Commodity ETFs run into resistance

INTERMEDIATE TERM SIGNALS & MARKET ANALYSIS

ETF ANALYSIS FOR:

DBA – JJG – GLD – JJC – USO – UNG – FXE – EEM – SPY

KEY TERMS
OVB:  Outside Vertical Bar
VRCB: Volatility Reduced Compression Bar

Core Position:
$50,000,000
Current Profits:
$1,496,166 (2.99%)
(UNLEVERAGED and FULL SHARE VALUE)

PowerShares DB Agriculture (DBA):
09/28/2012 Closing Price: 28.89
INTERMEDIATE TERM (I.T.) SIGNAL
:
Intermediate Term Trend is bullish.
Current Position: FLAT
Current Downside Targets = 28.59 – 28.34
Projected Weekly Range: .84
Trading 185,000 Shares
I.T. ANALYSIS:

  • 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.
  • DBA fell further last week, largely because of a limit down move in live cattle, retracing to price levels not seen since early July. Last week’s close confirmed a correction was in full effect, ending the strong summer rally. Price action was bearish, with a much lower low and lower high. Friday’s gap higher open then strong rally resulted in a weekly close slightly above its midrange, yet still below the weekly open and previous week’s close. The current correction is only $.30 off our downside targets, a price range where we feel the correction will find support.

iPath DJ-UBS Grains (JJG):
09/28/2012 Closing Price: 60.15
INTERMEDIATE TERM (I.T.) SIGNAL
:
Intermediate Term Trend is bullish.
Current Position: FLAT
Current Downside Targets = 56.94 – 55.80
Projected Weekly Range: 2.70
Trading 87,000 Shares
I.T. ANALYSIS:

  • JJG is concentrated in agricultural grain futures, holding 46% soybeans, 30% wheat and 24% corn.
  • The grains experienced very volatile trading last week, trading down the first four days then rallying up on Friday. Price action was bearish divergent, making a lower low and lower high, yet strong bullish close. Last week marks the third consecutive week where price action has been bearish, indicating weakness in the soybean, wheat and corn markets. If volatility maintains, we should meet our downside price targets within the next two weeks, where we will be looking to enter a long position, although we would like to see the current correction trade down to 55 before buying back in.

SPDR Gold Shares (GLD):
09/28/2012 Closing Price: 171.89
INTERMEDIATE TERM (I.T.) SIGNAL:

Intermediate Term Trend is bullish.
Current Position: LONG @ 158.81 on 08/21/2012; STOP @ 168.33 OR Weekly Close Below 170.06
Current Upside Target = 165.88 – 176.15: COVER 7,000 (20%)
Projected Weekly Range: 4.44
Trading 35,000 Shares; COVERED 3,500 (10%) @ 164.12, COVERED 7,000 (20%) @ 169.35
I.T. ANALYSIS:

  • Initial trade risk was $139,650 or .28%. Current trade risk is $0. Current trade profits are $412,825 or .83%.
  • GLD’s single holding is gold bullion.
  • GLD managed to maintain equity for three weeks now, displaying strong support for the gold market. Our long position has performed very well with the current rally, a rally we predicted in early June. While most equity markets were down last week, investors saw gold as a more desirable, less risky investment. Price action was bearish divergent, falling early in the week only to rally back up on Thursday. Friday’s close was above the midrange and open, indicating trading should be to the upside this week. Three weekly closes within $.16 of each other means there currently exists strong resistance above 172. Look for trading to be slightly higher and continue towards our extended upside price target.

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