Commodity ETFs fall as bearish signals strengthen

INTERMEDIATE TERM SIGNALS & MARKET ANALYSIS

CurrencyShares Euro Trust (FXE):
11/02/2012 Closing Price: 127.42
INTERMEDIATE TERM (I.T.) SIGNAL
:
Intermediate Term Trend is bullish.
Current Position: FLAT
Working Order: SELL @ 128.25; STOP @ 130.52

Break-Even Price: 125.98; COVER 7,500 (15%)
Current Downside Targets = 124.26 – 123.54
Projected Weekly Range: 1.83
Trading 50,000 Shares

I.T. ANALYSIS:

  • FXE total trade profits since 07/25/2012 equal $425,500 or 0.85%.
  • FXE seeks to track the movement of the Euro currency.
  • Although FXE failed to rally higher like we had expected, our long position still managed to make a small profit. This is largely because of our accurate anticipation of the coming week’s trading action, and our active stop prices that minimize losses. The final 80% of our trade was exited on Monday’s gap higher open, amounting to a total of $19,000 or 0.04% in profits. Had we remained long, current trade losses would amount to $43,700. Price action was bearish and confirmed by Friday’s close in the lower 5% of the weekly range, lower than the previous seven weekly closes. Our current working order to sell 50,000 shares at 128.25 would provide a second chance opportunity to enter the market after strong bearish sell signals. Expect trading to continue lower this week, approaching our new downside price targets.

IShares MSCI Emerging Markets Index (EEM):
11/02/2012 Closing Price: 41.60
INTERMEDIATE TERM (I.T.) SIGNAL:

Intermediate Term Trend is bullish.
Current Position: FLAT
Current Upside Target = 48.19 – 49.23
Projected Weekly Range: 1.14
Trading 135,000 Shares

I.T. ANALYSIS:

  • EEM total trade losses since 07/25/2012 equal $7,560 or 0.02%.
  • EEM seeks to replicate the performance of the MSCI Emerging Markets Index by investing in the underlying international securities.
  • Following the current pattern of inverse price action, EEM traded sideways and slightly higher. EEM traded equally as high as the previous week, yet managed to keep prices above the previous low. Closing slightly above the midrange indicates bulls supported the market more than bears could drag it down. EEM is still trading within the weekly range of the exceptionally strong bar ending September 14. Sideways movement has remained choppy and volatile, failing to establish any sense of direction. We believe this will largely continue throughout the rest of 2012. Due to the current level of uncertainty within emerging markets, we remain flat.

SPDR S&P 500 (SPY):
11/02/2012 Closing Price: 141.56
INTERMEDIATE TERM (I.T.) SIGNAL
:
Intermediate Term Trend is bullish.
Current Position: FLAT
Current Upside Targets: 154.21
Projected Weekly Range: 3.36
Trading 39,000 Shares

I.T. ANALYSIS:

  • SPY total trade profits since 07/25/2012 equal $71,799 or 0.14%.
  • SPY seeks to track the movement of the S&P 500 Index.
  • Price action failed to follow through as expected last week. The previous week’s strong sell off was not continued last week; SPY found support on Wednesday and Thursday, only to come falling back down on Friday. The daily OVB formed on Friday results in a 78% chance of trading lower this Monday, which should follow through the rest of the week. There currently exists a bullish divergence between weekly closing strength and market prices. Although SPY is currently trading higher than in April, the strength of the closes has been weaker, indicating systematic weakness. Price action was bullish divergent, making a weekly higher high and higher low, yet closing below the midrange and below the open. The weekly close is often considered and intellectual indicator of investor sentiment for the next week’s trading. Over the last twelve weeks, ETF analysis and trading has resulted in $1,433,614 (2.87%) in total profits, all of which are closed and locked-in.

Parrish-Hicks 2012 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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