Copyright Creative Breakthrough, Inc. 2010.
There are several markets that are expected to show improved “tradability” in the second half of the year. What I mean by trabialirty is a market condition that becomes more expansive and be better suited for “long volatility” trading methods. Simple put the high to low range expanse and the dollar amount of that range is wider proving a better opportunity to capture part of it. In contracts when the high to low range narrows “short volatility methods” are preferred like covered call writing.
Wheat is one example where the base pattern is complete or will be complete with one more minor new low over the very near term. Any move to new lows at 425 would be seen as a bear trap where as a move above old support of 490 should lead to an expansion of the daily range. First target is 630. Confirmation signs that a period of “long” volatility trading has started would be higher volume, a move above resistance by the volatility index and for BB indicator ( or others like RSI ) to surge into an extreme overbought condition.
Jack F. Cahn, CMT
TraderAssist®
Since 1989, Creative Breakthrough, Inc. CTA
