How are you all doing? I hope all is good and well on your side too! :)
Alright lets do a brief summary and we will then proceed with the upcoming week.
For FKLI, this week we made really some big gains. We held short over the last weekend and Monday we opened and gaped down significantly after we reacted to the US marker closing heavy down. On Tuesday, the market opened higher which caused me to take my profit for the shorts. On Wednesday, I watch the price action and it seemed that price was going to go higher ala Malaysia-boleh style. So I went long and was right. I took profit near the high at the end of the day, then re-enter to establish some overnight longs. On Thursday, we opened significantly higher and I closed my longs profits at 81. We made more than 35 points per contract just for this week alone. On Friday, I tried to short at 66.50 but price could not break 65 level so I closed it at 66 and just sat on hand for the rest of the day. A well deserved rest for a good week. :)
Lets look at the S&P now.
After closing almost heavy down the previous Friday, Monday traded to a spinning top doji sort of pattern which basically pause the decline on the market, which was a good thing in a way. Tuesday we had an up day and closed about 5 points above Monday's high. This was sort of a confirmation that the buyers was still pretty much in the game at this point. Wednesday's rally was a real shocker for everyone. I'm not complaining as I was long in our local market, but still, the amount we rallied gave me a surprised. Thursday traded to another doji as price was not able to close above the 22ema. Friday was a two sided market as futures was down pretty much throughout the whole day in pre-market trading but closed at the high of the day in the end.
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Lets move on to see what's in store for us this week.
S&P 500 futures - /es
We traded to these following levels this week:
Opened: 1275
High: 1329.50
Low: 1262
Closed: 1323
Our levels for last week was:
Possible Weekly Upper Range: 1318
Possible Weekly Lower Range: 1220 and an outside chance to touch 1200.
Alright.. after closing down real heavy last week, this was the largest gaining week in 2012! So almost officially, we have just entered into a sideways market. Last week, I was hoping that price would continue to go down, but also warned that we are fast approaching the consolidation area of last year which would quite a strong support level so price wont be falling through the floor unless there are strong news and reason. You can click here if you haven't read our updates for last week.
So on the weekly chart, you are just going to see the overlapping bars - up one week, down the next and on and on for a month now. We are going to have many events this month including the Greece election so we will be on the look out for that.
On the Monthly chart, you will see that the 22ema is still holding pretty nicely and price is still trading firmly above it.
Now the hardest market to trade in my opinion is a sideways market. The difficulty mostly lies in trying to identify the trading range for the week. Once that is done, and if right, then the jobs becomes easy. In a trading range, you would avoid buying the top and selling the bottom and look to fade these extremes if the support and resistance are holding.
I would be careful going into next week and consider to soh (sit-on-hand) or reduce position size until the trend has been determined and maybe just stick to day trading. It is tough to hold over night in a sideways market so we will see what unfolds and trade accordingly.
Should we push up more, I think the 50ema at around the 1336 to 1350 area should be area of resistance. And if we break down further, there will still be a lot of support levels below with the 1224-1220 being the major ones. I see no clear trend for now and would look to assume we are entering a consolidation phase until a clear signal is given.
So trade safe and look for our daily updates for more info.
Here are the probable range for next week:
Possible Weekly Upper Range: 1355 and a small outside chance to touch 1374 if we have good news.
Possible Weekly Lower Range: 1240 and a small outside chance to test 1220 should we break down further.
p/s: It feels kind of hard to pin-points the range for a sideways market so I'm giving a larger range for us to work with. Please look at our morning updates for the updated outlook on the market.
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Soybean Oil Futures
We traded to these following levels this week:
Opened: 48.91
High: 50.39
Low: 47.81
Closed: 49.42
Our levels for last week was:
Possible upper weekly range is: 51
Possible lower weekly range is: 47 and an outside chance to touch 45 should we break further.
Price for this contract traded between our projected range for this week. Last week we mention that we already had 8 weeks worth of red bars and according to Fibs theory, the next bar has a high probability of being a green one and halt the decline although the trend was clearly down. Well, surprise surprise! We did in fact have a green bar! haha.. The credit goes to Mr Fibonacci's theory and Mr Conrad for teaching it to us in that candle stick class.
Alright lets get back to the serious stuff. Last week we mention that the 48.30 levels is very crucial and the buyers will need to defend this level if they want price to stop decline. On Monday and Tuesday, we traded at that level for a long time and was able to push away from it decisively on Wednesday to test the upper resistance. We continued to push up to test the 50.34 resistance on the chart but could not over come it and subsequently pulled back on Friday to close at 49.42.
Now, what I want to indicate here is that, although we pushed up significantly and broke the down trend line, but pulled back to close below the trend line, that very act of pushing above was a very good statement by the buyers that they are still in the game at this point.
I think there is the possibility that buyers are going to start coming back from here on to give the sellers a good fight. With Soybean rallying hard last week, that is going to give this commodity an upside pull as well. It still remains to be seen how committed the buyers are and if the sellers are still in control of this market here. We will follow this commodity closely as the price changes will effect our FCPO also.
I would like to see if price can go back up to test the 52 area and close somewhere above the 50s preferably. If yes, that would be a positive development for the longs and hopefully, for our FCPO longs too. Should we break down further, the 200ema will give some measure of support.
Here are the levels for next week:
Possible upper weekly range is: 52
Possible lower weekly range is: 47
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Soybean Futures
We traded to these following levels last week:
Opened: 1350
High: 1439
Low: 1331.50
Closed: 1425
Our levels last week was:
The possible upper weekly range is: 1415
The possible lower weekly range is: 1300 and an outside chance to touch 1275 should we break further.
Alright.. Wow.. This commodity really performed really well beyond our expectation. The high of the week went way above the 1415 we were looking at.
Last week, we mention that there will be support levels below so all was not lost. We also talk about the possibility of price bouncing and trading between the 1450-1300 range in the coming days. So here we are. We are very close to the 1450 area already.
But I want to highlight that price close at 1425, which is just right outside of the upper triangle pattern which is about the 1415 level which is also a resistance area. Price needs to remain above this level if it is to retest the recent highs. A failure to remain above this level could see things deteriorate once again.
I'm looking to see if price can test the 1450 level and if yes, if it can retest the 1480 level. I'm hoping for a strong performance in this commodity so that it can also pull up the prices of the other grains product.
I'm going to give a larger range for this week as things are at a transition phase so it is not as easy to determine the trading range.
Please look at our daily morning updates for more accurate daily outlook if there are significant movements.
Here are the trading levels for next week:
The possible upper weekly range is: 1480
The possible lower weekly range is: 1330
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Wheat Futures
We traded to these following levels this week:
Opened: 620.25
High: 644.75
Low: 611.75
Closed: 629
Our trading levels for last week was:
The possible upper weekly range is: 690
The possible lower weekly range is: 591 and an outside chance to touch 576
Price for wheat traded within our weekly range, which basically means that price did nothing and is still trading within the choppy zone. And it seems likely to continue doing that for a while more until there is a decisive break out from this choppy zone. You can just tell by looking at all the overlapping bars in the chart above.
So not much indication can be derived for this commodity other than using it for intra-day indication.
I see prices to remain in this chop zone for a while more. If we break down further, I think the support levels will hold and if we break up, the resistance above will likely hold too.
So, nothing much here.
Here are the levels for next week:
The possible upper weekly range is: 680
The possible lower weekly range is: 591
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Corn Futures
We traded to these levels last week:
Opened: 560.25
High: 605.50
Low: 557.75
Closed: 597.75
Our levels for last week was:
Possible upper weekly range: 635
Possible lower weekly range: 529-519 area and 507 should we break down further.
Alright.. price of corn halted its decline after breaking down from the recent lows. We bounced back into the choppy range above once again. Take note that we are still trading below the triangle pattern.
I'm hoping that Soybean would perform strongly so that it can pull this contract and also Soybean Oil up too which will also caused FCPO to bounce back up.
This week's up move in Corn was a welcomed one because a further decline would just make things worst for all grains product generally.
So we will follow this contract closely and see how it unfolds next week.
Here are the levels for next week:
Possible upper weekly range: 640 and an outside chance to touch 660 if we rally further.
Possible lower weekly range: 542
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Wow.. what a tough week to read the chart. There are just no clear cut trends so it feels like things are going to move sideways for a bit which will mean a two sided trading.
So trade safe and we will keep you updated should there be any big movements.
Take care and see you in the morning updates.
Best Wishes,
Tech Trader
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