Commodity ETFs uncertain ahead of presidential election

INTERMEDIATE TERM SIGNALS & MARKET ANALYSIS

IPath DJ-UBS Copper (JJC):
10/19/2012 Closing Price: 45.98
INTERMEDIATE TERM (I.T.) SIGNAL:

Intermediate Term Trend is bullish.
Current Position: FLAT
Current Downside Target = 44.51
Projected Weekly Range: 1.46
Trading 128,000 Shares
I.T. ANALYSIS:

  • JJC total trade profits since 07/25/2012 equal $379,840 or 0.76%.
  • JJC is an ETN that holds only a single commodity, the Copper High Grade futures contract.
  • Price action predicted last week’s trading and followed through as expected. JJC closed lower than the previous close and below the midrange, forming bearish price action. Currently approaching our downside price target, expect JJC to trade lower this coming week, finding support above $44. The correction made new monthly lows last week, nearing our monthly price objective of 44.93. Any trading below this point, during the month of October, is exceptional and abnormal. Friday’s daily gap lower open and lower close is an intellectual indicator of the bearish sentiment that should continue this Monday morning.

United States Oil (USO):
10/19/2012 Closing Price: 33.34
INTERMEDIATE TERM (I.T.) SIGNAL
:
Intermediate Term Trend is bearish.
Current Position: FLAT
Current Upside Target = 35.85 – 37.87*Extended Upside Objective
Projected Weekly Range: 1.65
Trading 100,000 Shares
I.T. ANALYSIS:

  • USO total trade losses since 07/25/2012 equal $160,590 or 0.32%.
  • USO seeks to replicate the spot price of WTI light, sweet crude oil and primarily holds futures contracts.
  • For the fourth week, USO has failed to establish a clear direction, trading entirely within the previous week’s range. WTI has found support above $88 and strong resistance below $94 since mid-September. Price action was slightly bearish with a lower weekly open, lower close and close below the midrange. Stagnant movement has plagued many of the markets, especially commodities, as investors remain hesitant to make any major bets before the presidential election. For this reason, we maintain our flat position.

United States Natural Gas (UNG):
10/19/2012 Closing Price: 23.09
INTERMEDIATE TERM (I.T.) SIGNAL
:
Intermediate Term Trend is bullish.
Current Position: LONG @ 19.83 on 09/25/12. STOP @ 21.46
Upcoming Cover:
COVER 22,500 (15%) @ 23.57 
Current Upside Target = 23.57 – 24.11
Projected Weekly Range: 1.52
Trading 150,000 Shares; COVERED 22,500 (15%) @ 21.98
I.T. ANALYSIS:

  • UNG total trade profits since 07/25/2012 equal $553,625 or 1.11%.
  • Initial trade risk was $142,500 or .29%. Current trade risk is $0. Current trade profits are $464,025 or .93%.
  • UNG seeks to replicate the price movement of NYMEX Natural Gas by holding futures contracts.
  • Price action was bullish last week, making new monthly highs by one cent and closing above the midrange. We would have liked to see our next profit taking price traded last week; if this week doesn’t trade 23.57 we will reevaluate the trade. In four weeks, our current long position in UNG has generated $464,025 in total profits and locking-in over $250,000. Our second profit-taking price of 23.57 was only 0.19 away from being fulfilled; look to cover these 22,500 shares this week. The current trade entry was based on a very profitable I.T. pattern that occurs less than twice a year: buying the first correction following a bullish trend reversal.

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