Sunday 6 May 2012

Weekend Updates - 7-11 May 2012


Good evening traders,

How was all your weekend? I hope everyone had a great weekend and rested for the up coming week.

Lets get started by looking at the week ahead.

Looks like we are going to have an interesting week to trade starting with tomorrow! On Monday, Tuesday and Wednesday, there will be no significant report on the schedule so expect to have nice trading ranges! On Thursday we have Trade Balance, Unemployment Claims and Old boy Bernanke speaking and on Friday, we will have Producer Price Index and Prelim Consumer Sentiment.

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Lets start by looking at the S&P futures contract.


Alright the S&P futures traded to these following levels:

Opened: 1400.25
High: 1411.75
Low: 1361.50
Closed: 1362.50

Our levels for posted on last weekend's update was:


The possible upper weekly range is: 1420
The possible lower weekly range is: 1354

Wow.. what a week.. we closed the week as a big red bearish bar. To be honest, all these are just overlapping bars. This means that most of the traded range for this week was within the same range for last week. And if we look at a bigger picture, the S&P have been trading at this upper range of 1420 and 1354 for more than 2 months already. Things are getting 'frothy' at the top.

You could say that this is sort of a consolidation or even a distribution phase. If we have more great news coming out from the wires, maybe, just a small maybe, we will continue this up trend. But by the looks of it, if we do break out from here, it seems likely it would be to the down side. And it looks like its gonna be a hard one once it breaks. 

We made a higher high from last week but it didn't last as price touched 1411.75 and pulled back from there and Friday's disappointing numbers just send the market plunging.

So effectively, we are back trading into the flag pattern of the past 3 weeks. Because we are still trading within a range, there is a possibility we might chop back up again this week as that is the nature of consolidation. But the longer this consolidation/distribution phase wears on, then closer it feels that the breakout is gonna come anytime soon.

In the weekly, we are still trading above the 20ema but even this line is slowly starting to catch up with the price action and moving steadily closer. As long as we are still trading above the 20ema on the weekly, we will assume the general trend is still up. But once we close below it conclusively, and break all the current holding support, I think we are looking at a hard downside swing. So its good news for me coz I'm still looking for a place to swing a short for our local FKLI contract. :)

So as we are still trading within the range in the weekly, it is hard to say where we will go from here until the actual breakout. We will trade according to the daily price action and support and resistance levels. I was talking with a few trader friends in the US and we were discussing about how May have a tendency to be a bearish month. So, trade carefully and get the latest updates here every day.

Here are the levels for this week:

The possible upper weekly range is: 1420
The possible lower weekly range is: 1336

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Lets move on to the CME grains.

Soybean Oil Futures


Soybean Oil Futures traded to these following levels:

Opened 55.47
High: 55.66
Low: 53.41
Closed:53.57

Our trading levels last week was:

The possible upper weekly range is: 57.50
The possible lower weekly range is: 55.20 and an outside chance of reaching 54.80.

What a bearish candle! Look like our FCPO chart, doesn't it?

Soybean Oil was consolidating in a small bar last week and we finally broke out on the downside hard! We broke several support and also closed below the 20ema. In the past few weeks, this contract was one of the two which was still holding up, but it seems that the bearish momentum has finally caught up with it too along with its two other bearish sister contracts namely Wheat and Corn.

So now we are trading below the 20ema. We will have to see if the 20ema can keep the price of this contract up. If price can't hold and we break down lower, and drag down the price of Soybean too, then our local FCPO will be seeing downside movements too!

We are still trading within the triangle pattern so even if we have a break below, the lower triangle trend line should hold. So at least there will be some support still.

I can't seem to put my finger on how we will do next week. On the chart, things look really bearish in this contract. So I will be posting a wider range this week. I will update again on the daily morning updates if there are any significant development.

Here are the ranges for this week.

The possible upper weekly range is: 55.66
The possible lower weekly range is: 52.00

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Soybean Futures


Soybean Futures traded to these following levels:

Opened: 1490.25
High: 1512.50
Low: 1458
Closed: 1478

Our levels posted last week was:

The possible upper weekly range: 1525
The possible lower weekly range: 1437

This contract traded within our expected range. We closed the week as a bearish spinning top overlapping bar. However, we are still trading within the up channel. We did make a new high this week but it did not last. The price of this contract was not spared from the bearish momentum although the damage done was minimal.

We are still trading above the 20ema in the weekly and daily chart and the upward channel is still holding nicely. However, it will be interesting to see how we will trade next week. Soybean is the only one of all the 4 CME grains futures that we are tracking which is still strong and holding nicely on top. So in a sense, this contract is still holding everything together for all the grains including our FCPO. Should this contract make a break for it on the downside, I think we will see increased selling on all the grains including our FCPO.

Here are the levels for next week.

The possible upper weekly range: 1536
The possible lower weekly range: 1420

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Wheat Futures


Wheat Futures traded to these following levels:

Opened: 648
High: 655.5
Low: 599.5
Closed: 608.75

Our levels posted last week was:

The possible upper weekly range: 670
The possible lower weekly range: 650  

Looks like Wheat is continuing on its bearish path. We traded through the lower triangle trend line with ease but luckily the lower flag pattern held nicely. We have now closed outside of the lower triangle pattern finally for the first time. This in itself is quite a bearish indication. Wheat have been pounding on the support a few times already in recent weeks. So far, support has been holding still. Should we break down further, we should see some support at 591 and 576.

Wheat and Corn has been the weakest of the grains futures that we are tracking and now it has been joined with another of its sister contract which is the Soybean Oil Futures. If these 3 contracts continue to be bearish, it is inevitable that Soybean and our FCPO would be effected as well.

So we will be tracking these few contracts closely and I will keep updated if there are any significant movements.

Here are levels for next week:

The possible upper weekly range: 655.5
The possible lower weekly range: 576

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Corn Futures


Corn Futures traded to the following levels last week:

Opened: 625
High: 634.75
Low: 604
Closed: 619.5

Our levels posted last week was:


The possible upper weekly range: 665
The possible lower weekly range: 605

Corn closed as a spinning top candle bar too last week. We remain trading outside of the triangle pattern at the lower range. We did make a higher high and a higher low though. Corn was the weakest among 4 of the grains that we are tracking so this week's price action was an improvement.

Basically, most of the price action this week was just within the ranges of last two week except of the high we made. This indicates a consolidation and a flag pattern on a bigger time frame. So, it remains to be seen if we can break upside and close back into the triangle pattern or will we break down further.

Price of Corn will remain choppy along with Wheat too. We will follow its price action closely in any case.

Here are the levels for next week:

The possible upper weekly range: 645
The possible lower weekly range: 675

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We will be following these grains product closely as it has a high correlation with our FCPO price. I will update the weekly ranges for our local market tomorrow morning.

Have a good rest and see you all in the morning updates tomorrow!

Ciao! :)

Best Wishes,
Tech Trader  





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