Daily Trading Journal 7/28/14

The major indices saw more selling today at the open only to rebound intraday and close near the flat-line for the day. The Nasdaq 100 continues to hold above the 10 day SMA, while the S&P 500 and Dow hold on to their 30 day SMAs. The Russell 2000 held the bottom of its range at 112.25 intraday, but continues to fail to push above into the gap left above 114. The falling 10 day SMA continues to act as resistance and we may see new lows if we can’t reclaim the upper part of this range soon. Today was probably a day to cover some cute shorts as the major indices came into support and take down long exposure as we head into a likely volatile few days of economic data. Additionally, market breadth continues to be a concern, with new highs being accompanied by waning momentum and less individual stocks hitting new highs. Ultimately, price pays but given the lack of short term trade setups, it probably pays to be a little more tactical as we wait for the markets next directional move. Also, if you look at the spot VIX, we continue to build somewhat of a rounding base and holding above the 10/30 day SMAs suggesting that higher prices are likely around coming if we break above resistance at 13.50. Bonds (TLT) printed a long legged doji signaling some indecision, but still closing near the highs above rising short and long term moving averages. Intermediate trend continues to be higher until any of those conditions change. Global equity markets were mixed on the day with China (FXI) leading to the upside up 2.14% and Vietnam (VNM) leading the losers down 1.75% on the day.

Sectors leading to the upside included utilities (XLU), gaming stocks (BJK), coal stocks (KOL), base metals (DBB), social media stocks (SOCL), gold miners (GDX), reits (IYR), and steel stocks (SLX).

Laggards on the day included home-builders (XHB), transports (IYT), regional banks (KRE), large cap biotech (IBB), oil services and energy (OIH, PXJ, XLE), telecom (XTL), staples (XLP), and industrials (XLI).

Gold continues to hold support at 1275-1280 but remains choppy short term, no clear direction. 150 day SMA at 1285 as well. Resistance 1307.

Silver continues to hold support at 20.40 but looks heavy below falling/flattening 10/30 day SMAs. No clear direction at the moment but support 20.40 resistance 20.80.

Copper continues to build above a rising 30 day SMA. Resistance 3.29.

Crude continues to hold above 100.80-101. Bias remains higher above that level but it has not acted well the past few days, we’ll see.

Gasoline continues to build a base above 2.84. Resistance at its falling 10 day SMA. Break below last week’s lows will see a gap fill down to 2.79.

Natural gas reversed higher intraday but rejected at its falling 10 day SMA. Bias remains lower for now.

Wheat continues to build above 520.25, last week’s low but a falling 30 day SMA will likely provide momentum to the downside. See how it handles a test of that in the coming days.

Soybean oil moving higher after last week’s intraday reversal on Friday. Back above the 10 day SMA and showing positive momentum divergences. Trade it against the 10 day SMA which should now act as support. 30 day SMA is falling and will act as resistance.

Corn trying to break above the 10 day SMA on the back of a small momentum divergence at last week’s move to new lows. If long trade it against 364.25, falling 30 day SMA will be resistance.

Heating oil pulling back into a rising 10 day SMA. Targets remains 2.93 and 3.01 as long as it holds the 10 day.

Palladium continues higher above its moving averages. Bull flagging near the highs, bias remains higher. Support 863, 840. Resistance at intraday highs of 890.

Platinum back above 1490, barely, after testing support at 1467 last week. I think if you can handle some short term volatility you can trade it on a weekly basis against 1448, the 30 week SMA. Resistance remains ~1520. The longer term base looks good but short term not really a clear direction.

Cocoa flagging near the highs. Rising 10/30 day SMA as support as well as 3148.

Sugar continues to base above 16.90. I think it heads higher but why guess, wait for a range break. Intermediate term range remains 16.50-18.25.

Coffee approaching resistance at 183. Rising 10/30 day SMAs should provide momentum higher. Above 183 will target 196 then the old highs.

Lumber breaking last week’s low. Support all the way down at its 295 low.

Soybean meal back above its 10 day SMA after building a base and positive momentum divergence above 340. If you are long trade it against that level and see how it handles a test of the falling 30 day SMA in the next few days.

Oats breaking their intermediate down trend line and back above rising 10/30 day SMAs. Target remains 377 which is a test of its flat 150 day SMA which has been significant support/resistance in the past.

Soybeans showing similar action as soybean meal except above its 1055 low. Trade it against that and see how it handles a test of the 30 day SMA. If you were looking for an area to bounce, this long term support level is key.

Cotton continues to grind lower.

Dollar index flagging above the 10 day SMA. Resistance 81.25.

AUD/USD continues to chop around short term but I still think the bias is higher in the intermediate term as long as we hold above .9330. Target .97.

GBP/USD pulling back to support at 1.6970. Looking for a test of trend line support at 1.6925.

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