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Earl:
I am not ready to buy copper yet, but I see a lot of potential on the long
side. Note that in terms of the Weekly continuation chart, copper pushed
below strong support three weeks ago. So far, no meaningful follow through
to this breech of support has occurred. The lack of selling pressure as
the market moved below price support is a behavior that I monitor for (a
lack of selling pressure in a market that has violated a significant
technical level is always noteworthy). This occurs against a background of
sharply rising Open Interest (new shorts entering). The rise in OI leaves
the market vulnerable to a strong covering rally in the event of even a
modest move higher. The weekly oscillator that I use (its nothing other
than a slowed and smoothed stochastic that I have gotten comfortable with
over the years) has moved into a deeply oversold condition (as has the
daily).
Anyway, I have been focusing on this market for the last week or so.... A
thrust or a sign of strength that takes out at least one of the triggering
mechanisms that I use will put me long. I would vastly prefer that the
thrust occur after a completed test of the 12/11 low but I don't think that
I will be very picky when the time comes. If the market goes ahead and
breaks down before hitting one of my triggers, I will wait for the next
promising pattern or behavior.
In terms of very recent action the little hourly rally has the earmarks of
a corrective flag. I wouldn't be surprised to see the market work its way
a bit lower over the next few days.
Don't get me wrong.... Im not saying that the lows are in or that the
market can't post a significant decline, but I am saying that many of the
behaviors and conditions that I monitor for long term changes in trend are
present.
Hope all is well.
Stewart.
At 07:12 AM 12/17/98 -0700, Earl Adamy wrote:
>My target for confirmation of decline was 6571 and we came up just short at
>6585. For now it remains to be seen if we can retrace to 7063 then we have
>to get back above resistance formed by several key continuous contract
>pivots at 7560-7570. For now I categorize the action in copper and oil as a
>bounce. Am looking to buy oil funds at lower levels.
>
>Earl
>
>-----Original Message-----
>From: Ira <ist@xxxxxx>
>To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
>Date: Wednesday, December 16, 1998 10:36 AM
>Subject: Copper
>
>
>>Is this just a bounce? How high it will go can not be determined at
>>this time on a long term chart. but on the short term charts there are
>>upside targets. Has it bottomed before reaching the very long term
>>targets of 59.50 and 61.50? They only had a 60% probability. Ira
>>
>
>
Stewart Taylor
Taylor Fixed Income Outlook
Voice: 501-219-9774
Fax: 501-228-0963
E-Mail: staylor@xxxxxxx
Web Site: http://www.cei.net/~staylor/
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