Commodity ETFs see reduced volatility and volume

INTERMEDIATE TERM SIGNALS & MARKET ANALYSIS

CurrencyShares Euro Trust (FXE):
09/21/2012 Closing Price: 129.05
INTERMEDIATE TERM (I.T.) SIGNAL
:
Intermediate Term Trend is bullish.
Current Position: LONG @ 122.23 on 08/09/12. STOP @ 127.72 OR Weekly Close Below 128.39
Current Upside Targets= 131.41 – 137.89
Projected Weekly Range: 3.03
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 $492,000 or .98%.
  • FXE seeks to track the movement of the Euro currency.
  • Our current FXE long position has performed well since initiated in early August. Our long-term outlook has been less than optimistic for the euro, which has resulted in covering 50% of our position. Open trade profits are the highest of all our current position and have locked-in a total of $425,500 or .85%. FXE struggled last week, violating the previous week’s high by only 3 points, then falling back down below 129. Price action was bullish divergent, closing out the week in the lower 25% of the trading range. If the short-term trend follows through this week, expect trading to be slightly lower. Pay close attention to our current stops: a range violation at 127.72 or a weekly close below 128.39.

iShares MSCI Emerging Markets Index (EEM):
09/21/2012 Closing Price: 41.78
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.
  • As with most other markets, EEM experienced reduced volatility and trading volume last week. Price action was nondirectional with a lower high and higher low and close near the midrange. Expect trading to remain relatively flat for this final week of September. After the previous week closed above the resistance Bollinger band, trading has been consistently lower. We stand by our expectation that EEM will rally back to retest May 2011 prices before trading below October 2011 levels. Monthly trading range expectations of 2.85 have already been exceeded; trading above 42.83 is exceptional and abnormal. We maintain our flat position until volatility normalizes and lower risk trades can be placed.

SPDR S&P 500 (SPY):
09/21/2012 Closing Price: 147.19
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: 3.49
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.
  • Initial trade risk was $76,830 or .15%. Current trade risk is $0. Current trade profits are $173,901 or .35%.
  • SPY seeks to track the movement of the S&P 500 Index.
  • Our current long position in SPY has remained a solid performer, currently sitting with $0 in trade risk. After two weeks of strong buying, SPY has begun to see an increase in selling pressure. Last week’s reduced trading range is largely contributed to an equalization of buyers and sellers, not from a reduction in volume. Price action was nondirectional to slightly bearish; the lower high and higher low was offset by Friday’s close in the lower 25% of the weekly trading range. SPY is yet to experience a confirmed correction since the current rally began in early June; we believe this will change by the end of the year. Friday’s close and the significant increase in sellers indicate trading should be slightly lower this week. Pay close attention to our current range violation stop price of 143.45.

Parrish Hicks 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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