December Dow Jones - Dow Jones futures closed higher, rebounding from the first two-week decline since July, after the market found support at the junction where the descending centerline and reaction line crossed. These two lines provided support and offered a reason to cover short positions before the expected rebound. I expect to see the corrective rally continue on Tuesday and carry the market into the 9651 to 9744 price range on or before the October 7th reversal swing day. I'll stand aside and watch the market action into the October 7th swing date.
December Japanese yen – Japan's Finance Minister Fujii said that his country still needs fiscal and monetary support and that his government was willing to take action against the yen, if the price moves got too extreme. Statements like this are hanging over the Yen and keeping traders cautious. The charts patterns are also reflecting the confusion and uncertainty as the Yen continues to consolidate at the descending reaction line. This line will continue to act as a resistance until a new swing pattern forms. Until then, it is best to wait on the sidelines until a new direction is confirmed.
December Eurocurrency – The dollar declined as traders moved out of the dollar and into the euro, after Goldman Sachs Group Inc. suggested that large banks and U.S. service industries have expanded, encouraging investors to buy riskier assets at the expense of the greenback. Looking at the December Euro chart, I see the market bounced off the lower parallel line and closed well off the low on Friday. However, the market has been forming a longer-term TR (trend reversal) swing pattern over the past two weeks and this rebound is putting the Euro up against the 60% sell window (1.4700). While the overall trend is still bullish, the market is at the end of the cycle and trading into a reversal swing day, due on Tuesday. I will wait to see how the market reacts to the reversal swing day before taking a position.
December Canadian dollar – Short from 9215 – last price @ 9330. After breaking out of the lower side of the 60% sell window, the Canadian dollar has rebounded to the descending parallel reaction line. This level should prove to be an important level of resistance or a breakout level to launch the next upward swing. - Hold the short position, with the stop loss at 9375.
November Crude oil –The fundamental information is bearish, as jobs losses are mounting and oil supplies are rising. All the recent economic data is undermining the bull's oil case, but the chart patterns are saying something different to me. The market is forming a bullish TR swing pattern at the end of a 5-wave continuation pattern. Crude dipped below the 20-day SMA for a short time during the trading session, but closed above the SMA. - Buy Crude at 70.96 stop, with a stop loss at 68.03.
November Heating oil – Heating oil has formed a bullish TR (trend reversal) swing pattern at the end of a 5-wave continuation pattern. - Buy Heating oil at 1.8210 stop, with the stop loss at 1.7375.
December Silver –Silver has formed a bullish TR swing pattern near the lower ascending parallel line of support. This pattern came at the end of the $.1.90 correction and possible continuation pattern. The two-day pullback ended inside the 60% buy window on Friday and rebounded quickly and decisively on Monday. The new swing pattern portends a rally into the October 9th reversal swing date. - Buy December Silver at 16.65 stop, with a stop loss at 15.90. This trade can also be done with the NYLIF mini Silver.
December Gold –A weaker dollar boosted Gold futures and pushed them up to the descending parallel resistance line, where the short position was closed at $1,011.50. The long-term bullish trend overcame the short-term swing pattern sell signal and quickly ended the correction, after finding support at the 20-day SMA. Gold continues to get support from investors on concerns of impending inflation. Tiger Management Chairman, Julian Robertson, says that if China and Japan stop buying our debt, inflation could hit 20 percent. It's almost Armageddon if the Japanese and Chinese don't buy,” Robertson told CNBC. I don't know where we could get the money. I think we've let ourselves get in a terrible situation.
Investment guru, Jim Rogers, has been on the inflation bandwagon for some time and says the United States risks hyperinflation, thanks to the government’s massive fiscal and monetary stimulus. That stimulus also will continue to hurt the dollar, he told CNBC. There's no question the U.S. is vulnerable to hyperinflation down the road or certainly the inflation we saw in the 1970s, I would expect that to come back in the foreseeable future, certainly in the next few years, he said.
The pattern is bullish and Monday’s price action pushed the Gold right up against the descending parallel resistance line. I would like to see a pullback to the 20-day SMA for an entry. Buy Gold at $1,004.50 or lower, with a stop loss at $986.00.
November Soybeans – Short from $9.10 – Hit the Target! - Soybeans dipped below the July 7th low and closed the short position at $8.82 for a nice gain. Soybeans garnered support today and rose from a six-month low and corn gained the most in almost two weeks on speculation that cold, wet weather in the U.S. Midwest will slow harvesting, restricting supplies for makers of food, animal feed and fuel.
December Corn – Corn traders used the 6 to 10-day forecast from the National Weather Service as a reason to buy corn futures and run it past the $3.47 ¾ high, posted on September 15th. Corn reached a high of $3.50 before profit-taking pulled it back to close near $3.41. The TC swing pattern tested the 20-day SMA support early in the daily session before staging a strong recovery into the close. The pattern is bullish and suggests a run at the ascending centerline, as we approach the October 8th and 19th reversal swing days. Buy December Corn at $3.43 or lower, with a stop loss at $3.27.