| S&P: At Support again...
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Last week we mentioned that we were cautiously bullish and that traders should wait for any 2 day pullback before buying. Obviously we never expected our two day pullback to take us all the way to intermediate support.
The upside move overcame resistance two weeks ago - that resistance level became support and last weeks sell off hit that support level. Technically, we should be buyers in this support area but your stop would need to go at 1290 (a full 30 points away from Fridays close). So, the best we can say in this weekly format is to buy pullbacks as they occur intraday - you're more likely to find tighter stop levels.
When do we give up on our cautiously bullish stance? Well, we do not want to see price spending too much time below last week's low - that would have us standing aside. Friday closed with a bear flag which should lead to a retest down. For the bullish case to remain intact, that should be only a retest. Anything too much lower and we would be standing aside.
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| November Soybeans: A market poised on the edge of a breakout
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The soybeans chart shown below shows that price is on the edge of a massive breakout. In fact, at the time of this writing, price is above the chart formation. IF it closes above the trendlines, then we will look to buy all short term pullbacks. Position traders can buy with a stop below last friday's low. BUT - you must wait to make sure that price closes above the trendline - you don't want to get caught with a temporary move above the trendline only to find price collapsing back into the range.
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| Metals - Gold
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Last week, we suggested that GOLD could be poised for a breakout and but we cautioned that you should wait for the breakout to occur before entering the trade. It turns out that this cautionary note was on the money - as it usually is when price is range bound. As the chart above demonstrates, GOLD simply continues to ping-pong around in its range. There is going to a lot of opportunity to buy or short gold once it breaks this range but until then it is best to stand aside this market and keep watching for the break of the triangle.
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| The Trade(s)
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S&P: Buy intraday pullbacks as long as price stays above 1300.
GOLD: No trade - wait for breakout
NOV SOYBEANS: Wait for CLOSE above 1400 then buy or buy intraday pullbacks. Absolute stop below last Fridays Low.
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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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| Other Information
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