December Dow Jones - Dow Jones futures took a breather after Wednesday's sharp rally, but did manage to post a higher close as energy producers gained after oil rallied to the highest price in a year of a bullish EIA report. Today's close was the second consecutive close above the ascending median (center) line support. The cycle remains bullish into the October 27th reversal swing date with a target objective of 10100 followed by 10300. - Buy a pullback to 9950 with a stop loss at 9825.
December Eurocurrency – Long from 1.4825 – last price @ 1.4825 – The euro reached the highest price point since August 2008 as investors continue the shift from the U.S. dollar into currencies offering a higher return on prospects for super-low US interest rates and rising economic confidence. Wednesday’s entire trading range was above the prior swing high (1.4844 on September 23) and the ascending median (center) line. The two closes above the median line suggests strong support and could act as a foundation for continuation of the upward trend. - Hold the long position and move the stop loss to 1.4825.
December Japanese yen – The Yen triggered the buy signal at 1.1195 during Wednesday’s session, but peaked at 1.1261 inside the 60% sell window. By the end of the day the Yen lower and out of the 1.178, suggesting a pattern failure and potential sell signal from a bearish TR swing pattern. The sell pattern was confirmed on Thursday after the Yen dropped through the 1.1125 trigger price for a short signal. This closed the long position at 1.1125. – If not currently short, sell the December Japanese Yen at 1.1045 or higher with the stop loss above the 1.1207.
November Crude oil – The bullish EIA report was all that was needed to accelerate the current rally in Crude oil. The market has closed higher six days in a roll as it continues to climb towards the descending reaction line target objective and the October 16th reversal date, projected several days earlier. Crude oil is poised to reach the target objective where the time and price indicators converge at 78.50 on October 16th, or 17th. If long, it is time to tighten stops of look to bank the gains. The long-term cycle is still bullish, but the market is setting up form a much-needed correction to reset the market before the next upward swing.
November Heating oil – Long from 1.8495 – Hit the Target! – Heating rallied off the bullish EIA report and breached the 1.9650 target objective to closed out a very nice trade. In hindsight we may have exited a little early because the cycle is still bullish into the October 23rd, so I will watch for a new swing pattern to offer a new entry signal.
December Gold – Right on target! – In the last issue I talked about Gold reaching the descending reaction line target objective on or before the October 13 projected reversal swing date. It did! December Gold traded to a high of $1,072.00 of the 13th, but closed well below the high at $1, 064.70. However, it was on the following day—the “trail day”—that the selling kicked in and confirmed the reversal pattern. Gold remained under pressure and closed sharply lower. I look for more selling to pressure the market over the next few days with the first level of support at $1,040.50 followed by $1,025.00.
December Corn – Long from $3.43 –December Corn stalled, after trading above the previous swing high--$3.76 on August 3rd—and traded on both sides of the ascending centerline, but was unable to break through the reaction line. An improving weather forecast triggered profit-taking overnight and Corn dropped below the profit stop to close the long position at $3.78 for a nice gain.
December Cotton – Long from 65.60 – last price @ 67.64 - Rain continues to fall in Texas and around the Mississippi River Delta. The Palmer Drought map already shows excessively moist conditions in Arkansas and Mississippi. The wet weather is causing concern for the cotton crops and triggered a late session rally. Cotton traded out of a two-month consolidation pattern and closed above the previous swing highs. - Hold the long position with the stop loss at 65.65.
December Soybean oil – Long from 35.59 – last price @ 36.78 –Bean oil low enough to trigger the buy signal at 35.59, before turning higher and traded below the low of Wednesday’s “inside day” to trigger the buy signal. – Hold the long position with the stop loss at 35.40.
December Soybean meal – The three-day setback has formed a new reaction swing pattern and the final segment of a bullish TR swing pattern. I look for a little more of a pullback to test support at 285.90. Over the last few days Soy meal staged a strong rally as it broke out of the longer-term continuation pattern. The current correction is forming a potential bullish “setup” for a longer-term buy signal. – Buy Soy meal at 285.90 or lower with a stop loss at 275.00.
December Soybeans – A bullish TC swing pattern has formed under the ascending centerline. This is the final segment of a bullish TR swing pattern that could confirm the beginning of a new bullish reaction cycle. – Buy Soybeans at $10.13 ½ stop with a stop loss under the (D) swing low.
December Copper – A bullish TR swing pattern has formed above the 20-day SMA, following a five-wave continuation pattern. If confirmed, the swing pattern will be the beginning of a new bullish leg in the Copper. – Buy Copper at 288.75 stop with a stop loss at 275.50.