Sep 152014
 

It’s been a long time coming and this may be one more in a long string of false alarms (sell signals) but it would appear to me that the QQQ/$NDX (Nasdaq 100) may be in the early stages of the next significant correction. This first chart below is the same $NDX daily chart found under the Live Chart Links sidebar on the right side of the home page of the site (click here to view the live chart). Note how prices seem to be finally rolling over after the recent extreme overbought reading on the RSI 14. In fact, if we look at the only other such extreme overbought readings on this nearly 4 1/2 year daily chart, we can see that although the initial extreme readings were immediately followed by a correction, it was the second, lower 70+ reading on the RSI that preceded the most powerful corrections. As of now the RSI 14 has just clearly rolled off the second, lower overbought reading following the late June/early July extreme (black arrows on RSI). The blue primary uptrend line remains my next major downside target in the $NDX/QQQ.

$NDX daily Spet 15th

Zooming down to this 120 minute chart of the QQQ, the Q’s look to have broken down from this rounding top pattern on the break below this horizontal support line around the 99.00 level (now resistance). Unless the Q’s manage to regain that level soon, my expectation is for a move down to at least the 94 area, a drop of about 4.4% from current levels.

QQQ 120 minute Sept 15th

Sep 152014
 

WAB daily (4 yr) Sept 15thWAB (Wabtec Corp, aka Westinghouse Air Brake Technologies Corp) will trigger a short entry on a break below 81.50. With an expectation for a minor reaction following the initial tag of the S1 support zone, that level could provide an early target for active traders. Otherwise, T1 at 70.20 is the sole profit target on WAB should a short entry trigger soon.

Sep 152014
 

AA (Alcoa Inc.) will be added directly as an Active Short Trade here around the 16.62 level following the breakdown of this very steep, nearly 12 month old uptrend line. Targets are shown as T1 & T2 on this daily chart and the exact suggested buy-to-cover levels & stops will follow soon. To add to the case for a reversal in the steep advance in AA over the last year would be the fact that the Dow Jones US Aluminum Index ($DJUSAL) has run into the bottom of a significant long-term resistance zone while at rarely seen overbought levels that have historically preceded major tops in aluminum prices.

Sep 122014
 

DBA HoldingsSOYB (Soybeans ETF) will be added directly as an Active Long Trade at current levels (last trade was 20.46). I will make a case for the SOYB long trade below but keep in mind that SOYB is a thinly traded ETF and is one of several active long trade ideas in the soft commodities/agricultural industry. I also plan to likely add DBA (agriculture ETF) which holds the following stakes in various ag related commodities, including a target of 12.5% in soybeans futures.  Click on this DBA holdings chart to view the complete current weightings in DBA. With plenty of liquidity and the added benefit of diversification amongst various agriculture commodities (which can also act as a drag on performance, should some of the components lag), DBA is certainly a viable option for traders or investor seeking exposure to the ag sector at this time. I’m not bullish on all of the components of DBA, hence my reasoning for posting, as well as personally going long only select agricultural commodities at this time. However, with that being said I do think the chart on DBA is setting up bullish and will cover DBA in a separate post soon.

Although one could certainly trade soybean futures in lieu of SOYB, the trade ideas on RSOTC are limited to individual stocks and exchange traded products (ETFs, ETNs, CEFs, etc…) as those are the most popular and accessible trading vehicles for the majority of traders and investors.  Each individual may opt to trade futures contracts, options, or leveraged ETFs as a play on any of the trade ideas shared here. Even with the low volume on SOYB, the spreads do not seem excessive and unlike closed-end funds (CEFs), which often trade at substantial discounts or premiums to the underlying holdings, SOYB trades at NAV. With that being said, I typically prefer to use limit order vs. market orders on thin volume stocks & ETFs.

As with the recent WEAT & CORN trades, SOYB is clearly an attempt to catch a falling knife as prices have been in a powerful downtrend since peaking earlier this year. Therefore, this trade should be considered fairly aggressive until/unless we get some decent evidence of a trend reversal. Looking at the weekly chart of $SOYB (the spot price of soybeans), it appears that soybeans have fallen to the bottom of a decent support zone following a rarely seen overbought reading on the RSI 14. As this chart illustrates, very sharp rallies have immediately followed shortly after the RSI reached oversold levels. In fact, the exact bottoms did not come on the initial oversold reading but very shortly afterwards following a higher low on the RSI, such as we now have.

$SOYB weekly Sept 11th closing price

 

Zooming down to the daily time frame, $SOYB printed a hammer candlestick yesterday which is a potential reversal stick (pending upside follow-thru over the next few sessions). $SOYB also has very strong bullish divergences in place as it just tagged what appears to be the bottom of a descending price channel. My targets for SOYB will be roughly based off of this daily spot price chart as well as soybean futures. T1 (the 1168ish area) is my first & preferred target at Continue reading »

Sep 112014
 

As a follow-up to the previous post with the $CORN (Spot Corn Prices) weekly chart, below is the 5-minute chart of US Corn Futures as well as the weekly chart of CORN (Corn ETF), highlighting the current volume surge which is indicative of a selling climax.

click here to view the live, streaming chart of US Corn Futures. Once the page to Investing.com opens, from the top of the chart select: Instruments/More Instruments & then “U.S. Corn Futures” under the Commodities section.

Sep 112014
 

$CORN weekly Sept 11th

In the most recent update on the CORN (Corn ETF) Long-term Trade idea posted last week, it was stated that CORN had broken the 25.60 support level (below the recent consolidation range) which would likely open the door for a move down to the 340 major support level on $CORN (spot corn prices). Since the original post on the CORN trade idea back on July 28th, I had highlighted two likely scenarios for $CORN: either a bounce from around where $CORN was trading at the time OR a continued move down to the 340 level in which not only bring corn prices down to a key long-term support level and that we would also likely have strong bullish divergences in place on the weekly PPO when/if prices got there.

Although the chart of $CORN (spot prices) is an end-0f-day (EOD) chart, not updated until after the market close each day, I’ve been watching US Corn futures today and so far they kissed a low of 335.87 just a few minutes before I started working on this post and have since reversed sharply so far. Of course the day is still young but regardless of any short-term gyrations, we now have corn prices at key long-term support while extremely oversold (the weekly RSI 14  on $CORN was at an extreme level of 23.73 at yesterday’s close). We have the strong bullish divergences forming on the PPO as well as volume patterns on CORN (corn etf) that are indicative of a selling climax (ditto for WEAT, which I will cover under a separate update).

After stopping out the recent Active Long (swing trade) on CORN last week, I am going to add CORN back on as a new Long Trade idea. I also believe this is an objective area for a new entry or add-on to an existing position for the CORN Long-term Trade idea (investment) that was initiated in the July 28th post.

click here to view the live, annotated weekly chart of CORN

Sep 102014
 

GLD 60 minute Sept 10th

GLD is now within 65 cents of the aforementioned 119.50ish support level while rapidly approaching the apex of this 60 minute bullish falling wedge pattern, complete with positive divergences in place on the RSI & MACD. An upside break above the pattern would likely propel GLD to at least the 122 area, possibly higher.

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