Fake-Outs
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.
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face=”Arial, Helvetica”>For a back-to-basics look at
retracement levels, see my latest trading lesson,
Introduction To Retracements.
There are only two
markets that look interesting to me tonight (Thursday).
September bonds
(
USU0 |
Quote |
Chart |
News |
PowerRating) broke above their recent trading range on
Thursday (a). Then, on a benign PPI report, they began
rallying on Friday on what looked like a continuation move.
However, while the breakout players were reaching for their
calculators to see how much money they were making, the
contract reversed, sold off, and closed poorly. This false
move may have traders trapped on the wrong side of the
market.
For the nimble,
look for a shorting opportunity here.
width=”470″ height=”320″>
Speaking of false
moves, after the mother-of-all fake-out moves on Thursday,
September coffee
(
KCU0 |
Quote |
Chart |
News |
PowerRating) imploded on Friday. This
suggests that the downtrend remains intact. For the
risk-adverse,* look for a shorting opportunity here.
December cotton
(
CTZ0 |
Quote |
Chart |
News |
PowerRating) continues to rally from lows. However, the
overall downtrend looks like it remains intact. Look for a
shorting opportunity on any resumption of weakness.
Best of luck with
your trading on Monday!
face=”Arial, Helvetica”>Dave Landry
P.S. Reminder:
Protective stops on every trade!
*Trading a
"weather market" like this involves excessive
risk.