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Rising Channels, New ES Models, Chart Pattern Failures, The Beta Program
The chart pattern(s) everyone is watching
May 28th 2012
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| Hello:
In this Memorial Day holiday weekend edition of our newsletter, we're going to look at a few items. This is a longer letter than usual - normally we only cover one market/chart but this weekend we'll cover a few items. Additionally, we are going to include some information for our beta program users at the end (this way we don't inundate your inbox with multiple emails).
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| Japanese Yen: A Rising Channel into resistance
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The Japanese Yen has created a rising channel on the daily charts into an area of prior resistance. A break of this channel to the downside could lead to a full retest down. Frankly, though, I'd be happy with a break of a couple of points. A close below 1.2450 or so (basis June CME Contract) will constitute a break of the channel to the downside. If price gets back to the upper channel line, it would also be a good shorting opportunity.
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| Wheat: A fabulous breakout that may have failed.
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Last week we profiled the wheat market and called the breakout "fabulous". Of course, since breakouts have a failure rate of around 70% (primarily because price tends to morph into even larger breakout/consolidation patterns), the deep retracement in this market has caused us to question whether the breakout may have failed. To keep this letter short, we have posted our latest analysis of this market to a blog - click here to view it.
Whenever we have to show too many charts, we will use a blog and just place the link in this newsletter. This way, you don't have to scroll through a long letter to get to your item(s) of interest.
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| Broader Market Notes
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The broader market has flushed into a support area and seems to be creating a sideways line / consolidation line now. We would not be surprised to see a bit more upside next week going into the month end. Below is the Russell 2000 e-mini futures chart. You can see that price is caught between support and resistance. This should cause some interesting whipsaws next week.
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| The Trade(s)
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Buy July Wheat on flushes. Your absolute disaster stop should be 660 or below.
Short the Yapanese Yen (CME June Contract) on a decisive move or close below 1.2450.
On the stock indexes, look for reversals at the upper and lower end of the range. If you like divergences, they should serve you well next week.
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| Important Risk Disclosures and Legal Disclaimers - This stuff is important!
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First you should realize that PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS! The risk of loss in trading commodities can be substantial. You should, therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage that is often obtainable in commodity trading can work against you as well as for you. The use of leverage can lead to large losses as well as gains.
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| BETA Program News and Information
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Last week, we sent out our first major call for beta testers for the website and real-time chat room. This call was well received and we show that many users signed up. But, we have not seen many of you in the room itself. Still, those of you that showed up provided valuable feedback and we really appreciate it.
If you need to know more about the beta program, a link to the letter that went out to the first group of beta users can be found here:1st Beta Newsletter. This letter contains some of the basics that you need to know in order to access the real-time chat room and video including important information about your user ids and passwords.
If you have not signed up for the beta program and would like to do so, simply go to our home page at http://www.structuredmarketseducation.com
We would also appreciate it if you could encourage your friends and co-workers to sign up for either our newsletter and/or the beta program as well. As you know, they're both free at this time. The more traders that sign up, the more feedback we get and, therefore, the better we can make this newsletter and related products.
If you are new to our newsletter or the beta program you can find past versions of our newsletter here: Newsletter Archive
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| New ES Models
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Finally, here is a link that you may be interested in - some basic models that we recently published: Recently Published Market Tendencies and Models. These models address some of the recent market action including 6 consecutive down closes (a relatively rare occurrence) along with a 2 day pullback model in the ES. We will add more documentation and feedback over time to these new items but we wanted to let you know that they are available now.
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| Quick Links...
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| More Markets
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If you'd like coverage of more FUTURES markets, please join our beta program. Join us at http://www.structuredmarketseducation.com. We cover all the major US futures markets including the Metals, Grains, Softs, Indices, Currencies, Meats and Interest Rates. We occasionally cover some foreign markets such as German Dax and Bunds.
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| Contact Information
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email: contact@structuredmarketseducation.com
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