Opportunities in Soybean Oil, T-Bonds, Australian Dollar and not a pleasant situation with my trade in Cotton.

Opportunities in Soybean Oil, T-Bonds, Australian Dollar and not a pleasant situation with my trade in Cotton.


Last week Cotton almost hit the first target but bounced up. My position is still open with a stop above the last top. Look at the chart below.

Chart showing Cotton analysis

The situation is getting worse because the price could not break below the lower trend line of the rising channel. The market is squeezed between the two trend lines. The problem is my COT short-term setup is signalling a buying opportunity. And the accumulation readings are picking up.

So what to do?

I intend to hold my position for a day or two. The stop will remain unchanged for now. The way I see the situation is that it needs to come down now - Monday or Tuesday. If that doesn't happen we'll probably see a break above the falling, long-term trend line. This is where I'll look to close the position. If it starts to fall and break below Friday's low I will extend the target because a larger movement can be expected.

US 30 Year T-bonds

According to the seasonal chart, courtesy of Larry Williams, we can expect a bottom in US T-Bonds futures this week. At the same time, my short-term COT pattern shows that an up move might take place. The cycles are positive for such move but accumulation is mixed.

Chart showing US 30 Year T-Bonds analysis

The market broke below the recent lows with a large down bar and large volume. With that drop, the price reached a support level (horizontal line). The next bar was an inside bar that suggests a temporary break in the decline (if it is to continue at all).

Now, the immediate reaction should be to the upside with a very short-term target on Thursday's High.

SUGAR has a Spearhead pattern (Piece #M17) indicating a possible up move. It's best to wait for a short-term pullback (a few days). Then I'll look for signals to be long this market.

THE AUSTRALIAN DOLLAR has the potential to decline further. I don't see any signals now but will take them if they appear.


Is it time for the Soybean to follow other instruments from the complex? I think yes. Look at the chart below.

Chart showing Soybean Oil analysis

This market is being sold by the Commercials and bought by the Small speculators. That is bearish. We are approaching the seasonal top this week. Again bearish for this instrument.

On Balance Volume suggest that Soybean Oil is under distribution. Look at how the purple arrow is not making new highs while the price is going higher and higher.

Last week we had a large range day on Monday, which closed near its high. It also closed near the previous significant peak from February 2019 (Blue horizontal line). Such large range days are a price action signal for the end of a trend.

Since we are in an uptrend, it is not wise to sell immediately. But lower short-term high will present such an opportunity.

Now, let's find your missing piece!

Vassil Banov,
Founder of Piece of Trading

Trades mentioned here are either taken or will be taken by the author if the right conditions appear. They are NOT recommendations nor any of this constitute investment advice. Please read the Risk Disclaimer

Charts made with TradeStation®. tradestation.com

TAGS: Australian Dollar, Soybean Oil, Cotton, T-Bonds, Bonds, Sugar, Price Action Trading, Accumulation, Trendline

Find this content helpful? Support our efforts by buying us a coffee!