Commodity ETFs uncertain ahead of presidential election

INTERMEDIATE TERM SIGNALS & MARKET ANALYSIS

ETF ANALYSIS FOR:

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

Core Position: $50,000,000
Current Profits:
$1,647,049 (3.29%)
Largest Drawdown:
$160,590 - (0.32%)
Return-on-Risk:
  10.26:1
(UNLEVERAGED and FULL SHARE VALUE)

KEY TERMS

OVB:  Outside Vertical Bar
VRCB: Volatility Reduced Compression Bar

PowerShares DB Agriculture (DBA):
10/19/2012 Closing Price: 29.27
INTERMEDIATE TERM (I.T.) SIGNAL
:
Intermediate Term Trend is bullish.
Current Position: FLAT
Current Downside Targets = 28.59 – 28.34
Projected Weekly Range: .64
Trading 185,000 Shares
I.T. ANALYSIS:

  • DBA trade losses since 07/25/2012 equal $99,000 or 0.20%.
  • 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.
  • Currently in a full correction, DBA found strong support within our downside price range of 28.59 – 28.34. After making new monthly lows on Monday, commodities rallied strong, violating the previous week’s high. The higher-high and lower-low formed a weekly OVB, a strong indicator of volatility change. This bar type occurs when selling pressure get overpowered by new buying pressure. Price action was bullish, closing out the week above the midrange and above the previous close. There is a 78% chance of trading 29.47 before seeing 28.57.

IPath DJ-UBS Grains (JJG):
10/19/2012 Closing Price: 58.73
INTERMEDIATE TERM (I.T.) SIGNAL
:
Intermediate Term Trend is bullish.
Current Position: FLAT
Current Downside Targets = 56.94 – 55.80
Projected Weekly Range: 2.46
Trading 87,000 Shares
I.T. ANALYSIS:

  • JJG total trade profits since 07/25/2012 equal $38,280 or 0.08%.
  • JJG is concentrated in agricultural grain futures, holding 46% soybeans, 30% wheat and 24% corn.
  • As expected, price action followed through last week with slightly lower trading yet largely within the previous weeks range. Last week’s low fell within our downside target zone, where support rallied the grains back to the previous week’s midrange. Sideways movement occurs when the market is unsure about current price levels, usually correcting or rallying significantly, evidenced by the stagnant prices from March to June and then followed by the 40% summer rally. Price action was bearish divergent with lower highs and lows yet a close above the midrange and above the previous two weekly closes. Trading should be slightly higher this week, yet continue to remain nondirectional, trending sideways for a while.

SPDR Gold Shares (GLD):
10/19/2012 Closing Price: 166.97
INTERMEDIATE TERM (I.T.) SIGNAL:

Intermediate Term Trend is bullish.
Current Position: FLAT
Current Downside Target = 162.41
Projected Weekly Range: 2.89
Trading 35,000 Shares
I.T. ANALYSIS:

  • GLD total trade profits since 07/25/2012 equal $413,695 or 0.83%.
  • GLD’s single holding is gold bullion.
  • GLD traded as predicted last week, lower without finding any form of support. Volatility and buying-selling pressure indicators have fully reversed, beginning with the VRCB top from three weeks ago. The formation of dual weekly Volatility Reduced Compression Bars at the top of a fast rally is an exceptionally strong indicator of a correction to follow. Last week guaranteed this correction by trading below 169.81 and confirmed it by closing even lower. Price action was decisively bearish; trading should continue lower this week. Our previous GLD trade was exited at 170.05, over $3 higher than Friday’s close, taking home $64,680 more than if we remained long. Our trading philosophy believes in high-quality, risk-adjusted trade entries with intelligent trailing stops, locking-in profits at optimal prices.

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