Weekly Crude Oil, Gold, Coffee and Sugar Markets Recap with Mike Seery

Our trading partner Mike Seery is back this week to give our readers a weekly recap of the futures market. He has been a senior analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.

Crude oil futures in the August contract are trading lower for the 3rd consecutive trading session currently trading at 58.87 a barrel while settling last Friday in New York at 59.97 down about $1 for the trading week still stuck in nonvolatile sideways trend despite the fact that prices hit a two week low in today’s trade as I’ve been recommending a short position for over a month and if you took the original trade continue to place your stop loss above the 10 day high at 61.81 risking around $3 or $1,500 per mini contract plus slippage and commission. Crude oil is trading below its 20 day but still slightly above its 100 day moving average as I’ve traded crude oil for 20 years and I can’t remember such a nonvolatile stretch like we’ve had in the last several months consolidating the giant move to the upside. The next breakout level is below 57.00 and if that level is broken prices could move sharply lower but that’s a big if as volatility is extremely low at the current time. Next week is the 4th Of July holiday weekend as I think volatility will remain low until Friday’s monthly unemployment report which could dictate the short term trend.
Trend: Lower
Chart Structure: Improving

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Gold futures in the August contract settled last Friday in New York at 1,202 while currently trading at 1,170 an ounce down about $30 for the trading week remaining incredibly choppy as I was recommending a short position getting stopped out in last week’s trade when prices bumped up against 1,200 as I’m sitting on the sidelines at the current time waiting for another breakout to occur and that could happen soon as prices remain very weak. Gold futures are trading below their 20 and 100 day moving average looking to break the critical 1,170 level and the second critical level is 1,160 if that level is broken I would have to think that the bear market is underway as I see no reason to own gold at the current time as all the interest is in the stock market which is right near all time highs. Gold only seems to rally due to the fact that Greece could possibly exit the Euro Zone and that’s why I got stopped out in last week’s trade. The chart structure in gold is outstanding but if prices do break I will be recommending a short position while placing my stop above the 10 day high which 1,205 risking around $35 or $1,200 risk per mini contract plus slippage and commission so be patient and wait for the breakout to occur.
Trend: Mixed
Chart Structure: Improving

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Coffee futures in the September contract are trading above their 20 but slightly below their 100 day moving average continuing its sideways trend settling last Friday in New York at 130 while currently trading at 136 as I do think prices have bottomed out around the 128 level, however prices have not hit a four week high so I’m waiting for a breakout to occur. The chart structure is improving dramatically as volatility remains relatively low as I do think a breakout to the upside is in the cards as prices hit a 2 week high in today’s trade as many of the agricultural markets have bottomed and are moving higher especially the grain market due to weather problems. The problem with coffee is the fact that we had huge production coming out of Brazil coupled with the fact that of a very weak Brazilian Real against the U.S dollar pushing many agricultural products that are grown in Brazil lower including orange juice, sugar and coffee in 2015, however everything comes to an end and it certainly looks to me that prices are going higher. I deal with many producers down in Brazil and in my opinion I would start to buy the actual cash coffee as I think prices are low enough but for speculators wait for the breakout which would be a 4 week high before entering which could happen in next week’s trade.
Trend: Mixed
Chart Structure: Excellent

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Sugar futures in the October contract settled last Friday at 11.55 a pound while currently trading at 11.92 up about 37 points for the week as I’ve been recommending a short position over the last month and if you took that trade continue to place your stop loss above the 10 day high which is just an eyelash away at 12.12 risking around 20 points or $220 dollars per contract plus slippage and commission as the chart structure is outstanding at the current time. Sugar prices hit a 6 year low as I remember in 2010 prices were trading around 35 rallying with many of the commodity markets due to quantitative easing as that’s how far prices have dropped as production numbers in Brazil are relatively high. Harvest is underway which generally creates a seasonal low at harvest time, however I’m a technical trader and I will continue to stick to the rules and place my stop at the 10 day high as overproduction over the last several years has sent prices to multi year lows and if we are stopped out then look at other markets that are beginning to trend.
Trend: Lower
Chart Structure: Outstanding

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Weekly Gold, Silver and Sugar Markets Recap with Mike Seery

Our trading partner Mike Seery is back this week to give our readers a weekly recap of the futures market. He has been a senior analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.

Gold futures in the August contract settled last Friday in New York at 1,172 an ounce while currently trading at 1,201 an ounce rallying sharply on rumors of a Greece exit possibly happening over the weekend sending prices sharply higher as I was recommending a short position from around the 1,170 level getting stopped out in yesterday’s trade losing around $30 or $1,000 per mini contract plus slippage and commission.

Janet Yellen and the FOMC committee did not raise interest rates earlier in the week sending gold sharply higher hitting a 3 week high but I still remain skeptical of this rally as a deal with Greece will occur in my opinion as the stock market still remains strong keeping money out of the gold market in the short term.

Gold prices have been trading sideways for quite some time breaking out a couple weeks back as this trade went nowhere until yesterday sending high volatility back into this market as I will sit on the sidelines and look at other markets that are beginning to trend as gold remains extremely choppy at the current time.

The U.S dollar is trading near a 6 month low and that’s propping up the precious metals in today’s trade as the next major level of resistance to the upside is 1,225 but I will wait for better chart structure to develop. Trend: Mixed
Chart Structure: Poor

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Silver futures in the July contract settled last Friday at 15.82 an ounce while currently trading at 16.01 continuing its choppy trend right near critical support in my opinion as prices have not rallied much despite the fact that gold rallied $28 dollars in yesterday’s trade . I do believe if 15.40 is broken this market turns extremely bearish, however prices have rallied off that level many times so be patient and wait for the true breakout to occur as I’m sitting on the sidelines at the current time.

Silver futures are trading below their 20 and 100 day moving average telling you that the trend is to the downside, however I don’t like to trade choppy markets so be patient and wait for the chart pattern to improve while keeping a close eye on 15.40 because if that’s broken I think prices could head substantially lower as I don’t see any reason to own the precious metals at the current time.

The problem with the precious metals is the fact that U.S interest rates are on the rise coupled with the fact of a strong U.S dollar longer term as all the interest remains in the stock market which is still right near an all-time high so wait for the true breakout to happen.
Trend: Lower
Chart Structure: Poor

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Sugar futures hit a fresh 6 year low this Friday afternoon in New York currently trading at 11.12 a pound after settling last Friday at 11.72 closing right at session lows as I’ve been recommending a short position from 12.00 & if you’ve been following any of my previous blogs you understand that this trend is getting stronger as prices are trading far below their 20 and 100 day moving averages.

Sugar prices have traded lower 4 out of the last 5 trading sessions and if you took the original trade continue place your stop loss above the 10 day high which currently stands at 12.25 as the chart structure is poor at the current time due to the fact that prices continue to head lower on a daily basis.

Sugar production has been massive over the last several years sending large supplies onto the market coupled with the fact that the Brazilian Real is historically weak against the U.S dollar which continues to put pressure on sugar prices as I’m looking to add more contracts to this position once the chart structure improves and the risk/reward meets criteria which could happen in the next couple of days.
Trend: Lower
Chart Structure: Poor

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Weekly Crude Oil, Gold, Silver and Coffee Markets Recap with Mike Seery

Our trading partner Mike Seery is back this week to give our readers a weekly recap of the futures market. He has been a senior analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.

Crude oil futures exploded this Friday afternoon in New York trading higher by $2.60 a barrel currently at 60.26 reversing recent losses as yesterday prices hit a 6 week low and traded down to $56.51 rallying $5 since as there are rumors of facilities being shut down due to the Texas and Oklahoma floods but time will tell to see if that’s actually true.

Crude oil futures are now trading above their 20 and 100 day moving average showing high volatility as I’ve been recommending a short position when prices hit a four week low around the $58 level and if you took that trade we are underwater currently so place your stop loss above the 10 day high which remains at 61.75 risking around $1.50 or $750 per mini contract plus slippage and commission from today’s price level.

This is a perfect example of why I use my 2% rule of risk on any given trade because anything can happen on any given day as I did not expect oil prices to trade nearly $3 higher today and this trade has been a loser as the risk was $1,800 or approximately 2% of a 100,000 account balance as you must admit you are wrong sometimes but we are still in this trade and not stopped out yet as Monday could be a different story.

Today’s action in my opinion was massive short covering as prices remained weak before today but we will see if there’s any follow through in Monday’s trade and if you did not take this trade the risk/reward is your favor at the current time so take advantage of price spikes while maintaining the proper stop loss.
Trend: Mixed
Chart Structure: Improving

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Gold futures in the August contract are trading below their 20 and 100 day moving average telling you that the short term trend is to the downside after settling last Friday at 1,205 an ounce currently trading at 1,190 down about $15 this week in a very nonvolatile manner as prices are still trading in a 9 week consolidation. The true breakout to the downside is around the 1,170 level as the U.S dollar remains strong continuing to put pressure on gold in the short term, however the chart structure is poor at the current time but that will improve in next week’s trade as a possible short could be in the cards.

As I talked about in many previous blogs I don’t see any reason to own gold at the current time as the stock market despite today’s selloff still remains very strong and the trend in the U.S dollar remains in a secular bullish trend so be patient and wait for a breakout to occur. I have a theory that states the longer the consolidation more powerful the breakout as the breakout is below 1,170 then I would suggest selling a futures contract placing your stop loss above the 10 day high which could happen in next week’s trade as investors are waiting for the U.S monthly unemployment report which comes out next Friday and certainly should send high volatility and price direction back into this market.
Trend: Lower
Chart Structure: Poor

Silver futures in the July contract are trading below their 20 and 100 day moving average telling you that the trend is mixed after settling last Friday at 17.05 while currently trading at 16.70 an ounce down about $.35 for the trading week hitting a two week low. Silver prices broke out two weeks ago and traded as high as 17.75 hitting a 3 month high, however I did not give any trade recommendation because the chart structure was so poor and the risk was way too high to enter so I’m still sitting on the sidelines at the current time.

The U.S dollar has regained its bullish momentum which is putting pressure on silver prices as the trend is mixed at the current time and I don’t like trading choppy markets as its extremely difficult to trade successfully in my opinion as lower prices look to be ahead in my opinion but I’m not recommending any type of position currently.

Volatility in silver at the current time is relatively mild as silver historically speaking is one of the most volatile commodities as something sure will develop in the coming weeks ahead so keep an eye on this market and wait for a better chart structure to develop lowering monetary risk as that’s the main key to successful trading in my opinion.
Trend: Lower
Chart Structure: Poor

Coffee futures in the July contract settled last Friday in New York at 127 while currently trading at 125 a pound down about 200 points for the trading week as I’m sitting on the sidelines in this market and certainly not recommending any type of bullish position as the trend is to the downside but the chart structure is poor as the 10 day high is too far away & does not meet my criteria to enter into a new trade.

Production estimates in Brazil are expected to be very large and that’s what pushing prices lower as the Brazilian Real remains extremely weak against the U.S dollar which is negative anything that’s grown in the country of Brazil as volatility has slowed down this Memorial shortened holiday trading week but look at other markets with better chart structure.

Coffee prices are trading below its 20 and 100 day moving average as I do think there’s a possibility that prices could trade down to the 105 level over the next 4 to 6 weeks as there’s very little bullish fundamental news to dictate prices to the upside in my opinion except possible short covering at this time.

Many of the soft commodities have been going lower including sugar, orange juice, and coffee in recent weeks as global supplies are just very large and that’s what continuing to pressure prices as I don’t see that situation changing anytime soon or at least until the next growing season.
Trend: Lower
Chart Structure: Poor

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Mike Seerys Weekly Crude Oil, Gold, Coffee and Corn Markets Recap

Our trading partner Michael Seery is back this week to give our readers a weekly recap of the futures market. Mike has been Senior Analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.

Crude oil futures in the June contract are trading below their 20 and 100 day moving average as I have been sitting on the sidelines for the last several months in this market but if have a long futures position I would continue place your stop loss above the 10 day low which stands at 56.00 however in my opinion I think prices have topped out.

Strong demand and a very weak U.S dollar have pushed crude oil prices up from a contract low around $46 a barrel to around $63 in Wednesdays trade which has been a remarkable rally in my opinion but I think this market is overextended so I’m still going to remain sitting on the sidelines waiting for better chart structure to develop as this market will remain volatile for the rest of 2015 in my opinion giving you many trading opportunities.

Many of the commodity markets rallied in recent weeks as the U.S dollar is hitting a 3 month low which has been very supportive, however with record supplies overhanging that should keep a lid on prices at this point in time but I just don’t know where short term prices are headed so I’m looking at other markets that are beginning to trend.
Trend: Higher
Chart Structure: Solid

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Gold futures settled last Friday at 1,174 an ounce while currently trading at 1,185 in a relatively quiet trading week while still trading below its 20 and 100 day moving average continuing its lower to choppy trend as the true breakout does not occur on the upside until 1,225 is broken or on the downside at 1,170 as I remain neutral at the current time.

The chart structure is starting to improve as gold prices have gone sideways for the last six weeks consolidating the recent down move as the U.S dollar is hitting a three month low and has been supporting gold and silver in recent weeks so be patient and keep an eye on this market at the current time. The monthly unemployment came out strong stating that the unemployment rate is 5.4% sending the stock market sharply higher as I’m surprised that gold futures are not lower this afternoon as the interest rates in the United States have been on the rise sending volatility into the commodity markets as I still see no reason to own gold at the current time but currently this market is stuck in a consolidation and in my opinion it’s very difficult to make money when a trend is not in sight.
Trend: Mixed
Chart Structure: Improving

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Coffee futures in the July contract are higher by 300 points this Friday afternoon currently trading at 134.70 a pound after settling last Friday at 134.20 in a very nonvolatile trading week. I have been recommending a short position when prices broke 135 in last week’s trade and if you took that recommendation place your stop loss above the 10 day high which currently stands at 144 risking around 1000 points or $3,800 per contract plus slippage and commission.

The chart structure will improve dramatically next week helping lower monetary risk as prices are still trading below their 20 and 100 day moving average telling you that the trend is to the downside as big production could come out of Brazil which could send prices in my opinion as low as 100 a pound as the Brazilian Real has strengthened against the U.S dollar in recent weeks, but still remains in a long-term bear market which is negative for anything grown in Brazil.

The next level of support is Wednesdays low around 130 as many of the soft commodities were higher this Friday afternoon so continue to play this to the downside in my opinion as I think the risk/reward is in your favor.
Trend: Lower
Chart Structure: Excellent

This Chart Must Be Broken Before a Bear Market Can Be Confirmed

Corn futures in the December contract are trading below their 20 and 100 day moving average after settling last Friday in Chicago at 3.80 a bushel while currently trading at 3.79 down slightly for the trading week as 55% of the crop has already been planted with expectations for this Monday’s crop report as high as 85% as the weather in the Midwestern part of the United States is excellent and especially in the state of Illinois. I have been recommending a short position when corn prices broke 3.95 a bushel and if you took that trade place your stop loss above the 10 day high which currently stands at 3.87 risking around $.8 or $400 from today’s price level plus slippage and commission as the chart structure remains outstanding.

Expectations of this year’s crop are around 13.6 billion bushels which is 500 million bushels less than last year, however carry over levels are very large coupled with a strengthening dollar compared to last year as I still remain bearish especially as the weather remains ideal, however it’s an extremely long growing season as we usually do get some type of weather scare to the upside due to hot and dry weather forecasts, however the trend is your friend and the weather forecasts are bearish.

Traders await next week’s USDA crop report which definitely can send volatility back into this market but weather is the main focus at this time as we head into the hot and dry summer season which can send volatility into this market as we suffered a drought in 2012 sending prices to a record high of around $8.50 so make sure you place the proper amount of contracts while also placing the proper stop loss.
Trend: Lower
Chart Structure: Excellent

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Mike Seerys Weekly Natural Gas Futures Recap

Our trading partner Michael Seery is back with his weekly recap of the Futures market. He has been a senior analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.

Natural gas futures in the June contract settled last Friday at 2.68 while currently trading at 2.56 down around 12 points for the trading week as I have been recommending a short position in the last several weeks as this trade has basically gone sideways to slightly lower and if you took the original recommendation place your stop loss above the 10 day high which currently stands at 2.73 risking around 17 points or $425 per mini contract plus slippage and commission and if you are trading the March contract the risk would be $1,700 plus slippage and commission as the chart structure is outstanding at the current time.

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Many of the commodity markets were lower this afternoon, however average temperatures in the Midwestern part of the United States are dragging natural gas prices lower with the next major resistance around 2.50 so continue to play this to the downside and take advantage of any rallies as the chart structure is outstanding allowing you to place a very tight stop therefore lowering monetary risk as prices are still trading below their 20 and 100 day moving average telling you that the trend is to the downside as prices closed at the weekly low.
Trend: Lower
Chart Structure: Excellent

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Weekly Futures Recap with Mike Seery....Crude Oil, Gold, Coffee and More

Our trading partner Mike Seery is out with his calls for this week and he includes some of reliable rules to protect our profits.

Crude oil futures in the March contract settled last Friday at 49.00 while currently trading at 47.50 up about $.80 in early trade this Friday morning in New York as extreme volatility has occurred in recent days and if you’re still short this market I would now place my stop above yesterday’s high which currently stands at 51.73 risking around $4.25 or $4,250 per contract plus slippage and commission from today’s price levels. Crude oil futures are trading significantly below their 20 and 100 day moving average telling you that the trend still remains bearish as oversupply has decimated prices in recent weeks as who knows how far prices can actually go but stick to the rules as the 10 day high has tightened up considerably as prices have gone sideways in the last week or so with big trading ranges.

Crude oil prices have been dramatically cut in recent months due to the fact that Saudi Arabia refuses to cut supply coming out earlier this week reiterating that fact that they will not cut which keeps sending prices lower as they are trying to squeeze some American companies to get out of the business as the U.S is now a major producer which we weren’t just 5 years ago and that’s what’s changed the situation. The crude oil market I believe for the 1st time in history is not putting any price premium as in the past we always had a $10 or $20 price premium due to the fact of chaos in the Mideast but at this point problems in the Mideast are not affecting crude oil prices so this market still could remain bearish for some time to come especially with the U.S dollar hitting a 9 year high which is pessimistic all commodity prices.
Trend: Lower
Chart structure: Improving

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Gold futures in the February contract are slightly lower this Friday afternoon in New York after settling last Friday at 1,216 currently trading at 1,260 as I’m currently recommending a long futures position while placing your stop loss below the 10 day low which is around 1,209 risking around $50 or $1,650 on a mini contract plus slippage and commission. Gold futures are trading above their 20 and 100 day moving average hitting a 5 month high as the chart structure will also start to improve on a daily basis starting next week as the market has caught fire recently due to worldwide problems as money is pouring back into the precious metals and out of the S&P 500 in the beginning of 2015.

Yesterday the Swiss government announced they will let the Swiss Franc float rocketing that currency up while sending shock waves through the bond and currency markets and it certainly looks to me that problems are here to stay here for a while as Europe is a mess and this could push gold up to the next resistance level of 1,300 – 1,320 so take advantage of any price dip while maintaining the proper stop loss risking 2% of your account balance on any given trade as gold has finally turned into a short-term bull market once again.
Trend: Higher
Chart structure: Improving

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Coffee futures in the March contract have been extremely volatile in recent weeks due to the fact of concerns of lack of rain down in Brazil pushing prices up in over the last several weeks as I’m currently sitting on the sidelines in this market as coffee prices are trading above their 20 but still below their 100 day moving average telling you the trend is mixed. Coffee prices settled last Friday at 180 and are currently trading at 175.30 topping out around the 185 area as volatility should increase as the next 3 weeks are very critical to the coffee crop as traders are keeping a close eye on Brazilian weather.

As I’ve talked about in many previous blogs I think it’s very difficult historically speaking to have back to back droughts, but you never know as the weather is unpredictable, however this market has been choppy so wait for a better trend to develop and avoid any type of futures position at this time in my opinion. Many of the commodity markets are still heading lower because of the U.S dollar hitting a 9 year high and if adequate rain comes to key coffee growing regions over the next 3 weeks I would have to think that a retest of the 160 level would be in the cards so have patience and wait for a trend to develop.
Trend: Mixed
Chart structure: Poor

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Mike Seerys Weekly Crude Oil Market Recap for Week Ending Friday December 19th

Crude oil futures in the February contract are up $3 this Friday afternoon in New York currently trading at 57.40 after settling last Friday around 58.08 a barrel finishing down nearly $1 for the trading week and traded as low as 53.94 before slightly rallying as oversupply and lack of demand continue to push oil prices to 5 year lows.

If you’re still short this market I would continue to place my stop above the 10 day high which in Monday’s trade will be 64.35 risking around 700 points or $7,000 per contract plus slippage and commission, however the chart structure will improve on a daily basis as the 10 day high will be lowered significantly in the next several days.

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This has been one of the best trends in recent memory as prices have basically collapsed in recent weeks ever since OPEC announced that they will not cut production on Thanksgiving Day which sent prices sharply lower as there is also huge supplies here in the U.S. so who knows how low prices can go as I still highly recommended not to be buying this market so if you are currently not short I would sit on the sidelines and look for a market with better chart structure and less risk.

Crude oil futures are trading far below their 20 and 100 day moving average as consumers around the country are certainly benefiting from lower oil prices at the pump which is also good for the stock market in my opinion as volatility in oil is as high as I’ve ever seen it so be careful as volatility is here to stay.
Trend: Lower
Chart structure: Improving

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Surging U.S. Dollar Brings High Volatility in Crude Oil, Gold, Silver and Grains

Crude oil futures in the December contract rallied $.65 to finish around 78.60 a barrel after hitting multi-year lows this week at 76.00 and if you’re still short this market I would place my stop above the 10 day high which currently stands at 82.88 a barrel which is around $4 away or $4,000 risk per contract as chart structure is starting to improve on a daily basis. Crude oil futures are trading far below their 20 & 100 day moving averages as prices rose today on rumors of a Saudi Arabia explosion sending prices sharply higher at one point, however I think this is just a dead cat bounce so continue to play this to the downside making sure you place the proper stop loss risking 2% of your account balance on any given trade as the trend clearly is to the downside.

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The U.S dollar was up again this week and continues to surge to the upside and I do believe that the foreign currencies continue to move lower while continuing to pressure crude oil and many of the other commodity prices such as gold, silver, and the grain market, however every market does need a kickback so take advantage of any rally in tomorrow’s trade as I still think oversupply and a strong dollar take this market sharply lower here in the short term.

As I’ve talked about in many previous blogs I have missed this trade to the downside but one of my theories was the fact that the United States government wants lower oil prices not only to help the U.S consumer but to punish Russia which has sanctions and their whole economy is based off of strong crude oil prices so this is the double whammy to Russia and I think this will continue for some time to come.

On Tuesday the Republicans gained power in the Senate and have control in the House and that is rumored to be very bearish crude oil prices as the Keystone pipeline could now take affect which have been blocked by the Democrats and will make the United States even more oil independent and put pressure on prices in the short term as the fundamentals in this market are absolutely terrible. The volatility is very high in crude at the present time so make sure that you trade the proper amount of contracts risking only 2% of your account balance on any given trade because you need to have an exit strategy when you are wrong.
Trend: Lower
Chart Structure: Improving

See you in the markets Monday!
Mike Seery

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What GM, GS and XOM Do, So Does the Broad Market

Over the years working with professional traders I found it interesting how each individual has their bellwether stock they follow to gauge the stock markets trend and identify reversals before they take place.

About 10 years ago I traded with a floor trader who swore that whatever GS (Goldman Sachs) did the market followed. Another said he only used XOM (Exxon Mobil), while Stan Weinstein says GM (General Motors) was the stock to follow.

While each of these traders have been highly successful with their bellwether stock, I wanted to cover these in more detail and show you have to get the best of each of their strategies working for you. This will help you properly time the market, identify the overall market health and at which point you should be getting long or short stocks in your portfolio.

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If you would like to successfully trade both bull and bear markets then join my trading and investing newsletter today and catch the next hot sectors for 2014 using my ETF Trading Strategies.

Chris Vermeulen
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Weekly Futures Recap With Mike Seery

The U.S dollar sold off slightly this week finishing at 79.70 hitting a 12 week low looking to retest the contract lows which were hit 4 months ago around 79.40 as I’m recommending a short position in the U.S Dollar Index placing my stop above the 10 day high which currently stands at 80.60 risking around $800 per contract as the trend now has turned bearish in my opinion. The commodity markets certainly like the fact that the U.S dollar is headed lower as well as the bond market rallying sending interest rates to new recent lows as it reminds me of 2006 all over again when stocks and commodities moved higher as the U.S equity market hit all time highs in the S&P 500.

Remember when you trade you want to try to keep it simple and this trade is extremely simple by recommending selling one futures contract and continuing to place your stop at the 10 day low as I do think contract lows will be breached next week as the Euro currency finished up over 100 points in the last 2 days to close above 1.3870 also hitting new recent highs with 1.40 next resistance point.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

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The bond market finished lower for the 3rd straight trading session on Friday especially the five-year notes finishing down 12 ticks to close at 119 – 06 in the June contract having one of its weakest 3 days in over 2 months as the unemployment number came in at 175,000 which was construed as extremely bullish the economy sending bond yields higher. I have been advising a short position in the five year note for several months and I still believe if you’re a longer term investor and not necessarily a trader who gets in and out these are terrific selling opportunities as next month’s unemployment number in my opinion will improve and I think this is just an up day that you should be taking advantage of to get short.

The five year note is trading below its 20 & 100 day moving average hitting a 5 week low on Friday with large volume and if you’ve followed me on any of my previous blogs I generally place my stop at the 10 day high or low as an exit strategy, but as I stated earlier I am a long term investor on the five year note as I think rates are moving higher over the course of time and this is a trade you might stay in for 2 years but take advantage of historically low rates because eventually the Federal Government will stop there bond purchases it’s just a matter of when. If you have any questions on how to structure a portfolio to getting short the bond market while taking advantage of historically low rates feel free to contact me anytime will be more than happy to help.
TREND: LOWER
CHART STRUCTURE: AWFUL

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Coffee Futures in the May contract are trading above their 20 day moving average and are trading 8000 points higher than their 100 day moving average that’s how far prices have come in the last 6 weeks as the drought in central Brazil continues its stranglehold on coffee growing regions pushing prices sharply higher currently trading at 198 in the May contract and I’ve been recommending a long position in coffee and if you’re still in this market I would place my stop below the 10 day low which is currently 170 as the chart structure is starting to improve & if you been reading my previous blogs I received a very interesting email last week from one of the largest coffee producers in Brazil and he was stating that there crop was absolutely devastated and there could be long term ramifications into next year as well and he also showed me many pictures of coffee trees and they were decimated too so I continue to remain bullish this market, however this market is extremely volatile at the current time so look at some July bull call option spreads as my next level is up to 2.50/2.75 as a possible target.
TREND: HIGHER
CHART STRUCTURE: IMPROVING

20 Survival Skills for the Successful Trader

Sugar futures in the May contract sold off 31 points this Friday afternoon in New York but still finished higher by about 40 points for the trading week continuing its bullish trend as the drought in central Brazil is pushing up prices in recent weeks and I continue to recommend a bullish position in sugar while placing your stop loss at the 10 day low which currently stands at 17.00 which is about 100 points away or $1,100 per contract. This is the 3rd consecutive week that sugar has traded higher and has turned from a bear market into a bull market with the next major resistance around 19/1950 which was hit last October and I do believe prices could go back up to those levels as the commodity markets in general have turned higher as the CRB index its trading at its highest level since October 2012 as many commodities are at all time highs. Anything grown in Brazil at this time due to the drought seems to be moving higher so I remain bullish the entire soft commodity complex just make sure that you do have an exit strategy in case prices turn around. Sugar futures are still trading above their 20 and 100 day moving average telling you that the trend currently is higher.
TREND: HIGHER
CHART STRUCTURE: EXCELLENT

Advanced Crude Oil Study – The 15 Minute Range

Corn futures in the December contract which is the new crop which will be harvested this fall was down $.05 at 4.84 but rallied about $.13 for the trading week closing on a disappointing note in Chicago and I’ve been recommending a bullish position in corn for quite some time while placing my stop at the 10 day low which currently stands at 4.60 risking around $.24 from today’s level or $1,200 per contract as traders are awaiting Mondays USDA crop report. The chart structure in corn is outstanding at this time and that is why am recommending this trade as prices are trading above their 20 and 100 day moving average continuing the bullish trend as Spring is right around the corner here in Chicago as there is still large amounts of snow in the fields but we are starting to warm up this week with 40/50° days and this should be an extremely volatile year in corn as prices will have tremendous fluctuations due to weather conditions.

The whisper number for Monday’s crop report is around 92 million acres as last year was 97 million acres planted so the crop probably will not be a record this year as we harvested nearly 14 billion last year but this will be a long growing season but at the current time. I’m recommending buying on weakness making sure that you have some type of exit strategy as I think commodities as a whole are going higher.
TREND: HIGHER CHART
STRUCTURE: EXCELLENT

Click here to get more of Mike's commodity calls for this week!

International Buying & Your Shot at 1,000% Gains

By Jeff Clark, Senior Precious Metals Analyst

 

As a gold investor in North America, it sometimes feels like I'm living in some far off land where everyone believes in fairy tales and unicorns.


Most people around me don't seem to see anything wrong with the Fed creating $65 billion a month out of thin air, hey, it's not $85 billion anymore, what a relief! It's business as usual for the US government to spend billions more than it takes in, and a public debt hovering at $17.2 trillion—up from $7 trillion just 10 years ago—seems no more alarming than a rainbow.

No surprise then that these people don't feel any need to own assets that might help them in times of crisis. Hard assets like…..gold.

I'm reminded of a visit I made to China several years ago. One night, I awoke in the middle of the night—something was crawling under the bed sheet. I shot up like a cannonball, trampolined out of bed, and hit the light switch. I searched and searched for whatever bug had made its way under the sheet, but never did find the little vermin. Still, I was so creeped out, I spent the rest of the night on the couch.

I told the staff the next morning what happened—and they did nothing. They just stared at me. They spoke English, so it wasn't that they didn't understand me. It was just that none of them seemed to think it was a big deal. One of them even chuckled. They obviously didn't appreciate the potential health hazard and had no sense of customer service. I left bemused, wondering how people could accept bedbugs as normal—or even if they did, how they could not care about a customer's experience. It was like being on another planet.

I have some of those same feelings when I think about mainstream investors today. How can they not appreciate the potential financial hazard inherent in something as obviously dangerous as today's unprecedented levels of money printing? How can they not care that they have nothing solid, like gold, at the core of their investment portfolios? It's like these people think they live on Planet Sesame Street.

Most people seem to really believe that today's heavy-handed government interventions are not only the right course of action, but will have no negative fallout. Massive currency dilution, unstoppable tides of rising debt, and never-ending fiscal imbalances are hardly a way to cure decades of money mismanagement, and certainly aren't consequence-free. How is it that this is not obvious to all?

I honestly don't know. Perhaps people are aware at some level, but the truth is just too awful to face, and so people don't.

Very few of my friends and neighbors own any gold. Rarely am I asked about it anymore, even by those who know what I do for a living. The doctor I saw last month gave me the distinct impression I could be doing better things with my money. Most of the mainstream media ignore gold, while many of the big banks loudly proclaim their latest short position as if they had some sort of divine insight.

I'm starting to feel like the proverbial lone voice in the woods….

 

But We're Not Alone!

As deluded as most Americans seem to be, that is definitely not the case for everyone in the world—the Japanese, for example, are much more prudent and levelheaded.

I wonder if my fellow citizens would feel differently if they lived in any of these countries where people have witnessed economic insanity firsthand, and are acting accordingly:

Japan was a net importer of gold in December, the first time in almost four years. Net purchases totaled 1,885 kilograms (60,604 ounces). It was only the tenth time Japan was a net monthly buyer since the end of 2005. There are reports that Japan's pension funds, which hold the world's second-largest pool of retirement assets, are buying gold.

Dubai gold jewelers just reported the strongest gold sales in seven years. Pure Gold Jewelers, one of the largest dealers in the country, reported a 25% increase in gold jewelry sales during the Dubai Shopping Festival this year.

The state of Gujarat in India reported that silver bullion imports hit a five year record from April 2013 to January 2014. Imports were more than 450% higher than the same period a year ago. The Indian government has since hiked the import duty on silver to 15%, the same rate as gold, and official imports in January subsequently fell. Smugglers will surely add silver to all those secret luggage compartments they've been using for gold.

Australia's Perth Mint said gold sales jumped 41% and silver 33% in 2013. In January, gold demand was up 10% and silver 8%.

Mexico's pension funds are now investing in gold after strict investment regulations were recently lifted. The World Gold Council says it spoke to 10 of the country's most influential pension fund managers (with over $160 billion in assets) and was told that they began investing in gold and commodities in 2013.

Central banks were once again big buyers last year. Of those that have reported so far…

• Turkey purchased 150.4 tonnes (4.83 million ounces)
• Vietnam 110 tonnes (3.53 million ounces)
• Russia 57.3 tonnes (1.84 million ounces)
• Kazakhstan 24.16 tonnes (776,762 ounces)
• Azerbaijan 16.02 tonnes (515,054 ounces)
• Sri Lanka 6.51 tonnes (209,301 ounces)
• Nepal 6.22 tonnes (199,977 ounces)
• Ukraine 6.22 tonnes (199,977 ounces)
• Indonesia 4.04 tonnes (129,889 ounces)
• Venezuela 1.87 tonnes (60,121 ounces)

 

And of Course, There's China….

 

Last year's record import number is impressive enough, but it's the pace that's mind-blowing. 1,139 tonnes is…

• More than 2011 and 2012 imports combined.

• Over 42% of global mine production last year.

• Roughly twice as much as the amount GLD sold in all of 2013.

 

Meanwhile, Back in the Good Ol' US of A…

Gold coin demand for 2013 jumped 24%. Some headlines have pointed out that January 2014 gold and silver coin sales were down compared to a year ago—but January 2013 was the all-time record for single-month sales. Further, Eagle and Buffalo gold coin sales were more than double December's sales, and were the highest since last April. Silver coin sales in January were almost four times more than in December.

There, now I feel better.

Even if you sometimes feel like a lone wolf investing in this market, understand that worldwide demand for gold and silver bullion continues unabated. If you live in the US, realize that people in many other countries are seeing more positive headlines about gold, have more friends who own gold, and heck, could even walk into a bank to buy gold.

I don't think the people in these other countries are stupid. Whatever consequences result from the historic levels of currency dilution across the globe, they seem as sure as I do that they'll be good for gold.
What should you buy? I first recommend buying gold and silver bullion to establish a financial safety net. And then, to maximize gains on the more speculative end of your portfolio, you should look at Louis James' just-released "10-bagger List for 2014" in the February issue of International Speculator. A 10-Bagger is a stock with the potential to gain 1,000% or more—that's not a typo, we really did make 10 times our money on junior gold stocks the last time the sector rebounded, and Louis thinks that's about to happen again.

For example, one of those prospective 10-Baggers is a junior with a multimillion-ounce gold project that's run by one of our Explorers League honorees. This company is on the verge of securing the funds needed to build its exceptionally high-margin gold mine, but it's on sale. Speaking of the potential, Louis said: "If the company delivers, it'd be easy to see these 40-cent shares trading for $4" by 2015.

Investing in these stocks, and there are nine of them on Louis' list, could quite literally make you a fortune, but the opportunity to get in on the ground floor is fading fast.

Click here to learn more about Louis' 10 Bagger List for 2014 or watch the recording of our just aired one hour video event "Upturn Millionaires" to learn why the time to act is now.


International Buying & Your Shot at 1,000% Gains

The Great American Wall Of Worry – U.S. Stock Market

Traders and investors all around the world are having trouble climbing over the wall of worry/fear with the US stock market, and rightly so. There is a lot of things taking place and unfolding that carry a high level of uncertainty. Let’s face it, who wants to invest money into the market when it’s hard to come by (high unemployment, banks are still extremely tight with their money, companies are nowhere near wanting to hiring new staff).

The hard pill to swallow is the fact that the stock market loves to rise when uncertainty is high. It’s almost doing it just to drive investor’s nuts who sold out near market bottom or recent correction. You must overcome the urge to short the market when the economy looks so bearish in the years ahead, and continue to trade with the trend.....Read the entire story and view the charts.



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How to Spot & Time Stock Market Tops

Since the middle of April everyone and including their grandmother seems to have been building a short position in the equities market and we know picking tops or bottoms fighting the major underlying trend is risky business but most individuals cannot resist.

The rush one gets trying to pick a major top or bottom is flat out exciting and that is what makes it so darn addicting and irresistible. If you have ever nailed a market top or bottom then you know just how much money can be made. That one big win naturally draws you back to keep doing it much like how a casino works. The chemicals released in the brain during these extremely exciting times are strong enough that even the most focused traders fall victim to breaking rules and trying these type of bets/trades.

So if are going to try to pick a top you better be sure the charts and odds are leaning in your favor as much as possible before starting to build a position.

Below are a few charts with my analysis and thoughts overlaid showing you some of the things I look at when thinking about a counter trend trade like picking a top within a bull market.

Utility Stocks vs SP500 Index Daily Performance Chart:

The SPY and XLU performance chart below clearly shows how the majority of traders move out of the slow moving defensive stocks (utilities – XLU) and starts to put their money into more risky stocks. This helps boost the broad market. I see the same thing in bonds and gold this month which is a sign that a market top is nearing.

That being said when a market tops it is generally a process which takes time. Most traders think tops area one day event but most of the times it takes weeks to unfold as the upward momentum slows and the big smart money players slowly hand off their long positions to the greedy emotion drove traders.

Look at the chart below and notice the first red box during September and October. As you can see it took nearly 6 weeks for that top to form before actually falling off. That same thing could easily happen again this time, though I do feel it will be more violent this time around.



SPY ETF Trading Chart Shows Instability and Resistance:

Using simple trend line analysis we see the equities market is trading at resistance and sideways or lower prices are more likely in the next week or two.



Stocks Trading Above 150 Day Moving Average Chart:

This chart because it’s based on a very long term moving average (150sma) is a slow mover and does not work well for timing traded. But with that said it does clearly warn you when stocks are getting a little overpriced and sellers could start at any time.

General rule is not to invest money on the long side when this chart is above the 75% level. Rather wait for a pullback below it.



Stocks Trading Above 20 Day Moving Average Chart:

This chart is based on the 20 day moving average which moves quickly. Because it reacts quicker to recent price action it can be a great help in timing an entry point for a market top or bottom. It does not pin point the day/top it does give you a one or two week window of when price should start to correct.



How to Spot and Time Stock Market Tops Conclusion:

As we all know or will soon find out, trading is one of the toughest businesses or and one of the most expensive hobbies that one will try to master. Hence the 95-99% failure rate of individuals who try to understand how the market functions, position management, how to control their own emotions and to create/follow a winning strategy.

With over 8000 public traded stocks, exchange traded funds, options, bonds, commodities, futures, forex, currencies etc… to pick from its easy to get overwhelmed and just start doing more or less random trades without a proven, documented rule based strategy. This type of trading results in frustration, loss of money and the eventual closure of a trading account. During this process most individuals will also lose friends, family and in many cased self-confidence.

So the next time you think about betting against the trend to pick a top or a bottom you better make darn sure you have waited well beyond the first day you feel like the market is topping out. Stocks trading over the 150 and 20 day moving averages should be in the upper reversal zones and money should be flowing out of bonds and other safe haven/defensive stocks to fuel the last rally/surge higher in the broad market.

Also I would like to note that I do follow the index futures and volume very closely on both the intraday and daily charts. This is where the big money does a lot of trading. Knowing when futures contracts are being sold or bought with heavy volume is very important data in helping time tops and bottoms more accurately. And the more experience you have in trading also plays a large part in your success in trading tops and bottoms.

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Correction near but Bull Market has LONG waves to Go!

Are you using Elliot Wave theory in your trading? Today David Banister of Market Trend Forecast is laying out the Elliot formations in detail. Do yourself a favor and take a few minutes to make sure you are looking at this market through his eyes. Can any of us call the pull back exactly and reliably? No, of course not. But we should all be taking this into consideration.

The SP 500 has been on a tear as we all know especially since the SP 500 bottomed at 1343 several months ago. My work centers around forecasting using Elliott Wave Theory along with other technical indicators. This helps with projecting the short, intermediate, and longer term paths in the stock market and also precious metals. This larger picture Bull Cycle started in March of 2009 interestingly after an exact 61.8% Fibonacci retracement of the entire move from 1974 to 2000 lows to highs. At 666, we had completed a major cycle bottom with about 9 years of movement to retrace 26 years of overall bull cycle. That was a major set of 3 waves (Corrective patterns in Elliott Wave Theory) from the 2000 highs to 2002-3 lows, then 2007 highs to 2009 lows. Once that completed its work, we were free to have a huge new bull market cycle off extreme sentiment and generational lows.

It’s important to understand where we were at in March of 2009 just as much as it is today with the market at all time highs. Is this the time to bail out of stocks or do we have a lot more upside yet to go? Our short answer is there is quite a bit more upside left in the indexes, but there are multiple patterns that must take place along the way. We will try to lay those out for you here as best we can.

Elliott Wave theory in general calls for 5 full wave cycles in a Bull pattern, with 1, 3, and 5 bullish and 2 and 4 corrective. We are currently in what is often the most bullish of all the patterns, a 3rd of a 3rd of a 3rd. In English, we are in Primary wave 3 of this bull cycle which will be 5 total primary waves. We are in Major wave 3 of that Primary 3, and in the Intermediate wave 3 of Major wave 3. That is why the market continues its relentless climb. This primary wave 3 still has lots of work to do because Major wave 3 still has a 4th wave down and a 5th wave up to finish, then we need a major 4, then a major 5.

That will complete primary wave 3. This will then be followed by a Primary wave 4 cycle correction that probably lasts several months, and then a Primary wave 5 cycle to finish this part of the bull market from March 2009 generational lows… and all of that work is going to take time. Once that entire process from March 2009 has completed, then we should see a much deeper and uglier correction pattern, but we think that is at least 12 months or more away.

What everyone wants to know then is where are we at right now and what are some likely areas for pivot highs and lows ahead? We should complete this 3rd of a 3rd of a 3rd here shortly and have a wave 4 correction working off what will likely be almost 300 points of upside from SP 500 1343. We could see as much as 90-120 points of correction in the major index once this wave completes. Loosely we see 1528-1534 as a possible top and if not then maybe another 30 or so points above that maximum into early June. This should then trigger that 90-120 point correction, and then be followed by yet another run to highs.

We could go on but then we will lose our readers here for sure, and as it is… this is all projections and postulations, so it’s best to keep the forecast to the next many weeks or few months. Below is a chart we have put together showing the structure of Major wave 3 of Primary 3 since the 1343 lows. Once that Major wave 3 tops out (see the blue 3) then we will have Major 4, then Major 5 to complete Primary wave 3 since the 1074 SP 500 lows. Whew!



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Are you ready? Gold Traders and Investors Better Get Ready To Rumble!

We have talked about how gold, silver and gold mining stocks have been flying under the media radar for over a year and that they were not catching the attention of traders, investors and the public anymore. I also said it would take some sharp price action (breakdown or rally) for it to be front and center again on TV, Radio and Newspapers.

But since gold has plummeted 17.5% dropping from $1600 down to $1320 per ounce with silver and gold stocks falling also they are now headline news once again. This move has caused some serious damage to the charts when looking at it from a technical analysis point of view. Below are some basic analysis points that show a new swing trading entry point.

The Technical Traders Chart Analysis

Broken Support – Once a support level has been broken it becomes resistance. Gold is trading under a major resistance level.

Momentum Bursts - Since the April 15th low, gold has been setting up for another short selling entry point. Remember the market tends to move in bursts of three, seven or ten days then price reverses direction or pauses. It has now been 10 days.

Moving Average Resistance – Gold has worked its way up to the 20 day moving average which can act as resistance.

Bearish Inside Bars – This type of chart pattern points to lower prices. When there is a big down day followed by 3, 7 or 10 up days inside the price action of the down bar we can typically expect another sharp drop which tests the recent lows as shown with the arrow on the chart.



Gold Short Selling Conclusion:

In short, gold is setting up for a low risk entry point that should allow us to profit from lower gold prices. Using an inverse ETF like DZZ or even the gold mining stock inverse ETF DUST could be played. These funds go up in value as the price of gold falls.

While I expect gold to pullback, I do not think it will make another leg lower. Instead, a test of the recent low or pierce of the low by a few bucks then reverse and start building a bullish basing pattern before going higher.

From our trading partner Chris Vermeulen.

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It's Make or Break Time For Crude Oil....And Your Vote is?

Short of a lifetime or a new bull run in the making. Thoughts?



Chart posted courtesy of The Slope of Hope, please join the conversation there as well.

An Interesting Twist on Shorting Gold

In todays short 4 minute video we explain exactly what we mean by a "short gold position." It does not mean we are bearish on gold, however the scenario we point out in this video could make money by being short gold and long another important market.

The video points out what the scenario is, and which market you should be long in, against a short gold position. This is an interesting twist and a video you shouldn't miss.

As always our videos are free to watch and there is no registration required. Please feel free to re-tweet this video on Twitter or share this video on Facebook. Also take a minute to leave a comment and let us know what you think about the video.

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Has The Gold & Silver Play Gone To Greed?

The past few months it seems the gold and silver play has been getting a little crowed with everyone wanting to own gold. While I am a firm believer that these precious metals are a great hedge/investment long term, I can’t help but notice the price action and volume for both metals which looks to me like they are getting exhausted.

Silver – Daily Chart
The silver chart below shows an extremely high volume reversal candle in early November which typically leads to lower prices and some times a major change in the trend. That being said silver remains in an uptrend with the possibility of a bullish pennant forming. On the other hand there is a possible head and shoulders pattern forming. I will be looking for light volume sideways chop keeping a close eye for a possible neckline breakdown or a momentum thrust to the upside for a possible trade.

Gold – Daily Chart
Gold is forming a bullish and bearish pattern also giving us a mixed signal. I am currently neutral on gold and not really looking to take part until we get some type of clear price action.

US Dollar – 60 Minute Chart
The dollar has shown some strength recently. The US dollar play has been to take the short side, and a couple weeks ago we saw the dollar breakdown from yet another consolidation. It seems like everyone shorted the dollar yet again. That could have been a key pivot low for the dollar. On the weekly chart that bounce was off a major support trend line helping add some fuel to the rally I would think.

The chart below shows the recent rally and breakout to the upside. Currently the dollar is pulling back to test the breakout level (support). It will be interesting to see how this week unfolds. If the dollar bounces then we just may see metals break below their necklines to make another heavy volume drop.

Weekly Precious Metals Update:
In short, I have mixed feelings for gold and silver. Yes I think they are good long term plays, but after the run they have had it is also very possible a much deeper correction is about to take place and we may not see new highs for another year. That is a long time to have money sitting in an investment when it can be put to work in other investments. I know the herd (general public) is all head over heals in love with gold and silver which is one of the reasons why I think we are nearing a top if we didn’t already see it a couple weeks ago.

Don’t get me wrong I’m not saying to sell and go short metals....not yet anyways. They are both still in an up trend but some interesting things are unfolding which could cause big action in the coming weeks.

For now please join my trading newsletter and get my ETF trading signals, daily analysis and educational material at The Gold and Oil Guy.com

Chris Vermeulen


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Spain is in Pain – US Dollar & Gold Are Safe Havens

It’s been an interesting week with Spain being downgraded as Europe debt crisis widens. This has investors looking at the US dollar in a new light thinking that maybe it’s not that bad of an investment after all. This sent the US Dollar higher along with the price of gold so far this week.

The past 7 days we have seen both the US Dollar and Gold rise together which is not something that happens often. With financial crisis’s popping up around the world I think the US dollar and gold will continue to strengthen (with corrections along the way). I think it will take another 12-24 months before another wave if issues arise in the financial markets and until then we just continue to focus mainly on buying the dips and corrections with the occasional short play in the larger corrections.



SP500 – Daily Chart

On April 14th we saw an extreme level of selling which sent the broad market sharply lower. This sell off was followed by value buyers pushing the prices back up to new 2010 highs.

Well this week we have seen the same extreme selling volume and the question we all want to know is will there be buyers this time around?



ETF & Futures Trading Conclusion

Gold is in a bull market but it was setup for another round of selling but this Spain issue has been a pain. If we had another downward word move on gold to the $1115 – 1120 area it would have washed out the majority of gold bulls resetting it’s self up for a big rally.

The Europe debt crisis has thrown a twist into the picture helping boost the price of gold. Gold could still head lower washing out the weak positions but the picture is fuzzy. Silver did not react much to this news as it’s not really seen as the safe haven gold or the US Dollar are.

As for stock picks and the broad market, it looks and feels like we are about to start a correction. But this week we saw fear in the market again with the VIX and selling volume surging higher to levels which have triggered temporary bottoms in the past. The problem I see here is that some key price levels have been taken out, so the odds are pointing to lower prices in the near future. But Tuesdays panic selling has pushed the market into an oversold condition so we should see a drift upwards for 1-4 days before sellers get active again as they want to sell and short the market at premium prices.

In short, precious metals are not giving any clear price action to take advantage of yet, and the SP500 looks like it’s on its last legs before heading lower for a meaningful correction which should provide a short setup and then a nice long setup once it bottoms out.

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