Commodities – Page 109 – Slope of Hope with Tim Knight

Slope of Hope Blog Posts

Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.

Push to 1201 ES? (by Springheel Jack)

By springheel_jack - 15 years ago (19, Oct 2010 3:46:06 AM)

In an ideal world the next few days would play out as follows. USD would fall to the strong support trendline at 75.75 while ES rose to a target in the 1200 area. They would trough and peak respectively on the same day and then reverse, with the obvious target for ES being at the IHS neckline in the 1130 area. It may not play out that way of course, and the reversal periods for equities and USD often don't coincide, but sometimes they do, as they did at the low in February, and with both close to decent probability reversal areas it may well happen that way this time.

On ES I know Pug is seeing a likely high in the 1200 area during the next few days and I have a rectangle on ES that is suggesting the same, with a target in the 1201 area. These break up 68% of the time though the rectangle is a bit sloppy to my eye, and the last rectangle that I saw on ES a few days ago broke downwards of course. This one won't break downwards unless we are to see a significant support break on ES, so I'm expecting that it is likely to break up:

In terms of support on ES and SPX, I have the support trendline on ES at 1066.5 ES at the moment, with the SPX lower channel trendline in the 1172 area. Those will obviously break downwards at some stage but I'm not seeing anything to suggest at the moment that the break is likely to happen today. Here's the ES chart from the August low:

On EURUSD have a clear rising channel at the moment, with the next upside target slightly over 1.42 and support at 1.385. Support looks strong with four touches on the support trendline, but EURUSD has started a topping process by the look of it, and the next part of that process would be a break of that support trendline, but I'd expect even in that case to see a last spike up into the 1.41 area. Here's the current EURUSD rising channel:

Copper is very close to the upper trendline of the broadening top I've been watching. I've been looking at that carefully this morning, and I have the most likely location for the trendline at 390. There are only two previous touches to the trendline of course, and the first touch had a significant intraday shadow on the candle, so I've drawn in two other possible alternate trendlines and it is also worth noting that the target for the rising wedge that broke up is 405:

There's been a lot of speculation over the last few days as to where the amazing runs on AAPL and GOOG might find their next intermediate tops. I've looked at both charts and I don't really have a view on GOOG, but I have a rising channel on the AAPL weekly chart that suggests that the next reversal should be in the 335 area. That's worth noting as if AAPL reverses then Nasdaq should reverse too:

There are significant downside risks here and now though. While I've been writing GBPUSD, which appears to be topping out, has broken the recent channel support trendline and we're close to completing the head on what may well be a head and shoulders reversal pattern. If so however, I'd still be expecting a last move up to make the right shoulder of course. With EURUSD and GBPUSD both in apparent topping processes though, a bottom for USD looks close, and when it reverses it may well carry equities with it.

Even Slicker Than ES (by Trade Flight Plan)

By Trade Flight Plan - 15 years ago (14, Oct 2010 9:16:04 AM)

As a quick followup to our ESpresso! post, we thought we would share a snapshot of oil, one of our favorite futures instruments. But first, a quick update on that rascal /ES…

– 1160s (prior S/R level): BROKEN
– 1175s (a highly regarded level): HIT
– 1200s (are they serious?): NEXT??
– 1230s (the end of the bearish condition): SERIOUSLY??

Now back to CL… Last week, we circulated our latest CL analysis with a group of likeminded traders. OPEC, French oil strikes, QE2, Chinese demand, and record inventory levels aside, here are the major levels we have been watching for a couple weeks. Our states report on oil includes:
– 81.60 (support): HELD
– 83.10 (defended by buyers and sellers many times yesterday): HIT
– 83.80 (the next volume cluster): HIT and TESTED last night again during globex
– 84.60 (prior highs): HIT at 84.50, we're not sure we would want to short this level again if we retest
– 86.50: ARE THEY KIDDING?

These levels are not necessarily probabilities, but price discovery and value area possibilities.

Just for kicks, let's check out what the commercial entities are doing with their oil positions based on the latest weekly Commitment of Traders (COT) info. These are airlines, producers, transportation companies, and other big hedgers. Same rules apply as last time:

Red=commercial traders, yellow=small spec traders, blue=large non-commercial traders.
Green vertical lines show relatively high COT readings by the commercials. Red vertical lines show relatively low COT readings for these slick oil hedgers.

Hmmm, someone's getting ready. They might be early, it might not happen for awhile. But it sure looks interesting.

Mass Bear Capitulation (by Springheel Jack)

By springheel_jack - 15 years ago (14, Oct 2010 2:33:16 AM)

We crossed some big lines in the sand yesterday and the equity bear camp across the blogosphere is capitulating en masse. They're right to capitulate as this is clearly a big impulsive wave up, and waves like that tend to come in groups. Until something serious changes, then the bulls are in charge and that should be respected.

It has been my view for a while now that we are in a new bubble (of three big bubbles in recent years), fuelled by government debt and money printing, and that this bubble would be likely to continue until government profligacy provokes a big bond market crisis. That's still my view, and that crisis looks to be at least a year in the future, and perhaps as many as three. Until that happens there's not much mileage shorting this market in my opinion other than for short term reversals, and the big summer reversal looks over now.

The Nasdaq broke both the intraday and closing April highs yesterday:

SPX is still in the main rising channel from the last low, and the target for the next hit of the upper trendline of the rising channel is in the 1210 – 1220 area. Pug's primary scenario now has this wave up finishing in the 1215 area and that might well be right. Regardless of that no end for the wave will be confirmed until that SPX rising channel is broken:

However I think it would be a mistake to think that we're just going to shoot to the moon here while USD dives towards zero. On USD particularly there is every reason to think that we will see at least a strong bounce and very possibly a major reversal in the near future. We're coming up to the key support level on the USD chart, and sentiment looks very promising. Dollar bulls were down to 6% at the big low in March 2008, and 3% at the higher low in November 2009. They're at 3% again now and the rising support trendline from those two lows is at 75.8, not far below the 76.6 level at the time of writing. That support trendline could break of course, but the odds look good for a reversal there:

There are other reasons to think that USD may bounce there. AUDUSD has not yet reached parity with USD, unlike CADUSD which did that yesterday, but that's likely to happen soon, and I have a major resistance level in the 101.2 to 101.5 area:

I've posted the copper chart quite a few times as well pointing out the overhead resistance in the 392 to 394 area. Copper's been as high as 386.75 this morning so we're close to that too:

Can USD rise while equities are also rising? Yes, and that's exactly what we saw for five months between the last USD low in November 2009 and the equities high in April 2010. The equities low this summer was also made a month after USD topped and reversed, so there's no reason to think that can't happen again.

Chart on Oil (Mike Paulenoff)

By TheTechTrader - 15 years ago (07, Oct 2010 5:03:05 PM)

For better or worse, richer or poorer, my big picture pattern work on oil continues to warn me that I should treat the May decline from $87.15 to $64.24 as the first downleg either in a large, incomplete correction, or the first downleg in a bear market for oil.
The only way to invalidate those scenarios will occur on a price climb that hurdles $87.15. Barring upside continuation, the bearish scenarios projects to an optimal target of $63-$58. Whether or not today’s weakness represents the end of the “recovery rally” or just a pause prior to yet another surge towards the May high is too early to tell. However, as of this moment, the nearby oil price action has the potential to put in a significant downside reversal day, which is a strong signal that a near-term trend change has occurred for oil.

Originally published on MPTrader.com.

Chart on Gold (Mike Paulenoff)

By TheTechTrader - 15 years ago (05, Oct 2010 10:56:01 AM)

Spot gold prices rocketed again in overnight trading, reacting to Bank of Japan's renewed ZIRP as a cue to investors to get out of very low or no rate of return investments into riskier ones! Gold certainly qualifies and also satisfies the desire to protect against an inflationary shock that likely is the light at the far end of the "tunnel," as well as against domestic and global political instability.

My intermediate-term work points to $1350/80 next, which is just 2%-4% above current levels and just might represent a minor target in a price move that appears to be picking up "parabolic" type pattern momentum. At this juncture, only a decline that breaks $1280 will begin to compromise the powerful upside assault of gold prices.

Originally published on MPTrader.com.