One of the things that I learned from him is to identify the levels on the charts especially the weekly possible range during our free and quiet time like the weekend..
So in following the practice, I will post some weekly charts of the grains and index and identify some of the probably range by using trend lines and patterns.. if you see anything that needs changing, you are more than welcome to leave a comment for me.. Thanks!
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Ok Lets start of with the S&P500 futures emini chart - Ticker ES. While some people still prefer to use the Dow Jones Index, a lot of people are now switching to the S&P500 index as a better representation of the market as a whole. The Dow Jones Index only represent 30 large industrial corporation while the S&P500 represents 500 corporations which is why most believe the latter to be a better indication of the market sentiment as it aims to represent the whole stock market.
But if you really look at the charts, whether it is the S&P500, Dow Jones Index, Nasdaq, or even the Russel, they all look pretty much the same with slight differences in the daily closing. So if you fancy, you can draw up the support and resistance in your own platform anytime you like.
As a prudent trader, I have all of these indexes up on my charts the whole time as sometimes one of the indices could move ahead first giving some hints to the direction of the market. It is up to you as a trader to decipher the information before you and identify the possible levels of support and resistance before placing a trade.
The pink lines are the trend lines drawn across various points which I think is important. Since the beginning of the year, we have been in an up trend and have form sort of a channel going up. The possible range which I identify would be from 1375 to 1425. The area was a point of consolidation back in April-June 2008 and would most likely be a point of resistance for the market.
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Ok, the next chart we have the Soybean Oil Futures. The uptrend channel is still intact but we seem to be coming into an area of resistance as highlighted by the dark rectangle shadow in the early part of 2010. Possible weekly range from 54 to 57. The grains traded on the CME have quite a high co-relations to our local crude palm oil futures during trading hours.
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Next we look at the chart of the Soybean Futures. This contract tend to move in tandem with the Soybean Oil Futures, hence, price action will also likely affect the price of our FCPO. Possible range for the week is 1339 to 1420. Take note of the two yellow channel drawn across the price action showing consolidation during the first half of 2010. The uptrend for the Soybean futures should still be intact but we are quickly coming into the upper trend line acting as resistance. I think price would be choppy within the yellow channel in the coming days until we have a strong breakout in either direction in the coming days.
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The Wheat Futures is actually now within a triangle formation and within it, another smaller triangle where we are trading now. The possible weekly range for this contract between 637 to 674 which is within the smaller triangle pattern. A break out from this patten would then meet further levels of resistance and support as represented by the main triangle trend lines.
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And lastly, we will look at the Corn Futures. The possible weekly range for this contract is 640 and 700. We actually had a breakout from the 665 levels last week but pulled back again into the consolidation area as represented by the latest red bar. This could be construed as a head fake, tempting traders into long position and then pulling back again hitting stop losses and accelerating the downward push. But I think the upward pressure is still intact. The other grains futures are also demonstrating good upward momentum so my bias is still to the long side. If prices were to break down, it should find some area of support at around 623 where the lower major trend line is.
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Ok that's about if from the other grains and index that could affect our local FCPO and FKLI futures. I will post an update on our local chart tomorrow morning with the relevant levels.
Wishing everyone a great and relaxing weekend!
Regards,
Tech Trader
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