a quick look at activity in the futures market wit

  1. 2,154 Posts.
    I used to post 'trading ideas' about 12 months ago that highlighted specific trading opportunities in the speccy and derivative sectors implementing simple technical analysis.

    I am going to do it a little different now, based on my weekend research using the same principles in the trading ideas posts. Sure, some of you will think I am trying to be another RR - but hey if I can't clear my thoughts and vent my spleen here, then where can I ? :-)

    I'm going to look at indices x2, commodities x2, bonds & a currency . No Stocks :-)

    Whilst explaining a point of view with charts - please remember that I am not going to go in great detail, as I will attempt to keep it short and sweeeeet, and I am no CTA.

    The CRB Index Weekly chart is trading at new highs. What is so interesting about this chart, is during the peak of the tech boom the CRB index actually picked up on the high inflation rate and thus also fell according to monetary easing. Well, who is to say we have dis-inflation when CRB has been a solid indicator for inflation for the past 10 or so years ?


    The S&P 500 Index has almost double topped as evident by the 950 resistance which has given two bonafide short signals thus far. I firmly believe the S&P will range between 800 and 950 for a long time as some technology components in the SPX have limited downside. So a loong tight range is highly possible. The MACD is signaling that bears are and will have a good time.


    Gold - As much as it displeases me, spot gold is overbought with significant resistance at $338/oz created during the 1999 spike high. This coupled with the fact, there is a RSI negative divergence taking place on the weekly chart which needs to be monitored closely imo. It is negatively diverging near critical resistance. The divergence will be overcomed only if spot gold trades above $350/oz imo - take your bets, my bet is up :-)


    Wheat - It has had a stellar run, though it is the first commodity to break critical supports and a sign of an imminent breather in the agricultutal commodities market. Wheat is looking bearish as it broke through two critical support levels in conjunction with the USDA releasing a report Thursday early morning aussie time that export sales, net sales of US wheat will be well below the low end of trade expectations. However, three hours after the USDA report the EU awarded more than 500k tonnes of wheat for export in part of its subsidy program. Currently wheat futures is holding its 50% retracement with stochastics very oversold- will it sink or swim ? Fun and games being played out in the agriculutre futures market as the cold winter in the US approaches.


    Bonds- bonds are overbought in a wedged body, technically speaking ! The lower highs worries me, Friday was only the second time in three months there is an imminent capital outflow from bonds. Where is the money going to go? equities ? Or are volumes drying up in the equity and debt markets ? Hmmm bonds used to be the home for so -called safe haven money.. but now the liquidity is drying up what else is considered as a safe haven and in a strong uptrend ? However, keep in mind that Aussie bonds surged on Friday due to geopolitical factors, US bonds fell.


    AUD - made a new five week high on Friday with the MACD x-over to the bullish side. A strategist I correspond with indicates the AUD is looking very sound technically but the fundamental story does not appear as solid as the drought has knocked around a percentage point off annual growth in Australia this year. However the stronger than forecasted local employment figures supported the AUD and pushing it higher. CMC'ers Buy the dips!!!


    It's time for my ritual Sunday drinking spree, Cheers
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