Category: Trades

Us markets, with the exception of small caps, look set to rally and finally bust through overhead resistance and rally to new highs.

I have been burnt a few times this year trading US stock market futures. There have been lots of head fakes. I still plan to trade these ascending triangles once they break through overhead resistance.

Crude oil is still range bound.

Buying around the $50 mark looks like a bargain.

Palladium completed a running wedge. This is very bullish. There was a time I though the top was in for palladium. It looks unstoppable.

First, I explained how to make a fortune with natural gas. That marked a bottom for natural gas.
At my last post on natural gas, Natural Gas Short Covering Rally, I explained why natural gas was forming an intermediate top.

In fact, natural gas topped the very next day. Now we have another opportunity. Open interest has declined to a multi-year low. Last week we saw a minor uptick in open interest. This tells me that natural gas is set to rally. Let us see how good my natural gas crystal ball is this time.

Bitcoin has completed a descending triangle.

There is a lot of air under the 7800 level. The Bitcoin chart is showing classic signs of a bear market. When you see your investment do a parabolic blow off top, you hit the sell button.

I took a small loss on the SP500 trade.

The small caps were not confirming a strong thrust higher in the US markets. My hesitation proved to be correct. Intermarket analysis saved me from taking a bigger loss.

Natural gas is experiencing a classic short covering rally. This is when the shorts take their profits. In a bear market, the open interest decreases and the price increases.

The bottom in natural gas in the beginning of August, coincides with a top in open interest. This is an indication that natural gas maybe experiencing an intermediate top. With a 25% increase in price, it needs a correction. I still have a long position in natural gas, but I reduced my  position and took some profits.

All the general markets with the exception of the small caps looks ready to challenge their all time highs. I took a small long position in the SP500.

I entered the SP500 at 2970 with a stop at 2939 and a target of 3072. I also opened up a position in Vanguard 500 Index Fund in the performance tab.
My hesitation is the small caps which have a neutral/bearish look to them.

Crude oil turned down Friday keeping it bound by its descending triangle.

This indicates to me that it wants to challenge its 50$ support. With horizontal support levels, I have the “three times and your out” outlook. It tested the 50$ price in June and again in August. The third try will be reveling. Fundamentally, I think crude is a buy at 50$ and a sell at 70$, but I will let the market paint the picture for me.

The British Pound looks like it wants to make a double bottom.

A break of the 1.2 support will most likely send to its 1985 low where it almost traded at par with the USD.

The USD is slowly grinding up.

A clean break above the 103 level will be extremely bullish. No doubt the political class will try to “talk it down” if it breaks this level. Mr. Mercantilism will give us more tweets like this as the dollar rises:

Crude looks like it wants to test the $50 support level.

It has been forming a descending triangle since it topped in April. A look at the front month contract shows a daily close below $50 and crude will test $40.

$40 has been good support for crude. Depending on price action around the $50 level, I might consider going long. I will definitely be a buyer at $40.

I am closing out my gold position Sunday night.

Every investment podcast I listen to is talking about how gold is a good investment. The COT is indicating we are approaching an extreme in market sentiment. This is about the time a correction comes. A pull back to the 1380 area looks likely.

Palladium is possibly forming a double top. Depending on how the second top drags out, I will most likely go short with a break below the 1300 level.