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NET
COMMERCIALS, FALSE BREAKOUT, AND CRUDE OIL AT 200DMA
by James
West
buythebottom.com
forever a student of the markets
September 10, 2006
False
Breakout
Last
week the market broke above resistance, (red rectangle) but did not hold
support and came back down the very next day.
Right now the market is stuck in a trading range between 704.5
and 714. If we make a lower
low, I expect a bottom to materialize by Monday or Tuesday.
And if we go above 714, then I will probably remain on the
sidelines until I see a good opportunity…perhaps on a pullback.
Broad
Markets
Russell
2000 [ http://www.buythebottom.com/rut.html ]
Net-commercial position decreased by 533 contracts, but remains over
10 000. In my book, this
favors higher prices for this index in the intermediate future.
S&P
500 [ http://www.buythebottom.com/spx.html
]
Net-commercial position decreased by 7702 contracts; this raises an
eyebrow, but is not yet indicative of a top, at least from where I am
standing.
NASDAQ
100 [ http://www.buythebottom.com/ndx.html
]
Net-commercial position increased slightly, by 269 contracts; above
5000 continues to look bullish.
Dow
Jones [ http://www.buythebottom.com/indu.html
]
Net-commercial position increased by 1202 contracts.
Overall net-commercial position remains negative…More
on this next week.
Crude
Oil [ http://www.buythebottom.com/wtic.html
]
Net-commercial position continues to move up, as oil is trading
slightly below its 200 day moving average.
This is support, and the bottom is probably not too far away.
Commercials are buying oil at these levels, and will probably
continue to do so…until of course prices rally to new highs, then
commercials will become net-sellers.
The risk/reward ratio
for this market is getting better and better. Again,
this market is not yet setup, but it is only a matter of time… I would
give it 1 more month, 2 max.
Gold
[ http://www.buythebottom.com/gold.html
]
Net-commercial position decreased by 14 020 contracts.
This is not what I was expecting, but then commercials don’t
really care for my expectations. I
think commercials will remain buyers (overall) at these levels - $600
gold – but we should know for certain in the next few weeks.
US
Dollar [ http://www.buythebottom.com/usd.html
]
The US Dollar finally rallied, look for higher prices still.
Net-commercial position went up by 651 contracts last week.
Where this market will top, I do not know, but so far, I think
there is more upside to this market.
My best,
James
©
2006 James West
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INFORMATION
James West
www.buythebottom.com
Toronto, Ontario, Canada
Email: westjam @ gmail.com (Remove the space before and after @ when
sending your email)
The
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