SP500 is Approaching the All-Time Highs and I am Still Long. COT patterns in GBP, Heating Oil and Sugar

SP500 is Approaching the All-Time Highs and I am Still Long. COT patterns in GBP, Heating Oil and Sugar

It seems that I was wrong last week, about the Canadian Dollar but Wheat and Copper both fell below the fulcrum points and reached their short-term targets. In Wheat, one can wait for a little more but with such a strong 0T down day (Friday) Copper is screaming “close now”. To resume the selling, we need to see a low short-term high. 
  
Three short-term COT patterns might lead to good trades in the next week. Let's take a look at them. 

SUGAR

The first, of the short-term COT patterns, appeared in Sugar and it is suggesting a decline. The Commercials are selling this market for some time now, which might mean that the decline won't be only a short-term. That is something the time will tell.

Sugar analysis


For now, we have this pattern at the exact moment when the seasonal is turning down, and there is a divergence between price and On Balance Volume (OBV). The price is going up while the OBV is not following. All these create a strong short setup. 
  
But the price action doesn't show anything. We are in a strong uptrend, which means taking only complex short signals, preferably on a lower short-term high. I don't see any at the current moment but will be on a lookout for them. 

British Pound and Heating Oil 

Two of the other COT down setups are in British Pound (GBPUSD) and Heating Oil

In Heating Oil, the signal was given on Wednesday after the instrument failed to make a new high. Since then it is falling, and we have to remember that this is a short-term pattern, which means that the move might well be over. 

However, HO and all energies are entering into a period when seasonal decline can be expected. So, a new lower short-term high with a good price action signal will be a good place to short this one. 
  
GBP is the same, it is entering a period of a seasonal decline, but besides that and the short-term pattern, I can't see anything else to back an eventual sell. I'll wait for a good complex sell signal. 

US STOCK MARKET

From the targets discussed in the last week's post, two were hit, and only one remains active – 3370.

S&P500 analysis

This is where I plan to close my long position. I'll do that because every single one of the last 5 bars is suggesting an up move but the chances to have a new all-time high on the first attempt are small. Most probably there will be some sort of consolidation or a pull-back which will give another opportunity to enter. 

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
Seasonal indicators courtesy of Larry Williams, ireallytrade.com. Charts made with TradeStation®. tradestation.com

TAGS: S&P500, SPY, SPX, COT, Commitments of Traders, Copper, British pound, Canadian Dollar, Cycles, Fundamental Analysis, Sugar, Heating Oil, Price Action Trading

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