Here is a trade I am looking at potentially for Thursday, Cocoa. The post was a play on words, COCOA is actually very bitter without sugar added. We like to add sugar to everything, but in this case a little is needed to consume this stuff. For those who may not know, Dark Chocolate is one of the most healthy things you can eat. I eat small amounts of it every day. Of course if you pig out on it you will get fat, so moderation is the key. You can read up on it if you don't believe me.
The setup does not have my new toy in the buy zone unfortunately, but we do have a favorable seasonal and cyclical picture here in place. We also have a pretty clearly defined trend in place that if broken would signal a potential trend change in this market. That along with a couple of my proprietary tools, is telling me to look for buys here, so I am. I mentioned in my resolutions that I wanted confirmation on trades, and in this case the seasonal and cycle stuff fits that bill even though my indicator does not.
Speaking of the indicator, here are the 3 stocks I am trying to get into today with it. CLP, SHAW, ZMH. I have limit orders at the prior days closes for all 3. Unfortunately they are all down already, so they may not fill. This is one potential problem with my new stock techniques. The conditions trigger at the prior close and sometimes the next day they just go right away without ever even visiting unchanged for the day. This is frustrating, but it tells me how good this methodology is so it does not bother me too much. The CPT trade exit today is a close < 61.73. We are way below that here at press time so if it stays down here this trade will wind up basically a scratch. The entry was 61.12 and we are at 60.99 right at the moment. If it is .13 either way I consider that a scratch. I am really excited about this approach. It might very well be the best mechanical thing I have ever created, time will tell.
I am looking for sells in the Grains up here now, and Wheat is the one with a good seasonal. All of them now have my indicator in the sell zone now. It could be that I will take a different commodity than Wheat when I enter the trade, but I am looking at this group as a whole for sells. There are not any entry setups for today. This is on the watch list.
My short term tools have not rolled over yet, so this is a no go for me right here. I am anticipating just knowing how they tend to move from day to day, that they are going to wind up in sell mode in a few days. There are certainly approaches that just promote selling strength like this against a trend. I like them, but I want to price to start moving in my direction typically, which this has not done yet.
I just wanted to show this chart again, with the huge divergence in POIV that is at hand. This along with the weekly trend being down, are the main reasons I am bearish on stocks at the moment. Larry Williams even mentioned this in his Larry TV segment this past weekend. This is no surprise since many of the things I look at utilize tools he has created. There is no way of knowing if moves are big or small from these types of situations, but they do happen with pretty high probability. I am looking for sell signals in the stock indexes but I don't have any yet.
I would also like to buy Gold or Silver on a pullback here if we get one in the next few days but nothing for either of them today.
Confucius say don't assume anything, when you do you make an ass ........ Let the markets go where they will, use stops, and don't assume anything. You just never know what will happen. Hopefully you all know Confucius was not really the gent who coined this phrase.