How was your weekend? Mine was relaxing and getting ready for next week. I hope everyone had a great one over there.
Alright lets proceed with the upcoming outlook on the market.
S&P 500 Futures - /es
We traded to these following levels this week:
Opened: 1345.25
High: 1357
Low: 1317.50
Closed: 1325.50
Our levels for last week was:
Possible Weekly Upper Range: 1375
Possible Weekly Lower Range: 1270
Last week we mention that it was a tough call on the direction of the market and with all the uncertainty on the macro-economic level, things are more likely to move sideways and a two sided market was likely. Well, I would consider that we were right on all counts. But the down move took a bit of help by the banking downgrade by Moody tho.
We also mention that if price wants to break up, it needs to break and close above the 50s level resistance with conviction which it couldn't for two days and only made a high of 57. With this failure to break above, sellers took the opportunity to sell down with the banking downgrade on Thursday. But you can see that the down move was just a knee jerk reaction to the downgrade as there was no follow through on Friday.
So, what can we look forward to next week?
Lets look at some of the levels.
On the Daily, the 1313 level which is the 200ema should provide some level of support. On the weekly, we have the 50ema on the 1300 level. If the sellers want to take back the initiative of this market, they need to push below these level of 1313-1300 convincingly and close below it for the week.
Personally, I think we are still being caught in a sideways market here. Every sell down would be be held at support while every push up will be contained with resistance. I see us trading within these ranges of 1350 and 1250 for a while more.
But take note that volatility is at about 18.11 as of Friday's close. That basically means that there is not that much fear in the market as of this moment. With the vol so low, the upside probability outweighs the downside, unless, we see more volatility expansion in the coming weeks. So we will follow this closely as well.
Here are the probably ranges for next week:
Possible Weekly Upper Range: 1354 and 1375 should we break up more.
Possible Weekly Lower Range: 1270
Look to our daily morning updates for the latest read on the market.
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Lets move on the the grains.
Soybean Oil
We traded to these levels last week:
Opened: 49.05
High: 51.12
Low: 48.51
Closed: 50.46
Our levels for last week was:
Possible upper weekly range is: 52
Possible lower weekly range is: 47
Alright.. price was trading within our expected range for this week. We expected for price to trade sideways and price is still trading within our expectation. Price also closed below the 50 level at 50.46 although we pulled back quite a bit from the high of 51.12. If you would look at the charts from last week, you would see that the 51.14 resistance horizontal like that I drew on the chart.
On the chart, we are basically trading sideways with attempts to push up but which failed. Seems like the resistance overhead is still quite heavy, don't you think so? With Soybean gaping down last Friday, I am concerned that Soybean Oil's price will be dragged along with it.
When price are trading in a sideways range, it is much harder to predict its movements because the very nature of a sideways range is choppiness. For me, with the week closing with a green bar, I would like to think that price would resume its right to test above resistance.
The resistance to test would be the 51.14, then the 52 levels. If price can break those levels, the third resistance would be at the 52.70 level. On the downside, I think the 48 level should hold if a break down occurs. In any case, I don't think price would break below the 47 level which is the 200ema which I think should hold nicely.
We will follow the price action of this commodity daily for a more accurate and updated readings.
Here are the levels for next wee
Possible upper weekly range is: 52 and 52.70 should we break further.
Possible lower weekly range is: 48.30 and 47 should we break further.
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Soybean Futures
We traded to these following levels last week:
Opened: 1383
High: 1456.50
Low: 1364.50
Closed: 1372.50
Our levels for last week was:
The possible upper weekly range is: 1450
The possible lower weekly range is: 1300
Alright.. price of this commodity also traded within our expectation. We said that the 1450 would be very strong resistance level. Lo and behold, price tested a high of 1456.50 and could not go any further.
Then on Friday, price gaped down big time. We are now trading in the mid level of 1450 and 1300. I still expect price to be choppy within these ranges. So we will let price run its course until a further break out occurs. There really isn't much to read into a sideways market. No interesting story. Just a dull up and down within a range and in this case, the range is 1450 and 1300.
Here are the levels for next week:
The possible upper weekly range is: 1450
The possible lower weekly range is: 1300
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Wheat Futures
We traded to these following levels last week:
Opened: 613.50
High: 700
Low: 612
Closed: 687
Our levels for last week was:
The possible upper weekly range is: 685
The possible lower weekly range is: 585
Wow.. another big green bar in Wheat. But price closed right at the upper triangle trend line although it did briefly trade outside it for a while. In fact, it was a big gap up on Friday due to the Wheat data. I'm just wondering how much further can price continue to push upwards. The last time we closed with a big green bar, we tested the first level of resistance before turning back downwards into the choppy range again.
The levels to break would be the 690 where the upper trend line is. If we can maintain and close next week above this level, then we might have a chance of an upside breakout. If we have a continuation, we might go up to test the 725 level again.
We will see how this commodity performs next week.
Here are the levels for next week:
The possible upper weekly range is: 725
The possible lower weekly range is: 650
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Corn Futures
We traded to these following levels last week:
Opened: 584.75
High: 617
Low: 576.25
Closed: 590.25
Our levels for last week was:
Possible upper weekly range: 640
Possible lower weekly range: 542
The price of this commodity is trading within our range too. Price remains in a sideways market as expected and I think this will continue for a while more.
There isn't much to be read from the charts for now. Prices are just trading within a range and look to continuing to doing that for a while more.
So not much can be derived from it other than following its intra-day price action.
Here are the levels for next week:
Possible upper weekly range: 630
Possible lower weekly range: 542
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See you all in the morning updates! Ciao and good night!
Best Wishes,
Tech Trader
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