July Wheat As Potential Short
Each evening we focus on the most interesting aspects for the upcoming trading day. The comments are based on observations of the nightly updates of the Futures and Market Bias pages. They are provided for educational purposes only and are not intended to be direct trading advice. Also, keep in mind that these remarks are made up to 12 hours in advance of the markets opening. Therefore, overnight events may alter the outcome of these observations.
Last night, I mentioned July Wheat [WN9>WN9], as a potential Turtle Soup Plus One short candidate. Let’s take a look at where one might have entered the contract, placed protective stops and possibly taken profits today. Below yesterday’s low (a), around 269 3/4 provides a good spot to enter. Because we are looking for a quick reversal, once filled, the initial protective stop could be placed right above yesterday’s high (b), around 275 1/4. Once the position is profitable, you could then tighten stops to help ensure -at worse- a scratch trade. Also, notice that the contract hit its old lows and bounced off of them (c). This area might be a good time to take profits as the contract failed to break through its old lows.
Source: Omega Research.
There are two markets that look interesting to me tonight.
July Copper [HGN9>HGN9], on the Pullbacks Off Highs List, gapped open to 10 day lows but reversed to close well. This may have shaken out the weak longs and possibly clears the way for the contract to trade higher. Look for a buying opportunity here.
Source: Omega Research.
Volatility Watch
Even with today’s sell off, the June Japanese Yen [JYM9>JYM9] remains on all three Volatility Explosions Lists. Continue to watch for a larger than normal move (in either direction) as volatility reverts back to its mean.
Best of luck with your trading on Monday!
Dave Landry
PS-Reminder: Protective stops on every trade!