December Dow Jones - Short from 9675 - last price @ 9662 - Dow Jones futures closed lower for a second day, as sales of existing homes unexpectedly slumped and the Federal Reserve said it will cut the size of two programs meant to bolster credit markets. The technical picture became much more clear after December Dow Jones futures traded above the 9797 high posted on September 17, before reversing and closing below the prior five closes. The outside day occurred on a trail day pattern that can be a strong directional indicator, depending on the direction of the closing price compared to the opening price. Hold the short position, with the stop loss at 9862.
December Japanese yen - According to Japan's Ministry of Finance, exports were down 36% in August from a year ago. This was the 11th consecutive month of decline. Looking at the chart, I see the market has completed a five-wave reaction cycle; the Japanese yen futures peaked at the ascending centerline after it posted a double top on September 14th. From this swing high, the Japanese yen traded lower over the following five sessions, and found support at the 20-day SMA (1.0812), before staging a three-day corrective rally into the 60% sell window at 1.0958. A weak rally occurred early in Thursday's session, but quickly fizzled near the descending parallel reaction line and drifted lower into the close. This price action has formed a potential bearish TR swing pattern, suggesting a possible trend shift. Sell the Japanese yen at 1.0915 stop, with a stop loss at 1.1078.
November Crude oil - Long from 71.75 -The long signal was triggered before the energy report was released. Traders were expecting a 2.5 million barrel draw-down, but got a 2.5 million increase. This sent the market into a downward spiral and closed the long at the stop loss at 69.70. However, later in the trading session, the RT Swing Trader did trigger a sell at 68.45. To follow the swing trading strategies offered by the RT Swing Trader, go to www.reversaltracker.com and sign up for a 30-day free trial.
According to IHS Cambridge Energy Research Associates, the oil industry discovered 10 billion barrels of new oil reserves in the first half of 2009 and is on track for their best year since 2000. The new finds are said to be the result of major investments and improved drilling techniques.
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December Silver - On September 17, I posted an alert on the www.reversaltracker.com/blog that Silver had reached the target objective, where the descending reaction line and ascending centerline were converging. The high was $17.69. Three days later, Silver bottomed at $16.60, one day before Tuesday's reversal swing day. The market then rallied on Tuesday, reaching the 60% sell window that begins at 17.21. Although market structure is still showing the market in an upward trend, Silver has completed a bullish reaction cycle and should be moving into a correction or consolidation phase before resuming the upward trend. In the last update, I said I wanted to wait one more day to see if I could get a slight rebound or a higher close to set up a reaction swing sell pattern. Didn't get it...the market spiraled lower without me. I hate that! Silver dropped to a low of 16.26 and stopped on the 20-day SMA. That was a drop of over $1.40 since September 17th. I'll have to stand aside until the new pattern unfolds.
December Gold - Short from $1,014.20 - Hit the target! - Gold retested the upper reaction line, where it lost momentum and turned lower. The market then accelerated into the 20-day SMA, reaching the $995.00 target price early in the session.
December Corn -Long $3.30 - last price @ $3.30 ¼ - Grain traders are now beginning to express concerns about the immaturity of the U.S. crop, amid outlooks for some cooler weather in the Midwest that would push prices higher. That is certainly helping our long position, as the market is in the process of posting the third higher close in as many days. Thursday's session tested the 20-day SMA ($3.23) before pushing to a new daily high. I consider this as a positive setup for a test of the recent high of $3.47 ¾. Hold the long position and raise the stop loss to $3.15.
November Soybeans - Soybeans are moving to the right of the descending centerline. This shows the market is beginning to strengthen, even as it is drifting lower, so we need to be cautious of any short positions at this time. Tuesday's one-day rally to the upper parallel line was caused by a weather scare. Since then, Soybeans have moved lower, due to improving weather forecasts. However, Soybeans have moved into the 60% buy window and have formed a potential TR pattern, with a reversal swing day due on Tuesday. All this makes the soybeans a good market to watch for a possible turnaround and buy signal. Buy Soybeans at $9.32 stop, with a protective stop under the swing low.
December Soybean meal - Long from 282.50 - last price @ 279.40 - Soy meal has completed a 5-wave continuation pattern and is currently in the last stage of a bullish TR swing pattern. The meal did dip to the lower levels of the 60% buy window and below the lower parallel action line, but managed to close above the line on Wednesday, September 23. Soy meal did manage a rally on Thursday that was just enough to trigger the early buy signal, but didn't leave a sufficient separation at the close. This means Soy meal will need to show more strength on Friday in order to hold the long position. Hold the long position, with the stop loss at $272.00.
December Soybean oil - Bean oil traded down into the 60% buy window, early in the session, but recovered most of the losses and closed above the 60% level. This is a potential bullish TR swing pattern with a trigger price of 34.97. - Buy the December Soybean oil at 34.97 stop with a stop loss at 33.50.
December 10-year Treasury Notes - Dang it, they're spending our money. According to Eric Fishwick, head of economic research at independent brokerage CLSA's Asia-Pacific Markets, China may soon begin importing more than it exports, thanks to rising income levels and their government stimulus programs. That may mean bad news for U.S. Treasuries and could ultimately lead to higher interest rates. If China saves much less and spends more as a nation, it has less money to buy U.S. Treasuries, which would force up rates and make borrowing more expensive here.
December 10-year T-Notes have formed a potential bearish TR swing pattern and the corrective rally has reached the 60% sell window at 117-23.5. Today's high is also testing the descending parallel reaction line. A failure at this point will turn the market lower and trigger a sell signal. Sell the 10-year T-Note at 117-05.0 stop, with a stop loss above the (D) swing high.