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Jim Wyckoff's Top Trading Opportunities--Feb. 2, 2007 |
| Sell March feeder cattle futures on weakness. Place a sell stop order for March feeder cattle futures at $94.30. If filled, place a protective buy stop at $95.60. Downside objective is $91.00, or below. Use a trailing protective buy stop if profits begin to accrue. See on the daily bar chart that March feeders have formed a bearish rising wedge pattern. A drop in prices below technical support at the lower trend line of the pattern, which would also trigger the sell stop, would be an early clue that a downside "breakout" from the wedge is occurring, and that feeder cattle futures prices are headed lower in the near term. See, too, on the weekly continuation chart for nearby feeder cattle futures that recent price action has seen a downside breakout from a bear flag pattern. |
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| Sell the March Australian dollar futures on more weakness. Place a sell stop order for the March Australian dollar futures at .7680. If filled, place a protective buy stop at .7755. Downside objective is .7550, or below. Use a trailing protective buy stop if profits begin to accrue. See on the daily bar chart that a bearish head-and-shoulders top reversal pattern has formed. This week's price action was really just a pause after the big downside price move last week, which did produce near-term chart damage. If prices drop below solid technical support at this week's low of .7688, then more chart damage would be inflicted to suggest still more downside price pressure in the near term. Also, the weekly continuation chart for nearby Australian dollar futures does show that a bearish broadening pattern has formed at higher price levels. |
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| Sell the March Japanese yen on more weakness. Place a sell stop order for the March Japanese yen futures at .8230. If filled, place a protective buy stop at .8310. Downside objective if .8100, or below. Use a trailing protective buy stop if profits begin to accrue. The yen is in a solid shorter-term and longer-term price downtrend, with no technical clues the market is close to a bottom. If the yen does drop below solid chart support at this week's contract low of .8238, then that would produce more near-term technical damage to suggest still more downside price pressure in the near term. |
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Disclaimer: There is a high risk of financial loss in futures and options trading. Futures trading is neither easy nor an easy way to make money. It takes hard work to have success. Please use sound money management when trading futures. Past performance is not necessarily indicative of future results. Nothing in this newsletter is intended to be a trading recommendation for you to buy or sell futures or options. All information has been obtained from sources believed to be reliable, but accuracy is not guaranteed. Readers are solely responsible for how they use this information.