
But we need to remind everyone that last year is last year. This is now and we must caution against replica trading. Certainly there can be similarities and there are and can be tendencies and seasonalities but today is today with its own unique set of circumstances. Remain disciplined always. Be careful not to trade blindly on previous occurrences.
Keep your seat belts on because we may be heading into some turbulence.
Good trading to all
Jeff
CB&S
