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Trader's Tip
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Don't cry over spilled milk. Forget yesterday's losers. Every day is a fresh start. And don't blame "the market" for your losses.
- Jim Wyckoff |
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Special Message from Our Author
Today's Featured Article
Hello Fast Break
readers. I very much enjoy showing you some of my work and I hope you enjoy and benefit from it. Today, I want to show you my latest bi-weekly newsletter from earlier this week. Aside from my daily comprehensive email reports, twice a month I produce a report that takes a longer-term technical view of selected futures markets. Below you can check out the key, longer-term technical support and resistance levels on the markets you are trading. Don't forget that most markets are somehow inter-related and react to each other's significant price moves. It's a concept called "Intermarket analysis" and veteran traders know its significance. My friend and longtime software developer Louis
Mendelsohn is a pioneer in Intermarket analysis. It's not prudent for traders to just follow one market closely, especially nowadays.
Continuous Commodity Index: The CCI is a basket of 17 major raw commodity futures prices rolled into one composite index price. It's an excellent barometer of the general trend in commodity-futures markets. VantagePoint looks at 25 related markets when predicting the CCI with up to 86% accuracy* - go here to see how.
The monthly continuation chart for the nearby Continuous Commodity Index shows that a 14-month-old uptrend is in place and the CCI during January hit a fresh 16-month high. However, the CCI in January backed way down from the monthly high and at the end of the month finished near the monthly low. This price action produced a rare and technically bearish "outside month" down on the monthly CCI chart -- the high was higher and the low was lower than the previous month's trading range. This is an early longer-term bearish technical clue that a market top is in place in the CCI. If there is follow-through weakness in the CCI during February, including a finish near the monthly low at the
end of this month, then that would be another bearish clue to more strongly suggest a major top is in place in the index.
 If you cannot view the CCI chart,
go here. Corn:
See on the weekly continuation chart for nearby corn futures that prices have been trading in a choppy and sideways pattern for 13 month, after having scored a new all-time record high in 2008. Just recently, the weekly corn chart has seen a "collapse in volatility," whereby recent weekly trading bars have become much smaller in relation to previous weekly price bars on the chart. This collapse in volatility suggests a bigger price move in corn futures, on a weekly degree basis, is very likely on the horizon. Nearby corn futures prices are also trading in the middle of the longer-term technical support and resistance levels seen on the chart. I suspect the likely bigger price move
upcoming will see prices challenge or penetrate the support or resistance level drawn on the weekly chart.
 If you cannot view the Corn chart,
go here. |
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Chicago Wheat:
Bears have the near-term and longer-term technical advantage in wheat. The path of least resistance for soft red winter wheat futures remains sideways to lower. See on the weekly continuation chart that an eight-month-old downtrend is in place. It will take a move in nearby Chicago wheat futures above solid flat-line and trend-line resistance at $5.50 a bushel to begin to suggest a longer-term price uptrend can be sustained. Otherwise, it appears nearby wheat futures are poised to challenge longer-term technical support at the 2009 low of $4.39 a bushel, or below. Interested in tomorrow's trading range?
VantagePoint can provide traders with trend forecasts that are up to 86% accurate* for 1-3 days ahead.
 If you cannot view the Wheat chart,
go here.
Soybeans: The weekly continuation chart for nearby soybean futures at the Chicago Board of Trade shows prices are in a longer-term downtrend. It's going to take a weekly close above major psychological resistance at $10.00 a bushel in nearby soybean futures to provide the bulls with fresh longer-term technical strength and to suggest the downtrend on the weekly chart has ended.
 If you cannot view the Soybeans chart,
go here.
Cotton: A shockingly bullish USDA supply and demand report for cotton issued last week has quickly re-established a longer-term price uptrend on the weekly continuation chart for nearby cotton futures. Now, the next longer term, upside price objective for the re-charged cotton market bulls is to push prices above longer-term chart resistance at the 2009 high of 76.58 cents. Above that lies longer-term chart resistance at 79.00 cents. A weekly close below strong chart support at 70.00 cents in nearby cotton futures would produce longer-term chart damage to suggest the price uptrend has run its course.
 If you cannot view the Cotton chart,
go here.
Gold:
The weekly continuation chart for nearby gold futures shows that some longer-term technical damage has been inflicted. See that two uptrend lines on the weekly chart have been penetrated on the downside and negated. Meantime a nine-week-old downtrend line has formed on the weekly chart. See at the bottom of the weekly gold chart that the Moving Average Convergence Divergence (MACD) indicator is also in a bearish posture, as the thick blue MACD line is below the thin red "trigger" line, while both lines are also trending lower. The gold-futures market will very likely continue to trend in an inverse relationship with the U.S. dollar index. If the dollar index continues to trend
higher, as has been the case in recent weeks, then the path of least resistance for gold futures will continue to be sideways to lower. This scenario is an example of how different markets all have interrelated relationships with other markets; no one market acts alone. This is the basis behind VantagePoint which combines the breadth and depth of intermarket analysis with the trend-leading properties of predicted moving averages to produce what every trader needs -- highly accurate forecasts of short-term market direction.
 If you cannot view the Gold chart,
go here. |
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Crude Oil:
The uptrend on the weekly continuation chart for nearby crude-oil futures has recently "rolled over" into a choppy and sideways trading range. It's likely that in the coming weeks, crude oil will continue to trade in a choppy and sideways fashion, between solid overhead longer term, technical resistance at the January high of $83.95 a barrel and the December 2009 low of $68.59, basis nearby futures. The direction in which nearby-crude oil futures "break out" of the trading range bound by the aforementioned support and resistance levels on the weekly chart is very likely to be the direction of the next significant longer-term price trend in the market.
 If you cannot view the Crude Oil chart,
go here.
S&P 500: There are now early technical clues on the weekly continuation chart for nearby S&P 500 futures that prices have put in a market top. See that an uptrend line on the weekly S&P 500 chart has been penetrated on the downside and negated. See, too, at the bottom of the weekly chart that the Moving Average Convergence Divergence (MACD) indicator is now in a bearish posture, as the thick blue MACD line is below the thin red "trigger" line, and both lines are trending lower. A drop in nearby S&P 500 futures below major support at the 1,000.00 level would produce some longer term, chart damage to more strongly suggest a market top is in place.
 If you cannot view the S&P 500 chart,
go here.
U.S. Dollar Index:
The U.S. dollar index is a basket of six major currencies weighted against the greenback in one composite index. See on the weekly continuation chart for nearby U.S. dollar index futures that prices have been trending higher since the late-November 2009 low. Prices recently hit a fresh six-month high. See, too, at the bottom of the weekly dollar index chart that the Moving Average Convergence Divergence (MACD) indicator is in a bullish posture, as the thick blue MACD line is above the thin red "trigger" line, and both lines are trending higher. The MACD lines are also in the same posture as they were in late-spring, early summer of 2008 -- just after which time the U.S. dollar index
trended strongly higher. Go here to get complimentary recent market forecasts for the U.S. dollar and other major currencies.
 If you cannot view the U.S. Dollar Index chart,
go here. |
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About the Author
Jim Wyckoff is the senior market analyst with TraderPlanet.com
. TraderPlanet.com, a Tampa Bay, Fla.-based financial social networking site, provides individual traders of all skill levels a one-stop destination for financial information and trading tools. TraderPlanet.com is the only financial social networking site that offers its members a full suite of market data feeds, advanced technical analysis tools and exclusive analyst commentary across asset classes, while enabling members to give back to the broader world community through gift-giving to charitable causes. Designed to level the playing field between institutional and individual traders, TraderPlanet.com's fully interactive, multi-media rich platform is designed to promote the free-flow
exchange of ideas through questions, answers and comments designed to improve trading strategies and investment performance.
Jim has spent nearly 25 years involved with the stock, financial and commodity markets. He was a financial journalist with what is now the Dow Jones Newswires service for many years, including stints as a reporter on the rough-and-tumble commodity futures trading floors in Chicago and New York. As a journalist, he has covered every futures market traded in the U.S., at one time or another. Not long after he began his career in financial/commodity market journalism, Jim began studying technical analysis. By studying chart patterns and other technical indicators, Jim realized the playing field could be leveled between the "professional insiders" in the markets, and traders/analysts like
himself. As a proponent of Intermarket Analysis, VantagePoint Intermarket Analysis Software is one of the tools in Jim's tool-box. |
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Special Message from Our Author
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