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Below are the opportunities I will be monitoring in August.
KC – Coffee
Coffee had its first corrective phase of the recent uptrend in July but looks to have stabilised at the 40 SMA. If prices can surpass the 61.8% retracement of the corrective range Coffee may present a good buying opportunity.
CL – Crude Oil
Oil prices collapsed in July trading down to the 61.8% retracement of the recent uptrend. If prices can break this level a target around the $20 mark could be possible. I almost traded Oil when prices broke the 200 and 100 SMA’s but taking the trade would have taken my total capital risk well outside my target 10% range. It disappointing to see a potential trade turn profitable after a decision not to enter but staying disciplined should be much more profitable in the long run.
NG – Natural Gas
Natural Gas prices corrected during July after the recent strong uptrend. Prices held the 40 SMA and then rallied strongly surpassing the 61.8% retracement of the corrective range. Less than half the body of the candle was above the retracement level and the following day was a doji so an entry has not yet been triggered.
DX – US Dollar Index
The Dollar surpassed the slightly rising 200 SMA during July and looked to be turning bullish again. I tried to buy the Dollar on the re-test of the 200 SMA and narrowly missed my entry. My instincts thought the Dollar was going further to the downside so I pulled the order before the opening of the next session. The decision turned out to be the right one with prices collapsing on the last day of the month. I am now neutral where the dollar is concerned. If prices can surpass the 61.8% retracement of the wider downtrend at 97.80 the Dollar will look bullish but if prices decline further through the 61.8% retracement of the recent uptrend at 94.08 the Dollar will look bearish.
Can you help answer these questions from other members on NexusFi?
Below are my comments on the opportunities I’m watching based on the day’s price action.
HE – Lean Hogs
Hogs rallied strongly today. The recent selloff was very sharp so it’s not surprising to see a rally. I’m waiting to see how this rally plays out before re-entering.
CL – Crude Oil
Oil was lower today closing just below the 61.8% retracement of the recent uptrend and posting a bearish full bodied candle.
NG – Natural Gas
Natural Gas failed the 61.8% retracement level today posting a bearish full bodied candle.
Below are my comments on the opportunities I’m watching based on the day’s price action.
HE – Lean Hogs
Hogs continued to rally today but reversed around the 62 level to finish the day lower and post a candle with a long upper shadow.
CL – Crude Oil
Oil pushed back above the 61.8% retracement of the recent uptrend during the session but failed at this level to finish the day lower and close below the $40 level.
DX – US Dollar Index
The Dollar was sharply lower again today posting another bearish full bodied candle.
Below are my comments on the opportunities I’m watching based on the day’s price action.
HE – Lean Hogs
Hogs were lower today posting a bearish full bodied candle.
CL – Crude Oil
Oil bounced today closing back above the 61.8% retracement level and posting a bullish full bodied candle.
NG – Natural Gas
Natural Gas surged higher today closing back above the 61.8% retracement level and posting a bullish full bodied candle.
LE – Live Cattle
Cattle has been surging higher this week. If prices can surpass the 200 SMA and the 61.8% retracement of the recent range it may be a good buying opportunity.
Nice work on this Hogs trade! Noticing a limit order at 62 on this chart? Yesterday's shooting star and follow through would tempt me to jump in short, but I bet the smart move is actually to wait for higher price just as you are doing. 62 could be tested again.
I was actually tempted to just short it at the open after the shooting star yesterday but after the pace of the break so far I would rather wait for a pull back to the 15 SMA to get on board again with a better risk reward.
In the past I definitely would have chased it but I'm trying to be more patient and let the market come to me. Let's hope it works.
I’ll start the weekly update with comments on the markets I see opportunities in.
HE – Lean Hogs
Hogs attempted to rally at the start of the week but the rally quickly fizzled out and the downtrend resumed. Prices held at the November lows to finish the week. I am waiting for a pull back to the short term moving averages to get Short again.
LE – Live Cattle
Cattle was strong on Monday and continued to grind higher for the rest of the week. Prices are approaching the flattening 200 SMA and the 61.8% retracement of the recent range and if these levels can be exceeded it may present a good buying opportunity.
NG – Natural Gas
Natural Gas traded back down through the 61.8% retracement level early in the week but held at the 40 SMA. Prices were strong on Wednesday surpassing the 61.8% retracement level again but this level failed again on Friday. A break of this level with impulsiveness could present a good buying opportunity.
CL – Crude Oil
Crude traded down through the 61.8% retracement of the recent uptrend early in the week but quickly turned around to trade back up through this level. I am neutral on Oil at this stage.
DX – US Dollar Index
The Dollar traded lower early in the week testing the 95 level. Prices turned higher on Wednesday and rallied strongly on Friday after the employment data but ran into resistance at the short term moving averages to finish the day off the highs. I am looking for prices to exceed the 61.8% retracement of the major range at 97.80 before contemplating buying.
KC – Coffee
Coffee was lower this week putting in a new low for the correction in Thursday’s trade but prices quickly recovered to finish the week back at the 40 SMA. I am looking for prices to exceed the 61.8% retracement of the corrective range at 1.48 before contemplating buying.
SB – Sugar
Sugar rallied strongly on Thursday and Friday finishing the week just above the 61.8% retracement of the recent corrective range. Confirmation of the break of this level could present a good buying opportunity.
CT – Cotton
Cotton broke out of the recent consolidation range on Thursday and pushed above the 61.8% retracement of the major range on Friday. Price closed well off the highs on Friday providing some doubt as to whether the break of the 61.8% retracement level is credible.
Copper was lower this week trading back down to test the 200 SMA.
ZS – Soybeans
Soybeans broke through the 61.8% retracement of the recent uptrend early in the week but bounced from the nearby 200 SMA and closed the week just above the 61.8% retracement level.
GC – Gold
Gold surpassed the 61.8% retracement of the recent corrective range on Tuesday but fell back through this level on Friday after the employment report finishing the week on a bearish note.
6E - Euro
The Euro surpassed the 200 SMA again early in the week but fell back down through this level on Friday after the employment report. If prices can break the 1.10 level the Euro could move towards parity.
ZN - 10 Year Note
The Notes held the 40 SMA during the week but broke through this level on Friday after the employment report finishing the week on a bearish note.
Trade: Long 1 contract of October Sugar
Entry Price: 0.2045
Risk: 0.1983 risking $695
Target: Short Term – 0.2277, Long Term 0.2640
Reasons for entering the trade:
Technical: Prices penetrated the 61.8% retracement of the recent correction.
Fundamental: A deficit in supply is expected this year.
Daily Comment: Prices were strongly higher again today but finished well off the highs posting a candle with a long upper shadow. The weak close provides doubt as to whether the break of the 61.8% retracement level is credible. I will wait for confirming price action tomorrow before deciding whether to stick with this trade.
Below are my comments on the opportunities I’m watching based on the day’s price action.
HE – Lean Hogs
Hogs bounced higher today but finished well off the highs posting a candle with a long upper shadow. Prices did not rise high enough to intersect with the 15 SMA today.
GE – Eurodollar
The December 16 contract broke the 200 SMA today. If this break is credible it may be the start of a long term change of trend. Further confirming price action is needed before making this conclusion.
