Take a Break and See The Opportuntities
- Posted by Greg Harmon
- on July 25th, 2011
While studying earnings take a little time out to walk down to the corner and order coffee black with sugar and whatever they are growing out back. This is not another pep talk about spending to boost the economy or about stepping back and relaxing before moving on to the next trade. This is the trade. Take a look at the charts for the iPath Dow Jones-AIG Coffee Total Return Sub-Index ($JO), iPath Dow Jones-UBS Sugar Sub-Index Total Return ETN ($SGG) and Market Vectors Agribusiness ETF ($MOO). These are all ready for a move.
iPath Dow Jones-AIG Coffee Total Return Sub-Index, $JO
The Coffee ETF, $JO, had been in a long uptrend from June 2010 until May 2011. During that time it gave solid reversal signals. Whenever the price hit the top of the Bollinger bands and the Relative Strength Index (RSI) peaked and turned followed by the Moving Average Convergence Divergence (MACD) indicator crossing, the price then fell. Many off those instances are noted with blue arrow. Now that it is in a down trend the opposite is happening. Price hits the lower Bollinger band with the RSI bottoming then the MACD crosses up and price rises. This is about to happen again with the price hitting the Bollinger band, the RSI turning and the MACD improving towards a cross. Get on board.
iPath Dow Jones-UBS Sugar Sub-Index Total Return ETN, $SGG
The Sugar ETF, $SGG, has just retraced to the high from February near 105 and pulled back slightly. There are diverging signals being sent as it sits there. On the upside, the Simple Moving Averages (SMA) are rolling up with the 50 day about to cross through the 200 day SMA, making a Golden Cross, and the MACD is crossing higher. There is also a target on a measured move to 120. On the downside the RSI is diverging sloping lower and extended a bit beyond the 70 line, and it printed a doji candle lower confirming the Evening Star from Friday. If it falls expect a move to at least the 88.98 Fibonacci level and about a 50% retracement of the current move. Watch carefully and play the variety given too you.
Market Vectors Agribusiness ETF, $MOO
Despite the ticker, $MOO, is not about meat but rather mainly made up of the companies that make products to grow food: Fertilizer, seed, farm equipment. Whatever it holds it is breaking a triple top at 55.60 with a rising RSI and a growing MACD. If it continues to hold over this level then it has resistance higher at 57, 57.50 and then 58 before seeing clean air above.
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Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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