OFF THE BEATEN PATH
We are getting the bounce in the Bernanke's now I have been looking for and so far it is not a sell yet and may not be. I will have to see over the next few days if this backs it's way into my parameters or just takes off again. I still consider the trend to have turned down which is why I am leaning to shorting the bounce, but price speaks the loudest. At this moment I am unsure the way this looks now if it will be a sell in a day or two or not. While all that is going on, I thought it might be fun to stray off the talk of the town, and look at a few other things that appear to be in the process of setting up something.
The first chart is a Weekly chart of Rice, which by my rules is in a downtrend. It may not appear so by looking at the chart, but it is the way I look at it. Now that I know I am in a weekly selling zone, the next chart is the daily chart and look at what is brewing there.
We have had a very sharp rally and POIV is really lagging here. Some of the short term things I use have turned down, so now it is a matter of seeing if we get some type of a sell pattern to develop on a little bounce. As per the usual, I do not know if this will take place or not. If it does not I will move on. I keep my discipline, look for very specific patterns in things, then take action if they show up. I cannot say I do not force trades here and there, I just did it in the 10 Year, but in general with very rare exceptions, I am pretty good about sticking to things. I do miss many trades, but I focus on how the one's I do take work out not the ones I miss. Forcing trades will lead you to trouble, it is just a question of when not if. Let's see how this Rice trade in the making works out.
The next chart is that of Sugar, again another very strong up move, that is potentially setting up a sell for me on some of my shorter term things. It will take a few days for this to be where I need it to be, and what I am hoping for is the COT Synthetic to move down during that period like it did in the previous examples I have marked with red arrows. This would tell me there is insider selling on a bounce, and would help confirm the trade on the short side.
I had mentioned for Tuesday that if the high of Monday went in the Bond Complex, I thought it was bullish. I also mentioned the 10 Year was the stronger of the 2 Bond contracts. In that market the high did not get taken Tuesday, but it did in the Bonds. I have to admit, I see this bar pattern as erratic and am unsure about this market at the moment. If we were to get a down close on Wednesday, there may be a buy on Thursday, but I am not chasing them right here. Maybe they will take off Wednesday and if they do I will not be aboard. When looking at the 10 Year I see three consecutive reversal bars in opposite directions, and I do not want to guess here.
I am also looking at shorting Copper, and also it appears a Gold short might be in the making a week or so from now, but it is too soon to tell on that one. I do like the prospect of that due to the buying climax we just saw with 11 straight up closes. However, I would never just blindly sell into that kind of strength stand alone, so I am going to need a bit more here that what we have so far.
Good Trading to all