How is your weekend so far? I hope you are all rested and ready for next week! :)
Lets do a bit of recap of last week.
In the beginning of this week, after price had fallen through the floor in the FKLI, we expected a bit of pull back towards the direction of the 20ema with the general area of 55 as the target price.
Price indeed traded back up and we close Friday at 1549 although we traded in a grinding and choppy fashion. In the FKLI, price traded both above AND below the 200ema. However in the Cash market, Price basically remained above the 200ema which should have given traders some confirmation on the pause of the recent decline.
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S&P 500 Futures - ES
We traded to these levels last week:
Opened: 1291.75
High: 1329.75
Low: 1287.25
Closed: 1314.75
Our levels for last week was:
Possible Weekly Upper Range: 1343
Possible Weekly Lower Range: 1250 and an outer chance to reach 1220.
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In the S&P, coincidentally or not, on the Daily chart, we are also trading at the 200ema area and the chart looks pretty much the same as our local FKLI. Price have taken a pause from the decline of the previous week and have pulled back a bit from the lows.
I personally think the danger is not yet over. May has traditionally been believed to be a wishy-washy month and it is the month before Triple-Witching on the third Friday of next month. Unless there are really great market stimulating news to give this market a boost towards the upside, I think the better risk vs rewards would be towards the downside.
I think the 1336-1340 area are going to be strong resistance points in the S&P futures and the buyers need to push this way above that range to make people believe that this market can still go up in the intermediate term. Otherwise, I think very soon the sellers will take back control of this market and add the Euro zone crisis as a kicker, we could break down through some serious support and cause some serious pains to the longs.
However, should we break down further, we should see some support at the 1250-1220 area which is the congestion area at the end of last year.
Here are the possible range for next week:
Possible Weekly Upper Range: 1343
Possible Weekly Lower Range: 1250 and an outer chance to reach 1220.
We will let price action be our guide.
Lets move on to the CME grains.
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Soybean Oil Futures
We traded to these following levels last week:
Opened: 50.44
High: 51.28
Low: 48.55
Closed: 50.20
Our levels for last week was:
Possible upper weekly range is: 52
Possible lower weekly range is: 48.30
Alright.. we were quite close in regards to the possible weekly range. Our projected weekly low was 48.30 and the low was just a few cents above which was 48.55.
We closed the week as a spinning top doji. Price broke down in midweek but we regained a lot of ground in the last two days of trading. We are now still trading firmly below the triangle pattern, but the rally in the last two days indicated that there are still buyers still willing to come in at those levels.
There is a possibility that we might break down further. After all, we have not yet break the down trend line from the recent down swing. But should we move up next week, I don't think we will go past the lower triangle pattern trend line by too much. I am more biased towards a sideways trading for next week. Should we break down further, I think the 200ema would provide some degree of support for this contract.
Here are the levels for next week:
Possible upper weekly range is: 52.50
Possible lower weekly range is: 48.30 and an outside chance to touch 47 should we break further.
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Soybean Futures
**side track** - Look at this chart and look at those of the S&P. Doesn't it baffles you how similar they look like? lol..
We traded to these following levels last week:
Opened: 1413.75
High: 1423
Low: 1351
Closed: 1383.50
Our levels for last week was:
The possible upper weekly range is: 1465
The possible lower weekly range is: 1350
Wow.. we called the low of this contract almost by the tick! Our possible low of the weel was 1350 and the low it made was 1351. I think we got the lows for this contract and Soybean Oil quite accurately for this week.
We have yet to break the down trend line for this contract so the worst is perhaps not yet over yet. We closed the week down but we did regain a lot of the losses from mid week right into Friday.
I am looking at possible sideways trading to a possible slight break down from these levels. We will see how the other grains product are performing including our FCPO as all of these are economically related products so their price tends to move in tandem with each other to a certain degree.
The top of last week as actually smack right at the top of the triangle pattern upper trend line. It is possible that for next week, that same line would provide much resistance yet again, and should we over come that, the 1450 would be an area of strong resistance.
Should we drop further, which is quite possible, I think that the 50ema area should provide some measure of support at around 1312-1300 area. We will let price action be our guide and follow this contract closely as a breakdown of this contract will bring our FCPO lower too.
The possible range for next week are:
The possible upper weekly range is: 1450
The possible lower weekly range is: 1312-1300 area.
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Wheat Futures
We traded to these following levels last week:
Opened: 700
High: 722
Low: 661.75
Closed: 675
Our levels for last week was:
The possible upper weekly range is: 754
The possible lower weekly range is: 622
After Wheat's strong performance last week, price did try to rally but was thwarted at the first area of resistance at 725 area. Price was not able to close above the upper triangle trend line last week. Wheat has essentially been trading sideways for a long time with the exception of last week strong bull bar. Perhaps we might see this contract start to get some upside strength in the coming weeks and stage a break out above? We will see.
I think wheat might try to push up above the triangle pattern once again. So the first area of resistance would be the 695-700 area. If we manage to break that, then maybe we can go up to test the 725 area once again. Should the other grains be performing weakly, then I think wheat would be pulled down as well back into the choppy range once again at around 625 area.
Here are the levels for next week:
The possible upper weekly range is: 725
The possible lower weekly range is: 623
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Corn Futures
We traded to these following levels last week:
Opened: 638.25
High: 644.50
Low: 573.25
Closed: 578.75
Our levels for last week was:
Possible upper weekly range: 665
Possible lower weekly range: 575
Wow.. we almost called the low for Corn too this week by a few ticks. Our projected lows was 575 and the low was actually 573.25. Pretty close!
But I do not know if that is good news or bad news. What that means is that price has tested the 575 support a few times and should the other grains break down further, we might see corn fall through the floor and dragging our FCPO with it as well. So be forewarned!
I will be following this contract closely to see if we break down further. Corn has been in a choppy range but we are now trading firmly below the triangle pattern.
Should we break down below, I think the 200ema area should give some degree of support too.
Here are the levels for next week:
Possible upper weekly range: 655
Possible lower weekly range: 542 and and outside chance to touch 529 should we break further.
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So take care and I'll see all of you tomorrow in our morning updates! Ciao!
Best Wishes,
Tech Trader
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