KEY TERMS
OVB: Outside Vertical Bar
VRCB: Volatility Reduced Compression Bar
Core Position: $50,000,000
PowerShares DB Agriculture (DBA):
08/24/2012 Closing Price: 29.91
INTERMEDIATE TERM (I.T.) SIGNAL:
Intermediate Term Trend is bullish.
Current Position: FLAT
Current Downside Targets = 27.94 – 27.40
Projected Weekly Range: .49
Trading 185,000 Shares
I.T. ANALYSIS:
- Initial trade risk was $138,750 or .28%. Current trade risk is $99,900 or .20%.
- DBA is a comprehensive agricultural ETF. Holdings include fairly equally-weighted futures contracts in sugar #11, live cattle, corn, soybeans, cocoa, coffee, lean hogs, wheat, and cattle feeder.
- Following three consecutive VRCBs, DBA rallied early last week on the bullish momentum of wheat, corn and soybeans. Commodity prices then fell back down to Monday prices with DBA closing out below the midrange and slightly above the open. Price action is bullish divergent, establishing a much higher-high and higher-low. Friday’s close in the bottom quartile is a bearish indicator showing short-term resistance near an I.T. top. The complete failure to violate 30.44 in the last three weeks leaves us bullishly optimistic as we still believe the ag’s have greater upside potential. A correction down to our current price target range will be ideal for entering a long position.
iPath DJ-UBS Grains (JJG):
08/24/2012 Closing Price: 63.45
INTERMEDIATE TERM (I.T.) SIGNAL:
Intermediate Term Trend is bullish.
Current Position: LONG @ 62.25 on 08/20/2012; STOP @ 62.25
Current Upside Target = 70.95
Projected Weekly Range: 2.69
Trading 87,000 Shares; COVERED 17,400 @ 64.45
I.T. ANALYSIS:
- JJG is concentrated in agricultural grain futures, holding 46% soybeans, 30% wheat and 24% corn.
- Initial trade risk was $191,400 or .38%. Current trade risk is 0%. Current trade profits are $121,800 or .24%.
- We entered our long position last Monday coming off a low-risk VRCB buy signal. Initial risk was so low that we also covered 20% of our position the following day at 64.45 and moved our STOP to the entry price of 62.25. Price action for JJG was exceptionally bullish yet Friday’s close near the midrange wasn’t as strong as we had hoped. Currently trading at prices not seen since July 2008, we believe JJG still has greater upside potential and will meet our upside target within the near future. Look for slightly higher trading this week with the slight probability of a substantial breakout.
SPDR Gold Shares (GLD):
08/24/2012 Closing Price: 161.97
INTERMEDIATE TERM (I.T.) SIGNAL:
Intermediate Term Trend is bullish.
Current Position: FLAT
Current Upside Target = 165.88
Projected Weekly Range: 3.56
Trading 35,000 Shares
I.T. ANALYSIS:
- GLD’s single holding is gold bullion.
- GLD finally made a considerable move through the long-term resistance level of 158. We have been waiting for this bullish move since mid-June when we first reported on the high probability of seeing 160 before retesting yearly lows yet just missed our buy entry put out last week after gapping higher Tuesday. Price action was very bullish as GLD displayed the strongest I.T. buying pressure since the week ended June 1, 2012. Friday’s close in the top 10% of the weekly range indicates 163.02 should trade this week. Last week also confirmed a lower bottom had finally formed, reversing the I.T. trend to bullish. If momentum continues and our upside target is achieved, look for a revised, more aggressive price target to follow.
In this morning’s ETF Intermediate Weekly Report on (GLD), our current gold position was indicated as FLAT based off missing the fill price issued in last week’s report trying to go LONG this market at 157.81. This is due to the fact that this report only goes out once per week on Monday with no updates intraweek to our non-paying viewers. It is important to note, however, that our intraweek signal did get filled LONG this market on Tuesday’s GAP opening at 158.81 after violating the high of the week ending 08/10/12 of 157.82 which our subscribed clients were privy to with intraweek updates that are distributed when necessary.
08/24/2012 Closing Price: 44.13
INTERMEDIATE TERM (I.T.) SIGNAL:
Intermediate Term Trend is bearish.
Current Position: LONG @ 43.67 on 08/21/2012; STOP @ 42.59
Upcoming Break-Even Price: 45.05; COVER 20%
Current Upside Target = 47.91
Projected Weekly Range: 1.45
Trading 128,000 Shares
I.T. ANALYSIS:
- Initial trade risk was $188,160 or .38%. Current trade risk is $138,240 or .28%. Current trade profits are $58,880 or .12%.
- JJC is an ETN that holds only a single commodity, the Copper High Grade futures contract.
- We entered a long position last Tuesday on a dual VRCB combination. The VRCB provides low risk trade entries and last week’s strong close increased the probability of a successful trade. Price action was clearly bullish last week, closing strong in the upper 25% of the weekly trading range. Once Tuesday traded 43.76, the I.T. trend confirmed a slightly lower bottom and reaffirmed the bearish trend. We believe a bullish trend reversal will occur on the current rally after running into strong resistance near 45.25. Trading should be higher this week with a small probability of correcting back down to our stop of 42.59.
United States Oil (USO):
08/24/2012 Closing Price: 35.68
INTERMEDIATE TERM (I.T.) SIGNAL:
Intermediate Term Trend is bearish.
Current Position: FLAT
Working Orders: SHORT @ 35.48; STOP @ 36.46
Upcoming Break-Even Price: 34.50; Cover 20%
Current Upside Target = 35.85 – 37.87*Extended Upside Objective
Projected Weekly Range: 1.33
Trading 159,000 Shares
I.T. ANALYSIS:
- Upcoming initial trade risk is $155,820 or .31%.
- USO seeks to replicate the spot price of WTI light, sweet crude oil and primarily holds futures contracts.
- We stated back in July that any rally above 35 would be analyzed for optimal short entry positions. Last week, USO formed a VRCB at the top of an I.T. rally above 35. We strongly believe this is a great opportunity to take advantage of a low-risk trade. We are issuing a short position at 35.48 with a STOP at 36.46. To further limit risk, if 34.50 trades this week, we will cover 20% of our position. Price action last week was bullish divergent. Although USO made higher highs and lows, Friday closed below it’s open, weekly midrange, and previous close. These indicators, paired with the change in short-term rate of change, lead us to believe trading will be to the downside this week.
United States Natural Gas (UNG):
08/24/2012 Closing Price: 18.38
INTERMEDIATE TERM (I.T.) SIGNAL:
Intermediate Term Trend is bullish.
Current Position: SHORT @ 20.39 on 08/09/12. STOP @ 20.39
Current Downside Targets = 17.27 – 16.36
Projected Weekly Range: 1.56
Trading 100,000 Shares; COVERED 20,000 @ 18.35
I.T. ANALYSIS:
- Initial trade risk was $204,000 or .41%. Current trade risk is $0. Current trade profits are $201,600 or .40%.
- UNG seeks to replicate the price movement of NYMEX Natural Gas by holding futures contracts.
- We covered 20% of or position last week, locking in $40,800 in profits. Our STOP price has been moved down to our entry price, guaranteeing a profitable trade. UNG displayed slightly bearish price action last week, barely making lower highs and lows while firmly closing out the week in the bottom 3% of the weekly range. If strong selling resumes early this week, look for 17.35 to trade by Friday. UNG is only .11 off our August low projection, any movement past this price is beyond our estimates. We still believe the previous bottom of 15.18 will not be violated on the current correction.
08/24/2012 Closing Price: 124.35
INTERMEDIATE TERM (I.T.) SIGNAL:
Intermediate Term Trend is bearish.
Current Position: LONG @ 122.23 on 08/09/12. STOP @ 122.23
Current Upside Target = 125.59
Projected Weekly Range: 1.93
Trading 100,000 Shares; COVERED 20,000 @ 124.74
I.T. ANALYSIS:
- Initial trade risk was $251,000 or .50%. Current trade risk is $0. Current trade profits are $219,800 or .44%.
- FXE seeks to track the movement of the Euro currency.
- The euro saw significant support last week, opening Monday at 122.40 and rallying up to make a weekly high of 125.13. We exited 20% of our current long position at 124.74 on Thursday, profiting $50,200. FXE moved high enough for our complete STOP price to be moved up to our entry price of 122.23. Price action was very bullish and Friday’s close definitively indicates the direction of this week’s trading. Expect prices to surpass our upside target of 125.59 with very little chance of trading back down to 122.35 beforehand.
iShares MSCI Emerging Markets Index (EEM):
08/24/2012 Closing Price: 40.05
INTERMEDIATE TERM (I.T.) SIGNAL:
Intermediate Term Trend is bullish.
Current Position: SHORT @ 39.97 on 08/23/2012. STOP @ 40.85
Break-Even Price: 39.09; Cover 20%
Current Downside Target = 37.05
Projected Weekly Range: .85
Trading 135,000 Shares
I.T. ANALYSIS:
- Initial trade risk was $118,800 or .24%. Current trade risk is the same. Current trade losses are $10,800 or .02%.
- EEM seeks to replicate the performance of the MSCI Emerging Markets Index by investing in the underlying international securities.
- Our short entry position was filled last week at 39.97 after EEM violated the previous week’s high. This formed an OVB to the previous two weekly VRCBs. Such patterns rarely occur and Friday’s close to the downside are all strong signals for a continuation of downward movement. If directional momentum continues, look for our break-even price of 37.05 to be achieved where 20% of the short position will be covered. There is a 78% chance 39.69 will trade before rallying back up to 40.85. Keep this in mind as we are currently above our entry price of 39.97, providing a second chance to enter a short position.
SPDR S&P 500 (SPY):
08/24/2012 Closing Price: 141.51
INTERMEDIATE TERM (I.T.) SIGNAL:
Intermediate Term Trend is bullish.
Current Position: FLAT.
Current Upside Targets: 145.55 – 147.05
Projected Weekly Range: 2.16
Trading 39,000 Shares
I.T. ANALYSIS:
- SPY seeks to track the movement of the S&P 500 Index.
- SPY experienced very volatile movement last week as new highs on Tuesday were followed by a correction back down to Friday. SPY closed out the week with an OVB forming on Friday’s daily bar, indicating trading should be higher on Monday and Tuesday. The short-term, I.T. and major term trends are all bullish and we strongly believe there is still greater upside potential. Look for an early intraweek rally to occur, violating 143.10 before 140.21. We believe our upside price targets could be achieved by the end of Q3 if strong closes and momentum continue. Any correction of at least 10 points off the current high will be analyzed for optimal buy entries.
