Metals ETFs bullish following QE3 backing

INTERMEDIATE TERM SIGNALS & MARKET ANALYSIS

CurrencyShares Euro Trust (FXE):
09/14/2012 Closing Price: 130.40

INTERMEDIATE TERM (I.T.) SIGNAL
:
Intermediate Term Trend is bullish.
Current Position: LONG @ 122.23 on 08/09/12. STOP @ 127.72
Current Upside Targets= 131.41 – 137.89
Projected Weekly Range: 2.69
Trading 100,000 Shares; COVERED 20,000 (20%) @ 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 $559,500 or 1.12%.
  • FXE seeks to track the movement of the Euro currency.
  • FXE continued its climb higher last week as volume continues to trade at above average levels. Riding the wave of America’s QE3, the euro soared on Thursday and Friday, trading to new four month highs. Our long position, generated off a low-risk, high-probability entry pattern has performed very well, locking-in profits twice and maintaining open equity of over $400,000. With only half of our original 100,000 shares remaining, we believe in maintaining this position until bearish indicators begin to appear. Price action was exceptionally bullish with Friday’s close up 2.5% over the previous week. We believe resistance will begin to take effect within our upside target range of 131.41 – 137.89; look for a top to form within this area and a correction to follow.

iShares MSCI Emerging Markets Index (EEM):
09/14/2012 Closing Price: 42.37
INTERMEDIATE TERM (I.T.) SIGNAL:

Intermediate Term Trend is bullish.
Current Position: FLAT
Current Upside Target = 48.19 – 49.23
Projected Weekly Range: 1.92
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.
  • EEM experienced very strong buying for the second week in a row. Investor confidence rose tremendously on Thursday with the announcement of QE3, pushing prices back to early 2012 levels. EEM has failed to see the support and directional movement of domestic markets such as the S&P 500, and still lags behind its SPY sibling in performance. Currently near the 75% top-to-bottom retracement point, EEM appears to be retesting the 2012 high of 44.91; we therefore believe an aggressive upside price target of 48.19 is appropriate. Due to the recent number and severity of daily gap-opens, trades are currently too risky to enter and will be approached when volatility normalizes.

SPDR S&P 500 (SPY):
09/14/2012 Closing Price: 147.24
INTERMEDIATE TERM (I.T.) SIGNAL
:
Intermediate Term Trend is bullish.
Current Position: LONG @ 142.09 on 09/06/12. STOP @ 143.45
Current Upside Targets: 154.21 – 159.39
Projected Weekly Range: 3.60
Trading 39,000 Shares; COVERED 3,900 (10%) @ 144.06, COVERED 7,800 (20%) @ 145.55
I.T. ANALYSIS:

  • SPY achieved 100% of our upside price targets of 145.55 and 147.05, established on June 16, 2012 where SPY closed at 134.14.
  • Initial trade risk was $76,830 or .15%. Current trade risk is $0. Current trade profits are $175,266 or .35%.
  • SPY seeks to track the movement of the S&P 500 Index.
  • After four days of nondirectional trading, SPY exploded upward last Thursday. The FOMC said it would begin purchasing $40 billion in mortgage-backed securities a month, without a definite timeline, and planned on keeping interest rates “exceptionally low” until mid-2015. Both domestic and international markets rallied on the announcement and should continue to see higher prices in the coming weeks. Price action was very bullish for the second week, breaking though previous levels of resistance and making new four-year highs. After fulfilling our initial upside targets, we have established an aggressive upside target range which, if achieved, will make new historical highs. Our current position, entered on an OVB bullish buy pattern, has taken profits twice now and locked-in profits equal to our initial risk. As SPY approaches our new targets, we will issue another cover price.

2012 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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