Morning Update 4th April 12

Morning Traders,

New day, fresh start!

Lets begin with a summary of the overseas market.

The Dow closed down -65 points or 0.49% to close at 13,200

The S&P500 closed down -6 points or 0.40% to close at 1,413

The Nasdaq closed down -6 points of 0.20% to close at 3,114

Yesterday's price for the S&P contract did not make a new high. It was an inside bar from Monday's bar. Both Yesterday's and Monday's bar wasn't trend bars and have a bit of a 'doji' look but albeit a larger body.

With the ADP Non-Farm Employment Change and ISM Non-Manufacturing PMI data coming out tonight, I expect price action to be from sideways choppy to slightly downward biased. However, be prepared for the unexpected due to the fact we are at a new high now. The longs will want to lighten their position and take some profit while the sellers will try to assert some control back into the market. But the market may still go up based on sheer enthusiasm from the market participants. We will let price action be our guide.

The levels for today's FKLI April Contract are as per below:

Upper Resistance: 1606.50 and 1611

Lower Support: 1600, 1596, 1593 and 1590

Let price action be your guide. 

For buying scalpers, do not be caught buying the top of a range unless the market is demonstrating sufficient strength to break out. The opposite applies to the short scalpers - do not be caught selling the low of a range unless you believe there will be a break out. Best to wait for confirmation.

I think there will be opportunities for both the longs and shorts. Wait for confirmation before entering your trades. Buyers should be buying where supports are holding and sellers should be selling where resistance are strong enough to hold prices in. Take your profits as you are reaching these support/resistance levels.

All the best. I will update again later when necessary.

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FCPO 

Alright we will start off with the 4 CME grains that we are tracking:

Soybean Oil Future close 55.96 down from 56.16
Soybean Futures close 1415.50 down from 1434.25
Wheat Futures close 658.50 up from 655.75
Corn Futures close 663 down from 665.75

Ok. Soybean Oil and Soybean Futures are still trading at our upper resistance area and unable to break up yet. Wheat and Corn are still consolidating within the smaller triangle. Corn is looking like it wants to test the upper resistance of the smaller triangle while Wheat looks like it still wants to jiggy in the consolidation area (please don't mind the slang). :)

As we have updated in yesterday's closing summary, the candle pattern on the daily chart of the FCPO is called a Bearish Deaisen. You can read all about it from the link above this line.

So what to expect for today's FCPO.

As usual, it is difficult to predict what prices will do. We can only read what the chart tells us, and wait for confirmation when trading begins before placing our trades.

But since Soybean Oil and Soybean Futures can't break through the overhead resistance yet, I favor a downside biased in out FCPO to fill some of the Monday Gaps. I could be wrong so please trade carefully.

The levels I have identified for today are:

Upper resistance: 3566
Lower Resistance: 3510, 3496, 3477, 3450

Whether you are buyers or sellers, the strategy is the same.. Look for support areas to hold if you are a buyer while look for resistance area to hold is you are a seller. The type of entry depends on whether you want a higher risk or a lower risk entry.

I will update again if there are any significant development.

Take care and trade safe all!


Best Regards,
Tech Trader