December Dow Jones -Dow Jones futures traded higher after Alcoa Inc. started the earnings season with an unexpected profit and jobless claims decreased more than forecast. The rally did stop short of breaking through resistance at the upper parallel reaction line. Therefore, I'm not ready to say the upward trend will continue until I see how the Dow Jones futures deals with this resistance level. The market is still in a sideways transition, even though it is showing an upward bias, but I have not seen the confirming pattern needed to trigger a new position.
November Crude oil – Long from 7098 – I fell victim to the whipsaw price action after Wednesday’s energy report. The market rallied before the report and I used that as an opportunity to raise the stop loss to 6972. So after the report was released, Crude oil fell to a 6888, closing the long position.
November Heating oil – Long from 1.8225 – The long Heating oil was closed on the pullback after Wednesday’s energy report. The stop had been raised to 1.7716. The market closed Wednesday’s session at 1.7811, near the low of the daily session. The bullish TR swing pattern is still valid as a buy pattern. A trade above 1.8495 will be enough to trigger a buy signal with a stop loss under Wednesday’s swing low.
December Silver – Over $1.90 in four days! The rally was triggered on October 10th off the bullish TR swing pattern that had formed on the 20-day SMA. Silver reached a new high on Thursday—trading above the $17.69 high posted on September 17—one day before the projected reversal swing day. A new high on the reversal swing day could portend a profit-taking correction.
December Gold –With gold reaching yet another record high on Wednesday, gold pundits are betting the precious metal could hit $1600 an ounce soon. But, the market will have to get past the two approaching reversal swing days before that can happen. Gold is currently trading within spitting distance of the ascending centerline resistance, with a reversal swing day due on Friday, October 9 and another on Wednesday, October 14th. The confluence of the centerline, reversal swing days and reaction line target objective suggests $1,070 is an important target objective for this price run.
November Soybeans – After a one-day pause under the 20-day SMA, Soybeans continued to stage another strong push higher and traded above the previous pivot high of $9.37 ¼. This is enough to confirm the 5-wave continuation pattern and the beginning of a significant trend shift. The market has rallied a little too much for me to take a long position at this level, but normal market behavior suggests a two or three-day correction should follow with a pullback to the 60% buy window that currently sits at $9.03.
December Corn – Long from $3.43 – last price $3.64 – Corn closed higher on Thursday, as rain continues to fall over much of the Midwest with colder temperatures expected this weekend. Corn was also supported by the USDA report that says last week, 2009-2010 exports of Corn improved from up 15% to up 20% from a year ago.
Wednesday’s “inside day” formation proved to be a rest day, as Corn traded higher and tested the $3.70 high posted on Tuesday. The ascending centerline and reaction target objectives both suggest Corn will test or trade above the $3.76 high from August 3rd. Hold the long position and move the profit stop to $3.53.
December Hogs – I had the right idea when I said it was time to buy Lean Hogs in Wednesday’s issue, but the market took off and left me holding an empty bag. I never got the pullback I was hoping to get. Since then, the market has rallied over 440 points higher, so I will stand aside and wait for the impending market correction to provide a confirming swing pattern and long entry.