September Dow Jones – Long from 8620 – Last price @ 9238 – Stocks continued higher after posting the strongest July since 1939. The market was supported by a report in USA Today that two-thirds of the S&P 500 companies have reported second quarter earnings and 74% of them have exceeded expectations. That came as a relief to customers, even though the earnings bar was set very low.
The market was also bolstered by the report released of the Institute of Supply Management’s manufacturing index that revealed an increase from 44.8 to 48.9 in July. That was also better than expected, but still a sign of slight contraction.
The rally closed above the previous swing high (9203) after Friday’s reversal date finished as an inside day. An inside day, on the reversal date, is considered a continuation pattern that helps confirmed the bullish TC (trend continuation) pattern.Hold the long position and move the protective stop up to 9055.
September Crude oil – Long from 67.35 – Last price @ 71.42 – Crude oil rose to a new 20-day high and closed above $71 a barrel, as increasing industrial activity bolstered optimism that fuel consumption will rebound in the near future. In the last two issues, I talked about one of my favorite swing trade strategy patterns, the TR pattern, and how it was setting up a bullish pattern at the end of a five-wave continuation pattern. The pattern signal was triggered on Friday, followed by a $2.00 rally on Monday. This allows us to move the stop loss up to 69.05, with a target objective of 72.05.
December Soybean oil – Long from 35.25 – Hit the Target! The long position was closed at 37.47– Grains jumped out of the starting gate quickly and never looked back as they rallied throughout the day. The grain complex was supported by speculators wondering if the weather was too cool in July for good crop development and may reduce yields. It seems we are moving from Global warming to Climate change, as traders are becoming increasingly concerned about yield losses due to cool, wet weather and the possibility of an early freeze following the coldest July in over 100 years, in parts of the Midwest.
December Soy meal –Long from 285.70 – Hit the Target! The strong rally pushed the Soy meal past the 305.50 target objective to close out the long position.
