Commodity ETFs face resistance, some upside visible

INTERMEDIATE TERM SIGNALS & MARKET ANALYSIS

CurrencyShares Euro Trust (FXE):
09/07/2012 Closing Price: 127.29

INTERMEDIATE TERM (I.T.) SIGNAL
:
Intermediate Term Trend is bullish.
Current Position: LONG @ 122.23 on 08/09/12. STOP @ 124.78
Current Upside Target = 125.59 – 131.41
Projected Weekly Range: 2.26
Trading 100,000 Shares; COVERED 20,000 @ 124.74, COVERED 30,000 (30%) @ 125.59

I.T. ANALYSIS:

  • Initial trade risk was $251,000 or .50%. Current trade risk is $0. Current trade profits are $404,000 or .81%.
  • FXE seeks to track the movement of the Euro currency.
  • Our upside price target of 125.59, established on 08/05/12, was achieved to the tick on the previous week’s high. FXE is continues to perform exceptionally well and currently our most profitable position. Our long trade was entered based on a dual VRCB OVB weekly pattern, a combination with relatively low risk yet very high probabilities of success. Since our favorable fill price of 122.23, FXE is yet to violate the previous week’s low, a sign of steady buying pressure. Once 126.75 was traded last week, the I.T. trend was reversed from bearish to bullish, a rare change occurring only once every 22 weeks. Look for prices to climb higher towards our revised price target of 131.41

iShares MSCI Emerging Markets Index (EEM):
09/07/2012 Closing Price: 40.64
INTERMEDIATE TERM (I.T.) SIGNAL:

Intermediate Term Trend is bullish.
Current Position: FLAT
Current Downside Target = 37.05
Projected Weekly Range: .93
Trading 135,000 Shares

I.T. ANALYSIS:

  • EEM seeks to replicate the performance of the MSCI Emerging Markets Index by investing in the underlying international securities.
  • Our EEM short position was stopped out last week as markets rallied strong on Thursday and Friday. After violating the previous week’s low of 38.84, EEM rallied to trade 39.90, forming an OVB. This formed an I.T. top yet wasn’t supported by the bullish close. Price action was bullish, confirmed by Friday’s close in the upper 1%. Emerging countries struggle to find solid ground and are yet to see the support and directional movement of domestic markets. Our current position is flat due to market volatility reducing the probability of successful trades.

SPDR S&P 500 (SPY):
09/07/2012 Closing Price: 144.33
INTERMEDIATE TERM (I.T.) SIGNAL
:
Intermediate Term Trend is bullish.
Current Position: LONG @ 142.09 on 09/06/12. STOP 142.09
Current Upside Targets: 145.55 – 147.05
Projected Weekly Range: 3.01
Trading 39,000 Shares – COVERED 3,900 (10%) @ 144.06 – COVER 7,800 (20%) @ 145.55

I.T. ANALYSIS:

  • SPY seeks to track the movement of the S&P 500 Index.
  • After an underwhelming previous trading week, SPY continued the strong rally, making new four year highs. Tuesday’s trading violated the previous week’s low by six points then was followed by significant buying on Thursday, exceeding the previous week’s high of 142.08, forming an OVB. Price action was bullish and Friday’s close in the upper 2% indicates trading should be much higher this week with very little chance of retracing back down to last week’s low. SPY has already achieved 96% of our original price target of 145.55, established on June 16, 2012 at a closing price of 134.14. Last week’s breakout was greatly needed to continue the current rally and postpone any upcoming correction. Be aware of the FOMC announcement on Thursday in which investors are anticipating the announcement of QE3. Expect markets to collapse if no federal stimulus is declared.

Parrish Hicks 2012 ETF Performance Report

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About the Author
Jim Parrish, Kris Hicks and Robert Calhoun

Parrish Hicks Capital Research is a trading and technical analysis firm that specializes in Energy and Metal commodity futures. The two founders, Jim Parrish and Kris Hicks, have a combined 38 years’ experience in the commodity business and in 2011 accurately forecasted both $25 moves to the downside in May and July and the $25+ move to the upside in October. They also called the all-time high day for Gold on September 6, 2011 and forecasted a projected downside target of 1528.10 in March 2012.  Their trading methodology has a high degree of accuracy which confirms tops/bottoms, projected trading ranges and projected targets for those ranges. Their expertise is focused on 16 commodities plus the comparable ETF markets. You can reach them at Jim@ParrishHicks.com and Kris@ParrishHicks.com or at www.ParrishHicks.com.

IMPORTANT DISCLOSURE

Transactions in ETF (Exchange Traded Funds) carry a high degree of risk. This material is not intended as an offer or solicitation for the purchase of any financial instrument. The data and these comments are provided for information purposes only and may or may not be intended to be used for specific trading strategies. ETF trading is risky and Parrish Hicks Capital Research assumes no liability for the use of any information contained herein. Any examples are strictly hypothetical and no representation is being made that any person will or is likely to achieve profits or losses similar to those examples. ETF strategies mentioned herein may not be suitable for all investors. The opinions and recommendations herein do not take into account individual client circumstances, objectives or needs and are not intended as recommendations of a particular ETF or ETF strategies to a particular client. The recipient of this report must make his own independent decisions regarding any ETF instrument to a particular client.

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