December Dow Jones - Foreign investors are benefiting from increased buying power due to the seven-month decline in the U.S. dollar. Investors are taking advantage of the situation by snapping up U.S. stocks at the cheapest valuations on record. This has supported the stock market and could continue to support the market as long as the attack on the U.S. dollar continues. On the technical side of the market, Dow Jones futures traded above the previous high by 19 points, before losing momentum and losing most of the daily gains. The loss of market momentum came on a projected reversal swing day and could be a precursor of things to come. However, the trend is still pointed higher and I would need to see more of a pattern confirmation before suggesting the current rally is coming to an end. All the reversal swing day is suggesting at this time is that it is a good idea to tighten protective stops and keep a watch for a confirming reversal pattern.
December Eurocurrency – Central banks are currently sitting with record reserves, but they are increasingly snubbing the U.S. dollar in favor of euros and yen. The shift away from U.S dollars is further pressuring the greenback as it comes off its biggest two-quarter rout in the last 20 years. Friday’s reversal swing day failed to traded above the prior day’s high, but it did trade below the prior day’s low, setting up a bullish trade “setup”. Monday’s “trail day” added to the bullish signal with a close higher than the opening price. The “trail day” can be a strong directional indicator, based on direction of the open and close of the trading day. Buy the Eurocurrency at 1,4825 stop, with the protective stop at 1.4675.
December Japanese yen – As the US dollar continues to lose favor, the Yen continues to gain favor. The recent three-day correction found support at the 20-day SMA and quickly rebounded to closed near the high of the daily range. The separation form the low to the close is a positive indicator that the Yen has ended the corrective sell-off and is poised for a test of the recent high of 1.1386 from October 10. Buy the Japanese yen at 1.165 stop, with the stop loss at 1.1055.
November Crude oil – I don’t have a position in Crude oil right now, but I want one. However, I need to see a snapback to the 20-day SMA to provide a lower risk entry point, rather than just jumping on the Crude wagon. The market has just traded above the prior swing high—73.84 on October 12—so Crude could stage a short-term correction very soon and give us the trade “setup” to enter the Crude.
November Heating oil – Long from 1.8495 – Heating oil surged out of the bullish TR swing pattern on Monday and closed above the (C) pivot high for the second day in a row. That is a positive indicator for heating oil to make a run for the short-term ascending reaction line target objective of 1.9700. Hold the long position, with the stop loss at 1.8495.
December Gold – The surging Gold market paused with the last two day’s entire trading ranges staying inside last Thursday’s trading range. The market is overdone, but the upward trend remains intact. Gold could encounter one more push to the sloping reaction target objective of $1.070.00, the October 14th reversal swing day.
December Corn – Long from $3.43 – last price $3.81 ¼ – December corn closed up 19 cents after several northern Midwest states experienced snow, rain, and freezing temperatures over the weekend. December Corn breached the old high at $3.76 and closed above the ascending centerline. Hold the long position and raise the profit stop to $3.72.