Commodity ETFs diverge; grains and gold turn bullish

INTERMEDIATE TERM SIGNALS & MARKET ANALYSIS

CurrencyShares Euro Trust (FXE):
11/09/2012 Closing Price: 126.23
INTERMEDIATE TERM (I.T.) SIGNAL
:
Intermediate Term Trend is bullish.
Current Position: FLAT
Current Downside Targets = 124.26 – 123.54
Projected Weekly Range: 1.54
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.
  • FXE failed to rally back to our trade entry point of 128.25, preventing our second chance opportunity to enter a short position. Trading followed through as expected, making new weekly lows on the current correction, which officially began last week. Although the reduced trading range did form a VRCB, this was due in part to both significantly below average volume and support from buying pressure. Friday close was in the bottom ten percent of the weekly trading range, resulting in a 78% chance of trading lower this week. Expect the correction to continue lower in the coming weeks, until support within the 124.26 to 123.54 price range comes into play.

IShares MSCI Emerging Markets Index (EEM):
11/09/2012 Closing Price: 41.00
INTERMEDIATE TERM (I.T.) SIGNAL:

Intermediate Term Trend is bullish.
Current Position: FLAT
Current Upside Target = 48.19 – 49.23
Projected Weekly Range: 1.22
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.
  • EEM has totally failed to establish a clear direction over the last two months. Currently trading within the strong bullish weekly range of Sept. 14, prices seem to have found support above 40.50 and resistance below 42.50. Price action last week formed an OVB, or a higher high and a lower low. When OVBs form, the weekly close indicates the trading direction for the following week. Last week’s close in the bottom 25% of the weekly range indicates there is an 82% chance of trading 40.86 before 42.27. We believe the sideways trading that has plagued emerging markets will largely continue for the remainder of 2012. For this reason, we maintain our flat position.

SPDR S&P 500 (SPY):
11/09/2012 Closing Price: 138.16
INTERMEDIATE TERM (I.T.) SIGNAL
:
Intermediate Term Trend is bullish.
Current Position: FLAT
Current Downside Target: 133.83
Projected Weekly Range: 4.10
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.
  • Investor sentiment was very clear in regards to President Obama’s reelection; SPY fell from 142.96 on Monday to 139.72 on Tuesday, and closed out the week at 138.16 on Friday. Last Wednesday experienced the largest single day drop in prices in nearly a year. Price action was bearish confirmed and should continue lower this week. Our downside price target of 133.83 represents a support level where SPY should bounce back and begin to form a rally. We believe the current correction will fail to retest the previous bottom of 127.14 formed in June. The divergence between market prices and relative closing strength was a key indicator for the impending current correction. Over the last sixteen 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-Hick 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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