Commodity ETFs move lower on confluence of technical indicators

INTERMEDIATE TERM SIGNALS & MARKET ANALYSIS

IPath DJ-UBS Copper (JJC):
10/26/2012 Closing Price: 44.93
INTERMEDIATE TERM (I.T.) SIGNAL:

Intermediate Term Trend is bullish.
Current Position: FLAT
Current Downside Target = 44.51
Projected Weekly Range: 1.44
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.
  • JJC closed exactly on our monthly price prediction of 44.93 last Friday. This price represents the downside range movement we thought JJC would experience in October. Our current downside target of 44.51 is yet to be achieved, but should be realized this coming week. Price action certainly followed through last week, trading significantly lower as expected. Price action was bearish and confirmed by Friday’s close in the bottom 10% of the weekly range. Although directional movement was visible to the downside, strong buying pressure resulted in formation of a VRCB. Trading volume was above average which indicates this strong support could potentially follow though this coming week.

United States Oil (USO):
10/26/2012 Closing Price: 31.79
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.
  • After four weeks of stagnant trading, USO finally made a move in a clear direction. Breaking through all levels of support, Tuesday gap lower-opened following Monday’s bearish trading. The remainder of the week stayed relatively steady, closing out the week at 31.79. The previous week’s price action and very bearish close indicated last week’s trading should be to the downside. Bearish price action says trading should be lower this week, yet the short-term appears to have found support above $31. We are currently flat and are evaluating optimal trade entries.

United States Natural Gas (UNG):
10/26/2012 Closing Price: 21.89
INTERMEDIATE TERM (I.T.) SIGNAL
:
Intermediate Term Trend is bullish.
Current Position: LONG @ 19.83 on 09/25/12. STOP @ 21.52
Upcoming Cover: COVER 22,500 (15%) @ 23.57 

Current Upside Target = 23.57 – 24.11
Projected Weekly Range: 1.56
Trading 150,000 Shares; COVERED 22,500 (15%) @ 21.98
I.T. ANALYSIS:

  • UNG total trade profits since 07/25/2012 equal $400,625 or 0.80%.
  • Initial trade risk was $142,500 or .29%. Current trade risk is $0. Current trade profits are $311,025 or .62%.
  • UNG seeks to replicate the price movement of NYMEX Natural Gas by holding futures contracts.
  • For the third week, UNG has failed to trade 23.57, our next profit-taking price. Strong resistance and heavy selling pressure has kept prices down, trading below the previous week’s low. This has resulted in the setup for a correction to be confirmed this week, assuming 21.73 trades. Price action was bearish and confirmed by Friday close below the midrange, below the previous close and below the open. Our current trade exit price of 21.52 is only 37 cents away from Friday’s close. At this price, total trade profits will be $263,850 or 0.53%. 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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