Daily Trading Journal 8/4/14

The major indices saw some upside follow through today after Friday’s close suggested some selling after we extended from the 10 day SMA to the downside and were oversold on intraday time frames. The VIX saw downside follow through after Friday’s topping tail but held the gap and remains above rising 10/30 day SMAs. Key support there sits around 13.50 for upside to continue. Friday’s low and today’s bounce in the major indices gives a pivot low to trade against on the downside, but I think action will likely remain choppy in the near term as the 10/30 day SMAs are now falling and should act as resistance. In order to see a real bottom put in I think we need to see larger range expansion and a final uptick in volatility, but who knows we’ll just have to wait and see. Bonds (TLT) continue to trade between the 10 and 30 day SMA. Not sure which way it’ll break in the short term but I’d say in the intermediate term the bias remains higher. Support 113.50, 112.70 and a rising 150 day near 110. Global equity markets were largely higher on the day with Indonesia (IDX) leading up nearly 3% and the Netherlands (EWN) leading lower down .6% on the day.

Sectors leading on the day included coal stocks (KOL), energy stocks (XLE), social media stocks (SOCL), oil services (OIH, PXJ), basic materials (XLB), retail (XRT), steel stocks (SLX), consumer discretionary (XLY), and small caps (IWM).

Sectors lagging on the day included gold miners (GDX), utilities (XLU), regional banks (KRE), aerospace & defense stocks (PPA), telecom services (VOX), solar stocks (TAN) and consumer staples (XLP).

Gold and silver continue to roll over through support as the 10 day SMA acts as immediate resistance.

Copper continues to build a range of 3.16-3.29. Looks like bias will remain higher in the intermediate term as it looks to break a longer term trend line. Below 3.16, it won’t look that great.

Crude showing a small positive momentum divergence but remains below falling 10/30 day SMAs and appears to be bear flagging below 98.75 support. Below last week’s low 95 will be next support.

Gasoline filling the gap lower to 2.79 and going for more. Support near 2.70 but don’t try to pick a bottom as the 10/30 day SMAs continue to act as resistance. Small indecision candle today, well off highs and oversold, but need to see more before it becomes an attractive long.

Natural gas range 3.72-3.88. Could be trying to base as it is above its 10 day SMA, but see how it reacts to a falling 30 day SMA. I don’t know which way it’ll break so play a break if you’re interested.

Wheat continues to look like it’s putting in a short term bottom. Back above its 10 day SMA after new marginal lows last week and close to closing above 550 resistance. Above 550 you could see a squeeze. If we get a close above 550 I think the bias is higher toward 620. Until then, trade it against last week’s low of 518.50.

Soybean oil trying to round out a bottom on the back of a positive momentum divergence. See how it reacts to the 30 day SMA. I don’t see enough to think the bottom is in just yet.

Same deal in corn. Not interesting yet. Falling 30 day SMA as resistance.

Heating oil failing to hold its bull flag from last week. Bias in lower as the 30 day SMA is acting as resistance. Was wrong here, oh well.

Palladium closing below 863 support. Next level at 840, which has to hold IMO. Back below its 10/30 day SMAs.

Platinum trying to put in a bottom above 1460. Still think a test of the 150 day at 1450 is coming. Longer term I think it heads higher, just not right now.

Cocoa flagging above its 10 day SMA. Support 3140. Resistance 3220.

Sugar testing its 30 day SMA and failing. Bias remains lower toward the YTD lows of 14.70 after it broke its 16.50-18.25 range to the downside.

Coffee flagging above the 10 day after getting ahead of itself last week. Needs to flag below 197 before heading higher. Rising 10/30/150 day SMAs should act as support. 183 is a key level for the bias to remain to the upside.

Lumber catching a bid and putting in a positive momentum divergence above 320 Support. Needs to break 330 for momentum to push towards 339 for a test of the 150 day SMA.

Soybeans and soybean meal trying to put in a bottom but don’t look ready yet. Need more basing.

Oats look fantastic as they base above trend line support and the lows near 319. Price back above flattening 10/30 day SMAs and RSI showing a positive momentum divergence. I think price is setting up a rounding bottom for a test of the 150 day SMA at 382. Good risk/reward with a stop at 319.

Cotton bouncing, but remains below falling 10/30 day SMAs.

AUD/USD bear flagging below key resistance at .9330. Look for a test of the bottom of its old range and 150 day SMA at .92.

GBP/USD approaching its 150 day near 1.6740 which corresponds with the prior breakout area.

Dollar index continues to flag above the 10 day. Resistance 81.40. Needs to flag in this range for a while, don’t see it breaking this resistance level in one fell swoop.

USD/JPY flagging above its 10/150 day SMAs. Support 102.30. Resistance 102.80 and 104.

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