December Dow Jones - Hit the target! - Dow Jones futures traded lower after trading slightly past the 10275-target objective. The Dow futures traded at a high of 10309 on Wednesday, but fell on Thursday. The market had posted six consecutive days of higher closes and was overbought leading into Thursday. The bullish cycle is still intact into the November 19th reversal swing day, but I look for a two or three-day correction back to 10050 and form a bullish swing pattern and build energy for the new test of the high. Buy the Dow Jones (E-mini) at 10070 or lower, with the stop loss at 9945.
December Japanese yen -Long from 1.1160 - last price @ 1.10066 - The bullish TR swing pattern is still valid, although the Yen has posted two consecutive lower closes since making the new 20-day high on the November 11th reversal swing day, determined by the reverse count to (B). The (B) reversal swing day is typically a minor swing day and will usually only cause a short-term pause in the cycle. Hold the long position, with the stop loss at 1.1105.
December British pound -The British pound traded above the ascending median (center line) on the second test since October 23rd and one day before the November 10th reversal swing date. Then the market pulled back and closed lower on Tuesday...the projected reversal swing date. A lower close in an upward trending market is typically considered a continuation pattern and suggests higher prices can follow. Buy the BP at 1.6805 stop, with a stop loss at 1.6555.
December Eurocurrency - Long from 1.4945 - last price @ 1.4841 - EU traded to a high of 1.5048 on Wednesday, but was unable to cross over the ascending median line resistance. This caused the market to close lower and continue the descent throughout Thursday's session. The market has dropped to the 20-day MA and seems to have found some support. This is a critical juncture for the EU. Either the market is forming a continuation pattern that would suggest the market will rebound off this low support, or the EU is forming a major TR (trend reversal) pattern where it will begin a new downward trend. I'll have to wait another day to see what the market action reveals. Hold the long position, with a stop loss at 1.4820.
December T-Bonds - The 30-year Treasury bonds declined after a record $16 billion sale of the debt, bringing the total for this week's offering to $81 billion. This debt offering drew the weakest demand since May. The weak demand is also displayed in the charts. December Treasury Bonds have been trading in a choppy sideways to lower trend since early October, but that appears ready to change. The 20-day SMA and the descending parallel reaction line have turned each corrective rally lower. The last rebound was again stopped by the combination of 20-day SMA and the descending parallel line, as well as the projected reversal swing day. Thursday's low penetrated the five-month trend line and is showing much more weakness than before. Sell T-Bonds @ 117-07 stop, with a stop loss at 119-10.
December Crude oil -Crude oil futures fell after the Energy Dept. report showed a larger-than-forecast gain in stockpiles and the lowest refinery operating rates in more than a year. The market continues to consolidate above support provided by the prior highs and the ascending parallel line. The long-term cycle remains bullish, but in the short-term, it looks like Crude needs more work at this level to build energy before it can muster the next bullish leg.
December Gold - Gold futures reached a new all-time high @ $1,123.40 and breached the descending reaction line target objective before profit-taking reversed the Gold and pushed it below the prior day's low. Gold finished the day as an outside day with a lower close...a negative pattern. While this did happen one day before the projected reversal swing day-projected several days in advance-it suggests this may be the beginning of a significant top in Gold. However, I would like to see the market action on the November 13th reversal swing day before making any new recommendation.
December Corn -Corn traded up into the November 11th reversal swing date, but fell short of the $4.05 target objective. After trading above the prior high, corn stalled at $4.03 and faded back to close near the open. The weakness continued into Thursday and pushed the market down to the 20-day MA. Corn appears to be forming a bearish A-B-C continuation pattern, but needs a pattern confirmation before a trigger price can be determined.
December Cotton - Long from 69.02 - exit price @ 67.20 - Wow, this trade didn't last long after the market came out of the starting gate very strong and rallied to a new high of 70.61, before it completely ran out of buyers. The swing pattern failure has set the stage for a possible sell-off over the next few days.
January Orange Juice - I don't look at the OJ very often, but I could not pass up the pattern that has formed in the OJ chart. OJ had a very strong rally in early October and then formed an A-B-C continuation pattern when the market corrected back to the 20-day MA and ascending lower parallel line. The market has since moved off the support and formed a new bullish reaction swing and possible TP pattern. This price action portends another bullish leg. Buy OJ at 118.50 stop, with the stop loss at 110.00.