Sweet Reversal

pattern occurs on the day following the signal, with follow through in
subsequent days.

 

October sugar
(
SBV1 |
Quote |
Chart |
News |
PowerRating) staged its biggest rally since the failed-breakout
expansion bar logged on the year-to-date high on June 29. Large moves in the
opposite direction of the trend can occur at a market extreme.

Sugar traded at a four-month low last week. The sweetener closed up .31 at 7.96.

 

Notice how sugar provided two potential pivots for long-side entry. The first
was off the four-day opening bar that pulled back and was a possible entry point
after trading above the high of the low bar of the pullback (using five-minute
bars). The second entry came on a trade above the high of the opening bar, the
point where sugar accelerated. Sugar went on to log an intraday flag-on-flag
pattern. If this market opens or trades — and holds — above 8.00, this could
be a constructive sign.

 

Stock index futures closed mixed, but Nasdaq 100s
(
NDU1 |
Quote |
Chart |
News |
PowerRating) followed Dow
futures’ performance from Friday by rallying in the afternoon to make good on
its Turtle Soup Plus One buy setup.
(
NDU1 |
Quote |
Chart |
News |
PowerRating) closed up 27.00 at 1656.

 

T-bonds’
(
USU1 |
Quote |
Chart |
News |
PowerRating) rally was capped two ticks below resistance levels
spelled out in Levels From the Bond Pit and gave back gains after setting a new
multi-month high to close up 4/32 at 104 4/32.

 

Both the euro FX
(
ECU1 |
Quote |
Chart |
News |
PowerRating) and Swiss franc, leaders on the Momentum-5 List,
gapped to new multi-month highs. The Swiss unit closed the gap, but the euro FX,
although it too sold off, did not close the gap, working to reinforce the
interpretation of another gap left two days ago as a breakaway gap and implying
much higher levels. The ECU1 closed up .00440 at .89690 and the Swiss finished
up .0013 at .59200.