Morning Update - 5th April 2012

Morning Traders,

Lets start off by reviewing the US market.

The Dow closed down -125 points or 0.95% to close at 13,075
The S&P500 closed down -14 points or 1.02% to close at 1,399

The Nasdaq closed down -45 points of 1.46% to close at 3,068

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Wow.. what a big pull back. Last night the US reacted negatively to the economic data being released and the S&P contract pullback all the way to support at 1389s. Now we are back trading at 1393.50, which is still somewhere near the lower range of the trade. However, we have some support around this area of 93, 91 (20ema)  and 80. As highlighted in our weekly update, the weekly price should not close below 80 or we might be looking at a substantial pullback.

As of now, I am taking this in as a healthy pullback swing.

Whats in store for us:

Looks like we are in for an interesting ride today huh? Alright.. First off, I think I made a mistake in the weekly update by stating that there are no economic data being released today in the US. There is actually Unemployment Claims tonight and a host of other in the UK and Canada. The forecast for the Unemployment Claims is actually slightly positive but it remains to be seen what the actual number is at 8.30pm tonight.

After making a new highs, and closing Tuesday's high as sort of a gravestone doji look of bar, we pulled back a fair bit of the gains and just stop right at the trend line. Now this is definitely not a reversal if some of the anxious bears are waiting for. Not yet anyway. We still have some major support to break through for that.

But as for now, I think we will trade from a choppy range to a slightly downside bias day to test the support.

Here are the levels for today:

April FKLI levels:

Upper Resistance: 1595 and 1603

Lower Support: 1588, 1585, 1580

I will be more incline to be on the sell side today as I prefer to be riding the trend. However, I think we might have already gap down a bit during open and we have to take that into the considerations as well. This hasn't evolved into a full fledged reversal yet so we should trade accordingly.

So, I think there might be some opportunity for buying scalpers to come in too IF the selling is over done. However, if you are thinking to scalp upwards, I suggest that you take your profits quickly before the sellers pile on the bounces.


So identify your ranges, trade the breakouts, and follow the price action.

I will update later if there are any significant movements in the regional markets.

Trade safe!

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FCPO

Guys, I think I will stop posting about the FCPO for a while.. need to watch the market for the FKLI now lah..

The CME are trading near the Upper Resistance and are still trying to break through. If they manage to do that, we may follow too. There are some USDA report today I believe. So watch out for that.

Anything urgent I'll post here again! take care!


Best Wishes,

Tech Trader

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Daily Summary 4th April 2012

Good evening traders,

Here are the summary for the day.

FKLI

We traded to the following levels today:

FKLI April Contract

Opened 1601.50 from 1603 the previous day
High 1604
Low 1591
Close 1591.50

What a day.. We had a big pullback from the the top of the recent rally and it just stop right at the trend line.

We expected it to be choppy and slightly bearish.. and price went down to test all levels of our support.

These are our levels for this morning.

Upper Resistance: 1606.50 and 1611

Lower Support: 1600, 1596, 1593 and 1590

Prices never went far enough to test the resistance in the morning and stop short at 1604.

The first trade in the morning would have been to place a sell stop below the morning range. The low of the open was 1601.50. As we expected a slightly down day, it was reasonable to place a sell stop just below the low. Prices then quickly broke to 1596.50.

Once it touched 1596.50, it bounced back up and traded in a small range of 1597-1598.50 for a period of time. Ok when we have such a big down days as represented in the chart as big red bars, a few things could have happened. 1, we would have continued the down move after a brief pause. 2, the support hold and as go back up, as was the case with yesterday's trade. 3, we continue to consolidate for a longer period of time.

In this case, putting a buy stop above and a sell stop just below the 1598.5-1597.0 would have been the right trade. First, if prices would consolidate, you would not get filled. Second, if price does rebound, it would have taken in your long entry at maybe 1590 to 1590.50. And thirdly, if it has broken down, it would have taken your short entry at maybe 1596.50 or 1596.0. Unfortunately in this case today, I took decision of a higher risk entry and enter WITHIN the 97-98.50 range at 98.

Now here are the mistakes I did today:

1) Entering within the 97-98.50 range is already a risky affair. If I'm going to enter early within the range without waiting for a confirmation, I might as well get a better price, say, at 97 or 97.5 right? Then my stop loss would have been just below the recent low of 96.50. Bigger profit, smaller stop loss.

2) Sometimes, taking a higher risk entry does pay off. But evidently it wasn't today. After such a big down move at a big bar, it was totally foolish to try and buy without waiting for a confirmation. More so since we have been expecting price to pullback today. Ugh.. Feel like kicking myself..

3) And since I committed to a long position, I wasn't able to take the short trade when price finally broke out at the low of the range! Talk about double whammy! :(

Then we finished the first session for lunch.

Lunch opened at the 96-97 area. And soon after, broke down to a low of 92.50. A Sell stop at 95 would have been good to capture a big portion of the move down.

After lunch opened, anything could have happened. Price seemed to hold at the support area of 96-97. Now, if I had placed a buy stop at 98.50 and a sell stop below the low say at 95, my work has been cut short for me. First, if price really did rebounded, it would have got my long on the way up and I was on the way to a good scalp. or if price decides to break down, it would have caught my short at 95 on the way down for a nice scalp too.


But I did not take any of the trades immediately after lunch opened.

Then price tried to rally but met with stiff resistance at the 93.5-94 area before succumbing to the selling pressure and touch a low of 91 before closing at 91.50.

So today was an eventful day and a good reminder the old adage, 'do not catch a falling knife' in trading! A short scalper would have had a field day just scalping, and when price bounced up, sell again..

So, what is for tomorrow? We will have to see how the US market close tonight.. the S&P500 seems to be pulling back to and is near the support at 1391. I will confirm again tomorrow.

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FCPO

Ok here is the FCPO Chart.

We traded to the following prices today:

Open 3542 from previous close of 3532
High 3574
Low 3538
Close 3557

So we closed today as a small bar. This would be interesting to see.

Our levels we as follows:

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


In the morning, prices gaped open and quickly trade to a high of 3577 which as just beyond our resistance area.


Then we proceeded to trade slowly down throughout most of the day.. and touching a low of 3538 and bouncing up to close at 3557.

There was no substantial sell down and price seems to hold nicely at our previous resistance area of 3550 in our previous updates nor did price trade up high beyond our resistance today.

But it seems that the sellers are not able to exert much control yet. But I don't think the buyers will be able to take this up too far away from current levels too as the other CME grains namely Soybean Oil, Soybean, Wheat and Corn futures have yet to break their own resistance. Granted all of them are trading near the resistance level except for Wheat, but until a conclusive break of the upper resistance of the respective contracts, I will remain sideways to downward biased.

We will see how are the cash close tomorrow morning and post our daily levels after that.

Wishing everyone a great evening and see you all tomorrow!

Best Wishes,
Tech Trader

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

Daily Summary - 3rd April 2012

Good evening traders,

Alright here are the daily summary.

FKLI

30 Mins Chart

Wow what a choppy day today.

We traded to the following levels today:

FKLI April Contract

Opened 1602.00 from 1597.50 the previous day
High 1606.05
Low 1601.5
Close 1603.00

In the morning, we believed that today would be a choppy range trading to a slightly upside biased day and we were right.

Price opened and tested 1602 before going up to test the high of 1606.50 which was one tick away from our first level of resistance.

Then we traded back down to 03-04 level for a period of time. When it was clear that the support would hold, long scalpers could have entered here for the price to retest the resistance level again.

After not being able to close above 06.50, price started to trade down from here. Ok here was a chance for short scalpers to enter the market as resistance seems to be holding. However, if you had entered a short near the high without waiting for a confirmation, it would be a bit riskier. I would have preferred to short at lower by using a sell stop and let it catch my entry on the way down.

Then price traded slowly at 03-04 before finally breaking down to 01.50 which was the previous day's highs.

When lunch opened, the support seemed to hold and early longs who are willing to take on more risk could have entered a long limit entry at about 02.50 and rode this up to test the high of the range. By taking more risk, they are also being awarded with higher profits if they are right in their judgement plus their stop would be smaller i.e in this case, maybe a stop at 01. I would have preferred a buy stop order near 04 as a lower risk entry as price would catch my order on the way up. The draw back for this are that my profits are smaller and my stop might be caught sometimes by the pullbacks.

As a trader, you would need to weight your risk vs reward carefully and decide which kind of strategy you would employ during each trade as each type of entry carries with it different type of risk vs reward.

So after lunch, we went back up to test the highs again, wouldn't break and came down to close at 03. So as you can see, there was a market for both the long and short traders today. We already expected it to be a range trading session with a slightly upside biased view so we should not be caught making the mistake of buying near the top of the range or selling near the bottom of the range. Trading the breakout of the range is ok if there is sufficient strength in the breaking out of the range.

Ok FCPO next

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FCPO

Ok interesting development in the FCPO contract!

We traded to the following prices today.

Open 3566 from previous close of 3532
High 3566
Low 3532
Close 3532

Whew! Yesterday's closing price and today's closing price was the same! What's more, we gap up in the morning and we did a full gap fill today. Refer to the chart below:

What's more, the Daily Chart is making an interesting Candle Pattern known as Bearish Deaisen or known as Meeting Lines.

Candle stick proponents believe that this candle pattern is a highly reliable reversal signal. This pattern is also known as a Gyakushu (Counter Attack Lines) in Japanese.

The features of this candle pattern are as per below:

"A bullish candle at the top of an uptrend is followed by a gap up the next day. The opening price at the gap should be a full range above the previous day but the trend is downward in a Shaven Opening (Bearish Marubozu) Candle. The main body of both candles should be of equal strength. The closing price of both candles are almost of the same level".

Kindly refer to the daily chart below for the pattern formation.

So it remains to be seen what would happen tomorrow.

Perhaps finally we will fill the 75 points gap from the previous day in the coming few days? Or will we push to higher highs?

It all depends on a few factors including how the other grains product are performing in the night market tonight. I will update on these market tomorrow morning.

In any case, if price wants to push up further, perhaps a pullback before the next leg up is not out of possibility. So.. I will update on the overseas market and the levels tomorrow morning lah.

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Ok.. so I'm gonna leave the office now.. wishing all of you traders out there a great evening and see you all tomorrow! Ciao!

Best Regards,
Tech Trader.

Morning Update - FKLI & FCPO Levels

Morning Traders,

New day, fresh start!

Ok lets get going.

The US Market reacted positively ti the ISM report last night and closed positively.

The Dow closed up +52 points or 0.40% to close at 13,264

The S&P500 closed up +11 points or 0.75% to close at 1,419

The Nasdaq closed up +28 points of 0.91% to close at 3,120

So as of now, the June S&P contract has pulled back to 1412 from 1418 high last night and staying above the 20ema.

The US market is still doing what it should be doing inside the upside channel so we will take this information and use it accordingly.

This will aid our local market to try and push to further new highs.

It is difficult to say what will happen at new highs. Sometimes, at one point, sellers will come in but will not overcome the sheer enthusiasm of the buyers and the short covering will push the index higher. At times, the enthusiasm wanes and sellers are able to take control of the market for a pullback swing. But I don't think it is today.

Keeping in mind that there are some economic data tonight in the US, I am still biased for a range trading session to a slightly upside biased market. For buying scalpers, look for areas of support to hold, then go long to test the next area of resistance. If momentum looks like it is slowing down for the moment, do not hesitate to take profit. As for selling scalpers, I would wait for price to finish its march up, and look for resistance area to hold and maybe sell the pullback and take quick scalps.

Either way, we will let price action be our guide. Do not fight the trend.

Here are the levels for the April FKLI contracts today:

Upper Resistance: 1606, 1609

Lower Support: 1596-95 area, 1593, 1588 and 1580.

Ok I will update the FCPO contract shortly

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FCPO

Ok first we will look at the 4 overseas CME grains that we are tracking

Soybean Oil Future close 56.22 up from 555
Soybean Futures close 1421.25 up from 1407
Wheat Futures close 657.25 down from 663.75
Corn Futures close 657 up from 649.50

Soybean Oil Futures are now (typo) testing the upper range of our broadening wedge pattern of 56.20 as we have updated on the weekly update. Soybean Futures already tested the upper resistance of 1429 by touching a high of 1433.75 last night before giving back a bit of the gains.

As for Wheat, and Corn, both of these contracts are still trading within its consolidation pattern. Corn is demonstrating a positive closing while Wheat closed lower for the day. I expect both of these contracts to be choppy until further breakouts.

Taking in mind that both Soybean Oil and Soybean Futures are also trading at resistance, I will want to see a breakout before a committing to a bullish trend.

How will it affect us:

Ok please be reminded that we had a big gap last in yesterday's trade.

You can read about the weekly update by clicking here for the levels.

So what is in store for us:

Here are the possible range from the daily chart:

Upper Resistance: 3550, 3590, 3560
Lower Support: 3510, 3497, 3480

It is difficult to say whether the buyers or the sellers will exert a stronger influence. The chart looks like it wants to break up further today. However, I also have the gap-fill in the back of my mind in the coming days.

In any case, I think we will let price action be our guide and not guess the direction of the market before price itself has committed to a direction.

For buying scalpers, find the areas of support and see if price holds. If it does, place a buy stop just outside of the range and wait for price to break out and ride the trend and do not hesitate to take quick profits.

For sellers, find areas of resistance and if price cannot break through the area, place a sell stop just below the range so that when price breaks down from the range, it will take you along in its ride down.

So trade safe all.

I'll update as and when there are important news and price movements in the relevant markets.


Best Wishes,
Tech Trader

Market Summary - 2nd April 2012

Dear Traders,

I will post the market summary a bit later tonight.

Wishing all of you a great evening and talk to you all later!

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Summary:

Alright what a strong day we had in our local market! Below are the traded priced for today.

KLCI Cash Index

Opened at 1594.57 from 1596.27 the previous day.
High 1603.96
Low 1590.27
Close 1603.78

FKLI April Contract

Opened 1590.00 from 1584.50 the previous day
High 1601.50
Low 1583.50
Close 1597.50

This is the Daily Chart for the Cash Index.

In the morning after we traded at new high at 1598, sellers suddenly came in to sell sharply and the Cash Index quickly drop to 1590.27 before proceeding to go up to new highs afterward.

This caused the April contract to fall from 91-92 area right down to 83.50 in a flash too which was just above our second level of support of 82. But just as fast as it fell, it also went back up to stay at 85 for a period of time. After spending a fair bit of 85-86 area, we slowly trend up to 87 and then proceed to make new highs too throughout the day before giving back a bit of the gains after cash close.

Now, the April contract fulfilled something which is known as a gap-fill. Gap fill is a funny subject because it is very inconsistent. Some traders believe that all gaps need to be filled, which it often does, and while sometimes it totally did not fill just like our FCPO today.

But it doesn't mean that the FCPO would not fill the gap. Perhaps it may fill it tomorrow, or even a week from now. Or perhaps it may not even fill until a period of time has passed. Which is why it is very difficult to plan and one can only learn and discern when a gap will fill, whether fully or partially, will materialize through experience in the market.

However, traders need to know that such things exist so that they will take note of it and trade accordingly to the market of that time.

But we are now making new highs of 1603.96 in the Cash Index. Can we maintain this upside strength? It remains to be seen. But as with most new highs, I am more likely to stay upside biased especially if the overseas market also demonstrate such sentiments too.

So our lower trend line held nicely again and there was no over shoot. However we are quickly approaching the upper resistance of 1606 and if we can break that, maybe have an outside chance to touch 1617 which is our upper weekly range.

So I will update again the possible levels for Tuesday tomorrow before the market opens.

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FCPO

Haha.. alright lets talk about the FCPO contract. First of all, I knew we were going to gap up big. Now by big, I didn't expect it to gap up 75 points! Goosh!

Our levels posted this morning was as follows:


Upper weekly range: 3500, 3550
Lower weekly range: 3438, 3374


and

Daily Upper resistance: 3477 and 3494.
Daily Lower support: 3441 and 3402


We traded to the following prices today:

Open 3508 from previous close of 3433
High 3541
Low 3501
Close 3532

Ok when price opened for trading, we totally blew past my daily levels.. such was the energy of the trade! Gosh.. I'm glad I wasn't totally wrong as we are still trading within our weekly range (what a cheap comeback.. please forgive me.. lol.. )

So here we are now.. no gap-fill, but no substantial price movement after the up-gap. We are close to testing the 3550 range soon.

I will want to wait for the Cash close for the 4 CME grains tonight to see whats in store for tomorrow.. Will we finally fill the gap? Will we push ahead strongly again? We will let the price action be our guide. So I'll update again the levels for FCPO tomorrow morning lah..

So wishing everyone a great evening and I'll talk to all of you again tomorrow..

Take care!


Best Wishes,

Tech Trader






Best Wishes,
Tech Trader

p/s: Due to under utilization of the side bar, I am considering to take it off from the site.. perhaps if there is such a need I will install it on again. Cheers. :)

Morning Update - Support and Resistance Levels - FKLI - FCPO

Morning Traders,

Wow.. I came into the office at 7 and felt totally relax as I do not need to rush. I think I will start coming in earlier everyday.. for the benefit of all of you out there.. :)

I have decided to use a new post this morning instead of continuing the previous one because I wanted to add the overseas market information into it too.. so lets get going!

We will start off with an update of the overseas market.

The Dow closed up +66 points or 0.50%

The S&P500 closed up +5 points or 0.37%

The Nasdaq closed down -4 points of 0.12%



As of now, the S&P 500 gapped up on opening in pre-market and we are trading at 1408.75 up +5.5 points or 0.41% and the DOW is trading at 13187 up +45 or 0.34%.

Now, it is good that the US market gap up. The other regional markets and ours might follow as well. But gaping up brings with it a different type of risk, which is a 'gap-fill'.

The theory is that gaps tends to be filled, meaning, for example, if we have a gap up, sooner or later, we will have a pull back that will close the gap fully, or partially, before resuming the trend or even totally reversing the original direction of the gap and vice-verse for downward gaps.

But for now, I am happy and am taking the up-gap in the US market as a positive sign that our bullish sentiments are still intact. :)

Ok what are our levels for the FKLI this week.

We will first look at the Cash Index.

Ok in our last post, we believed that the uptrend is still pretty much intact as the lower trend line held nicely and we closed as a nice green healthy green bar.

I think we might have a good chance to make new highs if this strength continues on.

The upper range for the week: 1597, 1600 and 1606.

The lower range for the week: 1587.50, 1583 and 1581.

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April FKLI contract

Ok first off when I came into the office, I notice that the April FKLI contract chart was a bit cacat. I will check with the vendor and it is just a small problem lah.. :)

Here are the Daily Levels for the April FKLI Contracts that I have deduces by using the Cash Index chart and my partially 'cacated' April chart..

Daily upper resistance: 1591, 1595-97, 1600, 1606

Daily lower support: 1585, 1582, 1580

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FCPO

Soybean Oil Future 54.86 up from 53.69
Soybean Futures 1402 up from 1355.50
Wheat Futures 658.75 up from 613
Corn Futures 644 up from 605

Ok as per our weekly update on the overseas market, we have updated that the 4 CME grains that we are tracking as per above closed strongly after the bullish USDA report. I expect the FCPO to gap up at opening too.

Here are the weekly range for the FCPO contract.

Upper weekly range: 3500, 3550
Lower weekly range: 3438, 3374

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Now I am interested to see how we will trade today. Many of the other CME grains are in a consolidation area and that will effect our FCPO somewhat also.

But the chart indicate that the uptrend is still in tact so we will trade accordingly.

Here are the daily support and resistance levels:

Upper resistance: 3477 and 3494.

Lower support: 3441 and 3402

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Ok trade safe all! I will update again whenever necessary.

Best Regards,
Tech Trader

The Week Ahead - FKLI - FCPO

Dear Traders,

Here are the weekly chart for our local FKLI and FCPO's chart.

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FKLI

We had a great week in our local index. The lower trend line held nicely and we close the week with a healthy green trend bar. We are just a few a few cents away in the cash index to test our 1597 resistance of the recent high. So I think if the uptrend continues, we will go on to test the 1600 and 1606 range soon. I will post the weekly range tomorrow morning before the market opens. :)

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FCPO

Here is the weekly chart for this week's price action.

We started the week strong but FCPO's price was also being dragged down along with the other grains product on the CME. We close the week with a gravestone doji looking pattern.

However, we have yet to test the bottom of the wedge so for me, the up trend is still pretty much in tact. With the Soybean Oil, Soybean, Wheat and Corn futures closing strongly last Friday night, I expect our FCPO to gap up in the morning.

I will post more on the levels tomorrow morning when I get into the office by editing this post.. no need too much new post lah rite? :)

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Read more on the weekly forecast for the overseas market for 2-6 April 2012 by clicking here. 

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Ok wishing all of you traders out there a great evening and get rested for the coming week ahead!

Talk to all of you soon!


Best Wishes,
Tech Trader

The Week Ahead - 2-6 Arpil 2012

Hello Traders,

Wow looks like we have an interesting week ahead!

We will start off by looking at the important economic data that are being released for this coming week that might effect the market.

First off, we have ISM Manufacturing PMI on Monday, FOMC Meeting Minutes on Tuesday, ADP Non-Farm Employment Change and ISM Non-Manufacturing PMI on Wednesday, nothing of importance on Thursday, Non-Farm Employment Change and Unemployment Rate on Friday.

Looks like we are going to have quite a choppy week ahead. Now lets look at what we can deduce from the weekly charts.

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Lets start off with the S&P 500 contracts. Now for those of you new to the site and are asking why are we using the S&P contracts and not the Dow or the Nasdaq or other indices, you can refer to my previous post last week for the reason by clicking here. It is all basically the same as the patterns look almost the same on all of these index charts and I have all of them up at the same time on my platform at all times

Ok here is the chart for the S&P 500 contract.

Last week, we had an up week and made a new high of 1419.75 before pulling back to test the lower channel and 20ema line at 1386.25. From the charts, the uptrend looks like it is still in tact and we should continue to trade accordingly until the trend has been broken conclusively.

The Upper Resistance area is at 1430 and if we manage to break that, we may test the 1440 area.

The Lower Support area is at 1393 and 1380. If we close below 1380 for the week, we have to be careful of a possible trend change.

Do not discount the possibility that we might trade outside of these ranges if some big news, good or bad, hit the wires and I will keep a close eye on the market and update here if such changes occur. For now, we will plan our trades accordingly.

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Next we look at the 4 CME Grains that we are tracking. Take note that we will have a few economic data for Agricultural product this week which are Crop Progress on Monday, US Export Sales on Thursday and World Agricultural Supply and Demands Estimates on Sunday.

Soybean Oil Futures

What a volatile week for the Soybean Oil Contract. We started the week very well and making a high of 55.82, which was near our minor trend line of 56. Then we pulled back sharply as prices were being drag down by the performance of the other grains product such as Corn and Wheat and broke through our minor trend line and traded to a low of 53.60. I have drawn two blue minor trend line across the recent price action and it seems like we are forming a broadening wedge pattern within the big triangle. On Friday cash hours trading, bullish USDA report caused priced of all the grains to gap up to regains most of the losses of the pullback of the previous few days. In the end, we close the week as a Doji Candle.

What to expect:

I think looking at where we are trading now, which is within the shaded rectangle on the left which is a consolidation area in the beginning of 2011, I think we are now entering into a choppy phase of the chart. This was confirmed with the closing of the last weekly bar as a Doji, which means that the buyers and sellers are relatively balanced out. Within the broadening wedge pattern, we can trade from all kinds of pattern from a small bar which means further indecision of the market to big large trend bars. We will let the price unfolds and see how it will effect our FCPO accordingly.

The Upper Weekly Range for the Soybean Oil contract is at 56.20
The Lower Weekly Range stands at 53.25.

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Soybean Futures

Ok next we look at Soybean Futures. This contract performed the best out of all the grains product that we are tracking. We traded up on Monday and by Thursday, the price of Soybean Futures were being dragged down also by the other grains product as we have updated in our daily market commentary. However, bullish USDA report caused the price of this contract to gap up big on the cash hours trading on Friday and we closed the week with a nice healthy up trend bar. I have drawn another minor trend line across the low of the last three week as we have broken through the lower channel line twice. It remains to be seen what would happen next week as we are now also trading inside the consolidation of the beginning of 2011 as I have highlighted in rectangle on the left side.

But there is no doubt that this contract shows a more healthy upside biased chart compared with all the other 3 grains that we are tracking.

The Weekly Upper Range stands at 1429 and if there is enough strength, maybe an outside chance of testing 1453.

The Weekly Lower Range stands at 1364 and 1355.


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Wheat Futures

Well well well.. The consolidation continues for the Wheat Futures. We actually broke out of the smaller triangle lower trend line at 635 and went down to test near the larger triangle bottom trend line at 611. Along with the bullish USDA report on Friday, we gaped up during cash hours trading to close the week in positive territory. However, the weekly bar closed as a Rickshaw Man Candle which signifies indecision in the market.

For a Rickshaw man candle pattern, it is believed that an upside break out of the candle is a bullish pattern while a downside breakout is a bearish pattern. Based on this theory, I think there is a better chance of us breaking up on the upside because the large triangle lower trend line is a major support area at around 608.

An upside breakout of the Rickshaw man candle would meet resistance at the smaller triangle/flag pattern upper trend line at 673.50. It remains to be seen if we can break out of this smaller triangle pattern on the upside. If we finally do, we may go up to test the 700 level in the coming days. The break below 635 last week would have caught many new bears and they will be looking to get out from their position and when they do, price would be push up as an effect and at the same time, new bears would be less reluctant to sell now after being caught once and would wait for more bearish confirmation before trying to sell again. I'm looking for Wheat to be in a choppy range within the smaller triangle to a slightly upside strength to test the resistance range of 673.5

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Corn Futures

Ok lastly we will look at the Corn Futures. Corn was one of the bearish contract last week. We broke through both the minor and major trend line at 640 and 625 to make a low of 603! Talk about bearish!

What was more interesting was, after the USDA report, we gained close to 40 points from the lows on Friday alone! Talk about volatility! So now we have closed back into the triangle pattern but formed another Rickshaw Man Candle pattern which signifies indecision. We will wait for more price action to unfold for more clarity in the coming days on the daily chart.

I am looking at a lower weekly range of 630 and an upper range of 664 and if we break that, may test the 675 range.

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Ok that's about it for the possible weekly range. Remember that we can only read what the chart tells us and in trading, there is no 100% guarantee that prices would react like we have predicted which is why it is important for us to review the daily price action and apply the right trading strategies accordingly.

I wish everyone a great weekend ahead and trade safe!


Best Wishes,
Tech Trader

p/s: I have to go out to airport shortly.. so will return to correct the typo mistakes later.. Ciao and have a great weekend all!

Upcoming Weekly Updates

Good Sunday Traders,

How is everyone doing? I hope everyone is doing well and prepared for the coming week ahead. I will be updating the weekly outlook by the end of today after doing some study and research.. so do check back tonight for whats in store for next week!

Ciao All!

Beat Regards,
Tech Trader