Commodity ETFs see weakness in underlying products

INTERMEDIATE TERM SIGNALS & MARKET ANALYSIS

CurrencyShares Euro Trust (FXE):
11/16/2012 Closing Price: 126.49
INTERMEDIATE TERM (I.T.) SIGNAL
:
Intermediate Term Trend is bullish.
Current Position: FLAT
Current Downside Targets = 124.26 – 123.54
Projected Weekly Range: 1.38
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.
  • The bearish price action of the previous week resulted in a lower high and lower low last week. Trading volume was nearly identical yet still well below average. This part of the reason why a second consecutive VRCB formed, an equalization of buyers and sellers also contributed. Price action was slightly bearish with Friday closing slightly below the weekly midrange. The combination of two VRCBs in a row normally indicates a reversal in directional price movement and the formation of a support zone. We believe the euro has further to fall before finding a true support zone and forming a rally. The I.T. trend suggests that trading should be flat to slightly lower this week.

IShares MSCI Emerging Markets Index (EEM):
11/16/2012 Closing Price: 40.41
INTERMEDIATE TERM (I.T.) SIGNAL:

Intermediate Term Trend is bullish.
Current Position: FLAT
Current Upside Target = 48.19 – 49.23
Projected Weekly Range: 1.27
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.
  • Price action finally obtained last week, trading lower following the bearish OVB of the previous week. For eight consecutive weeks, EEM reversed the weekly close, showing instability and unpredictable trading patterns. Last week marks the first time where trading clearly followed the direction of the previous week’s close. This could mean directional trading will begin to resume. Price action was bearish and confirmed by Friday closing below the open, below the midrange and below the previous open. Volatility and unreliable I.T. trading continues to make placing trades very risky; we therefore maintain our flat position.

SPDR S&P 500 (SPY):
11/16/2012 Closing Price: 136.37
INTERMEDIATE TERM (I.T.) SIGNAL
:
Intermediate Term Trend is bullish.
Current Position: FLAT
Current Downside Target: 133.83
Projected Weekly Range: 4.52
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.
  • SPY continued to fall on bearish investor sentiment last week, plummeting to new sixteen week lows. Friday’s close marks just the third time this year a weekly bar closed below the 200-day moving average. Currently near our downside price target of 133.83, SPY should begin to find support and potentially begin a rally. Many different indicators have accumulated around this price point, a positive sign of things to come. Daily price action formed an OVB on Friday, closing in the upper quartile of the daily range, bouncing off the weekly low of 134.70. I.T. term price action was bearish though, and confirmed by Friday’s close. Although trading should be slightly lower this week, we believe falling prices should begin to find support in the coming weeks. Over the last seventeen 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

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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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