Commodity ETFs run into resistance

INTERMEDIATE TERM SIGNALS & MARKET ANALYSIS

CurrencyShares Euro Trust (FXE):
09/28/2012 Closing Price: 127.69
INTERMEDIATE TERM (I.T.) SIGNAL
:
Intermediate Term Trend is bullish.
Current Position: FLAT
Current Downside Targets = 124.26 – 123.17
Projected Weekly Range: 2.66
Trading 100,000 Shares
I.T. ANALYSIS:

  • FXE seeks to track the movement of the Euro currency.
  • Our FXE long position was stopped out last week at 127.72, a range violation occurring on Wednesday. We exited the final 50,000 shares with a profit of $274,500, bringing the total trade profit to $425,500 or .85% of our core position. Price action was bearish last week, confirmed by Friday’s close below the open, below the midrange and below the previous week’s close. The daily OVB down at the top of the rally, occurring on Sept. 17 has shown exceptionally strong resistance, resulting in our revised downside price objective of 124.26 – 123.17. This price range represents a zone where prices should find support and bounce up. All signs indicate trading should be lower this week; trading 127.45 will confirm a top and show a correction has begun. 

iShares MSCI Emerging Markets Index (EEM):
09/28/2012 Closing Price: 41.33
INTERMEDIATE TERM (I.T.) SIGNAL:

Intermediate Term Trend is bullish.
Current Position: FLAT
Current Upside Target = 48.19 – 49.23
Projected Weekly Range: 1.66
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 traded slightly lower last week, closing out near the midrange. Price action was bearish, making a lower low and lower high. Although emerging markets have seen moderate support in the previous few months, long-term prices are still well below 2011 highs, unlike the American S&P 500. For the second week now, EEM has failed to move higher, fumbling to find solid ground, only sporadically pushing higher. These volatile conditions have very high initial trade risks associated with them, ones we cannot justify taking. Our primary goal is to consistently generate profitable trades by managing risk exceptionally well. For these reasons, we maintain our flat position.

SPDR S&P 500 (SPY):
09/28/2012 Closing Price: 143.97
INTERMEDIATE TERM (I.T.) SIGNAL
:
Intermediate Term Trend is bullish.
Current Position: FLAT
Current Upside Targets: 154.21 – 159.39
Projected Weekly Range: 3.17
Trading 39,000 Shares
I.T. ANALYSIS:

  • SPY seeks to track the movement of the S&P 500 Index.
  • After achieving 100% of our SPY price prediction of 147.05, established in June 2012, prices have begun falling back down. Last week marked the official beginning of a correction, violating the high bar’s low following a sell pattern setup bar. Price action was bearish and confirmed by Friday’s close below the midrange, below the open and below the previous week’s close. We stated the change in the buying-selling pressure tradeoff last week as sellers began to overpower buyers, and to expect lower trading. Our long position was stopped out at 143.45, bringing the short-term, intra-rally trade to a close. Final trade profits were $71,799 or .14% generated in less than three weeks. The previous seven weeks of ETF analysis and trading has resulted in $1,496,166 (2.99%) in total profits, $623,062 of which is closed and lock-in.

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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