Today is really a special day so don't forget to wish all of the women in your lives a great Happy Mother's Day! :)
Alright lets proceed with the weekend update for US market.
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S&P 500 Futures - ES
We traded to these following levels this week:
Opened: 1354
High: 1370.25
Low: 1339.25
Closed: 1350
Our levels posted last week was:
The possible upper weekly range is: 1420
The possible lower weekly range is: 1336
Alright.. so we started the week with Sarkozy losing losing the election which set the tone for the the rest of the down week. We broke down from the flag pattern but price held at the support as well. The low of the week as quite close to our projected low of the week at 1336.
Maybe posting a daily chart would give you a clearer picture of the price action this week.
ES Daily Chart
So this week, we really tried to push down hard.. volume had increased too but we still made no head way. Support seems to still be holding especially when you have the 20ema in the weekly chart at 1339.
What are we forming here? Another flag? Will this be a bearish flag where we break down further after this? Or will we go up a bit to test the 20ema in the daily chart at around the 70-74 area next week?
Well.. We will just have to wait to see what happens. We have to be prepared for both possibilities and the price action could very well be news driven as we are going to have some big numbers coming in the whole of next week with the G8 meeting coming on Friday and Saturday which could throw a wrench into the plans of either the bulls or bears.
But for me, with the inability of price to push down further the whole of last week, I think we might see a grinding week to go back up to test the 20ema if things maintain status quo. But price could get a help with a push in either direction from the numbers coming out midweek such as the FOMC meeting, Building Permits and Unemployment claims numbers so we will be on the lookout for that as well.
Honestly looking at the charts, I think even if we break down, it should just be a low swing and not a catastrophic type of down move because we still have many levels of support below. So nothing to panic to be honest. So we will be following the S&P closely next week for the que to our local market next week.
Here are the projected weekly range:
The possible upper weekly range is: 1385
The possible lower weekly range is: 1328 and an outside chance to 1309 if we break further.
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Lets move on to the CME grains now.
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Soybean Oil Futures
We traded to these following levels this week:
Opened: 53.47
High: 53.97
Low: 52.09
Closed: 52.12
Our levels posted last week was:
The possible upper weekly range is: 55.66
The possible lower weekly range is: 52.00
The low of the week was almost smack on to our projected weekly low at 52.00! This is why we need to try and identify the possible support and resistance areas with the aid of price action and trend lines.
Pretty tough week for the Soybean Oil futures. We broke down further and faster than it took for us to move up a couple if weeks ago. See a coincidence why our FCPO came down too? I hope you do.
We closed the week as a big red bearish bar again and closed at near the low and it is the 5th red weekly close in a row.
We are now trading at near the lower triangle trend line, which should provide some measure of support here at about 51.00. If we break down further, there will still be some levels of support below so I think this would not fall into oblivion yet next week so don't worry.
But I would want to watch these grains closely because all of them seems to be on the downswing path at this moment which includes our FCPO contract. Longs in our FCPO would want to see that these grains hold here and maybe have a technical bounce of some sort and of course, the shorts are having the laugh of their life. :)
So here are the weekly levels:
The possible upper weekly range is: 55
The possible lower weekly range is: 51 and an outside chance to touch 50.30 if we break further.
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Soybean Futures
We traded to these following levels this week:
Opened: 1470.25
High: 1478.75
Low: 1402.50
Closed: 1403.75
Our levels for last week was:
The possible upper weekly range: 1536
The possible lower weekly range: 1420
Last week in our weekly post,we said that if Soybean Futures, being the strongest of all of the grains product we are tracking make a downside break, we should see increased selling in our FCPO too which was the case. The uptrend channel has been broken now and we will have to see which level can break this downside swing for this contract.
Now, if you ask me, I would say that is a very scary looking big red candle bar in the weekly. But after rallying for such a long time, I think a pullback is in order. Price can't maintain its upwards path without some measure of pull backs especially with all the grains also being so weak. The shorts are having a blast at the moment, but even they would have to take profit at some point by buying back the contract which should provide some support for price. I'm not suggesting that would be this week. We will let price action be our guide.
We still have some plenty of support levels for this contract so I think an end of the world fall is not in the cards that's for sure. We will follow the price action for this contract closely as usual and will keep you updated.
Here are the levels for next week:
The possible upper weekly range: 1465
The possible lower weekly range: 1350
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Wheat Futures
We traded to these following levels this week:
Opened: 608.50
High: 621.25
Low: 592.25
Closed: 596.50
Our levels for last week was:
The possible upper weekly range: 655.5
The possible lower weekly range: 576
Alright another bearish close for Wheat Futures. However, the loss was small and the support levels seems to be holding nicely still. The lower flag pattern (thin blue line) is still holding nicely for now and should we break down further, we will still have some support to hold us somewhat. Wheat is still trading within the choppy range and will still be for the foreseeable future. There are no clear cut price trends here at all.
But we will still be following its intraday price action because it can still effect the price of the other grains product which includes our FCPO prices.
Here are the trading levels for next week:
The possible upper weekly range: 655
The possible lower weekly range: 576
If we break 576 and close strongly below that, then a possible downswing is in order. So we will be watching the levels closely.
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Corn Futures
We traded these following levels this week:
Opened: 615.75
High: 632
Low: 572.25
Closed: 581.75
Our levels for last week was:
The possible upper weekly range: 645
The possible lower weekly range: 675
We were quite close with the low of the week at 675 as price made a low of 572.25 briefly before pulling back to close at 581.75
To be honest, I think the Friday's down push in our FCPO started with the really weak close in Corn during Thursday's cash hours trading.
We have now close convincingly outside of the triangle pattern. There will still be some level of support below but if we continue down further, this could be the start of the downside swing in this contract. If this is the case, it will definitely effect the other grains product which includes our FCPO prices. So gonna be tracking this contract closely in the coming days.
Here are the levels for next week:
The possible upper weekly range: 616
The possible lower weekly range: 640
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BONUS!!
Since we are here how, lets look at.... drum roll please.... da da da da taaaa! JP Whale Morgan! Haha.. Just for the fun of it.. :)
Alright so JPM is tanking due to the recent prop trading losses. But I what I want you to see is that this is not the first time JPM has reversed when price reach near $47.50. In fact, it has been doing that since 2007 for almost every single year! How reliable!
If you would look at the top of the shaded area, you will see the $47.50 has always been the resistance point for JPM.
If you had bought a JPM May $40 Put on Wednesday at $0.50 cents for a cheap pot shot, and the news for the London Whale debacle came out on after Cash close on Thursday, your Puts would be worth +500% now at $3.05 per contract.
Pretty cool for a few day's worth of return huh? I have heard of people taking such trades especially closer to expiration.
But the reasonable trade that I might have taken would be the AUG $40 Puts at about $2.20 and the return after Friday would be about 100% as the puts would be worth about $4.40.
100% is alright and not that impossible to be honest. I had Boeing puts made 300% for me during the flash crash in 2010 in 1 day and I had LO calls made me 300% also in two weeks time frame last year.
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Anyway, have a great weekend all. Have a great happy mothers day and get rested for next week.
Ciao!
Best Wishes,
Tech Trader
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