Commodity ETFs fall as bearish signals strengthen

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.
• Trading was as expected last week and continued the correction. Price action has been bearish confirmed for the last four weeks, a very strong sign of the exceptionally bearish sentiment. Expect lower trading this coming week as price action continues to be a reliable and successful indicator. JJC has retraced back to July price levels, giving back all profits to anyone who remained long. Our trading strategy prioritizes risk minimization then attempts to lock-in a high percentage of profits. While long only investors are currently flat since July, our trading strategies have capitalized on the JJC rally and exited before the correction. 

United States Oil (USO):
11/02/2012 Closing Price: 31.35
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: 1.43
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.
• Fully retracing back to midsummer lows, USO has nearly completed its correction cycle. We believe prices will continue to find strong support above 30 and shouldn’t trade much lower. Like many other markets, last week’s restricted trading range formed a VRCB. Although this can be attributed to reduced volume on only three trading days, VRCBs naturally form at the top of rallies and the bottom of corrections. This could be a sign of intrinsic support coming into the market. We strongly believe the current correction will fail to violate the previous bottom at 29.02.

United States Natural Gas (UNG):
11/02/2012 Closing Price: 21.89
INTERMEDIATE TERM (I.T.) SIGNAL:
Intermediate Term Trend is bullish.
Current Position: FLAT
Current Downside Target = 18.88
Projected Weekly Range: 1.39
Trading 150,000 Shares

I.T. ANALYSIS:

• UNG total trade profits since 07/25/2012 equal $353,450 or 0.71%.
• UNG seeks to replicate the price movement of NYMEX Natural Gas by holding futures contracts.
• After attempting to find support for our long trade, UNG stopped out the remaining 85% of our position at 21.52, profiting $263,850 or 0.53%. The position was generated off a very profitable trade strategy to buy the first correction following a bullish trend reversal. Last week formed a top by trading 21.73 and further confirmed it by closing below this price. UNG, officially in a correction, is expected to trade down to 18.88 but certainly not below 17.69. The bullish I.T. trend has already made its yearly trend reversal and we do not expect another one this year. If price action obtains this week, trading will continue lower, closing below 20.81.

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