Metals, grains ETFs face possible downside corrections

INTERMEDIATE TERM SIGNALS & MARKET ANALYSIS

CurrencyShares Euro Trust (FXE):
10/05/2012 Closing Price: 129.45
INTERMEDIATE TERM (I.T.) SIGNAL
:
Intermediate Term Trend is bullish.
Current Position: FLAT
Upcoming Trade Entry: BUY @ 128.87.
STOP @ 127.45
Current Downside Targets = 124.26 – 123.17
Projected Weekly Range: 1.94
Trading 50,000 Shares

I.T. ANALYSIS:

  • FXE seeks to track the movement of the Euro currency.
  • After stopping out our long position the previous week, FXE experienced strong support last week. Price action was bullish and confirmed by Friday’s strong close above the midrange, above the open and significantly above the previous week’s close. FXE never traded 127.45 and thus avoided the formation of an I.T. correction. Strong buying and failure to trade lower last week has resulted in the upcoming trade entry to buy 50,000 shares at 128.87, if FXE provides this opportunity. We believe the euro will climb higher as the ECB continues to provide financial stimulus to struggling economies. A second week of higher trading will result in the revision of our current targets to the upside.

iShares MSCI Emerging Markets Index (EEM):
10/05/2012 Closing Price: 41.95
INTERMEDIATE TERM (I.T.) SIGNAL:

Intermediate Term Trend is bullish.
Current Position: FLAT
Current Upside Target = 48.19 – 49.23
Projected Weekly Range: 1.04
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.
  • After two weeks of lower trading, EEM found moderate support last week, keeping prices above 41.30. The higher high and higher low formed bullish price action and Friday’s close slightly above the midrange, above the open and above the previous close confirmed the price action. The last three weeks have traded within the single weekly range of four weeks ago, neither making new highs nor violating its low. This sideways trending pattern can be seen in many other markets, indicating a certain level of investor uncertainty. Current indicators point to higher trading this week, yet strong resistance and heavy selling pressure should keep EEM below 42.83 for the near future.

SPDR S&P 500 (SPY):
10/05/2012 Closing Price: 146.14
INTERMEDIATE TERM (I.T.) SIGNAL
:
Intermediate Term Trend is bullish.
Current Position: FLAT
Current Upside Targets: 154.21 – 159.39
Projected Weekly Range: 2.73
Trading 39,000 Shares

I.T. ANALYSIS:

  • SPY seeks to track the movement of the S&P 500 Index.
  • The bearish correction confirmed the previous week was tested last week with bullish price action and a strong weekly close. After two weeks of strong selling pressure, SPY rallied back to set up the continuation of the summer rally. Although SPY has officially confirmed a correction, such a short one is often considered a false top when price quickly rally back up. If this week trades higher and closes strong, we will consider the previous two weeks only a sell-off. Prices should remain relatively steady for the coming month; expect slightly higher prices until the election. Our current upside targets, though aggressive, could be achieved by the end of this year, especially if Romney is elected President. Over the last eight weeks, ETF analysis and trading has resulted in $1,594,589 (3.19%) in total profits, $671,437 of which is closed and locked-in.

Parrish-Hicks YTD Performance Report

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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