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Actionable news in QQQ: PowerShares QQQ Trust, Series 1,

For All You Inexperienced Commodities Traders

When we traded on the New York Commodities Exchanges, we learned that the typical indicators one relies on, become meaningless when certain factors overtake logic.

Traders can buy up a commodity future ignoring technical resistance, overbought strength indicators and Fibonacci numbers. A commodity such as oil, for example, can go limit up for days. Back in September 1990, once the Persian Gulf War began, crude oil futures ran from $17 a barrel to $29 in a few days.

By October, the price traded to $35.00. By November, it continued to run to $40 a barrel, just before the big sell-off back down to $28.00. In the last month, oil futures traded from $49 up to 57.60. Several factors account for the rally. The most recent news story involves the arrest of Saudi Princes.

Naturally, I see droves of analysts calling for a top of this move. They point out pivot points and overbought RSI’s.

And, they could be correct. Yet, bathers who lack voluntary control of certain functions, like traders who sense a melt-up, find that the weak longs empty out of the pool leaving them plenty of room to swim.

Should new longs heed the County Health Department recommendations? Currently, the oil rally may have precipitated what could be, the moment I have been waiting for. A few weeks ago, I wrote about the historically low ratio between equities and commodities. “The ratio between the performance of commodities versus stocks has only been this low twice in the last 100 years.” Furthermore, equities have enough diversion to suggest the ratio already has begun to narrow. Transportation IYT, is holding the 50-DMA although remains under the monthly channel top.

One sign of over bloated equities would come from this sector, should it sell off more. The Russell 2000 (IWM), after having 2 inside days in a row, needed to close over 148.96 as a start to show commitment from the longs. Closing price: 148.82

Granny Retail (XRT) tried and tried to clear 40.00. Even with Michael Kors rallying 15%, XRT could not make it. That market is relying almost solely on Semiconductors, Nasdaq and FANG stocks. They could still do the heavy lifting and have. However, I can tell you that the other Modern Family sectors must also jump in the pool. Today, Biotechnology (IBB), already in a warning phase, did not do much to attract any new speculators. These days, many Commodities have ETFs to trade instead of futures.

I suggest you check out USO, XOP, OIH and XLE for starters. Then, look at the metals, softs and agriculturals. DBA and DBC, topics of my daily on October 10th, have already yielded 2 profit targets. Swimmers-even if you prefer to wear a wet suit-the time to bathe in the commodity pool is nigh.

S&P 500 (SPY) Another new all-time high

Russell 2000 (IWM) Needs to clear 149.25 then really, 150. Hold 147

Dow (DIA) New all-time highs

Nasdaq (QQQ) New all-time highs-are you thinking Mish is nuts by now calling attention to commodities with all these new highs?

KRE (Regional Banks) 2 Inside days. 57.00 pivotal

SMH (Semiconductors) Yep, new all-time highs

IYT (Transportation) Back below the monthly channel on the new month-still best place to watch. 174.75 the 50-DMA

IBB (Biotechnology) 310 support held-now looking at 317 to clear, then 322.

XRT (Retail) Closed shy of 40.00. Not so good. Needs to hold 39.25.Over 40.50 is a decent long

IYR (Real Estate) Happy day here with the ease on rates. Unconfirmed bullish phase

GLD (Gold Trust) 119.75 support. If clears 122 good sign

SLV (Silver) 16.25 cleared.

GDX (Gold Miners) Needs to clear 23.10 with volume

USO (US Oil Fund) 10.80 now support

XLE (Sel Energy Spdr Fd) Cleared the 50-week MA with conviction

OIH (Oil Service Holders) Lagging behind XLE with resistance coming up at 27.00

XOP (Oil & Gas Exploration) Cleared 35.52 the 50-week MA, which is a good risk point

TAN (Solar Energy) Breakaway gap to start the week

TLT (iShares 20+ Year Treasuries) 6-day rally from recent lows into resistance-125.25 now pivotal support to hold

UUP (Dollar Bull) 24.37 the 200-week MA and 24.80 resistance