| Technical Analysis Ethanol Futures $DAX $CAC JNJ CAT Economic Watch |
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| Monday, December 11, 2006 |
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Monday, December 11th, 2006
Pre- Market Update- $WTIC, Ethanol, $DAX, $CAC, CAT, & JNJ
Good Morning. This week the Market has a fed meeting on Tuesday, as well as the Goldman Sachs earnings report coming out tomorrow morning. Then, on Wednesday, there is the OPEC meeting. There is also economic data such as oil and gas inventories coming out this week. Expect a choppy trading environment this week which will create a lot of noise due to news flow. Be cautious placing big bets either way this week. Be patient and disciplined this week and do not over trade and over react to news.
Oil -Light Crude-Continuous Contract (EOD) ($WTIC) - Daily Chart
The daily chart of WTIC shows that Oil has completed it's counter trend wave 3 to 4 pullback. Oil has broken out of it's diamond bottom pattern and is now in a move up to wave 5. Oil looks to make another move up to test it's previous highs around $70.00. Indicators and oscillators are bullish, and stochastics are bull flagging, and the PPO is showing bullish divergence. Note the bullish cross of the moving averages. Due to the Fed meeting this week, do not be surprised if $WTIC experiences a pullback to the 34 EMA around $61.00. These are only a few of the portfolio stocks have been recommended for the Oil sector: SU, UPL, OXY, VLO, BRY, and CNQ. Please look at the rest of the portfolio for other oil sector stock plays.
Ethanol January Contract 2007
I am bring up the chart Ethanol, because many people do not know that Ethanol trades like a commodity. You can see that Ethanol topped in June and July and then bottomed in August/September and then snapped back up and rallied up in a bullish V shape. Ethanol is acting very well.
German DAX Composite (DAX)- Daily Chart
The DAX has been in a strong wave 3 move to the upside since June. The first chart of the DAX shows the rise as the MACD goes negative as it goes vertical down. This is suspicious action. However, if you ignore the MACD and look at the stochastics instead you will see that they are pointing straight up. This inequality between the MACD and stochastics gives me room to pause. The same holds true for the French CAC 40 Index (CAC)- Daily Chart.
Caterpillar, Inc. (CAT)- Weekly Chart
The weekly chart of Caterpillar illustrates that it has been trading in a wave 3 to wave 4 counter trend pullback channel since April of '06. As you can see, CAT has been holding it's uptrend line since it placed it's recent lows at $58.99. CAT remains in a 1-2-3 bearish trend reversal. However, the PPO and stochastics are beginning to reverse upwards. If CAT breaks the uptrend line it is in trouble. Nevertheless, I think the chart is promising enough to put CAT on the watch list.
Johnson and Johnson - (JNJ) - Weekly Chart
The weekly chart of JNJ illustrates that it is in a cup and handle pattern. The indicators and oscillators are a 1-2-3 bullish trend reversal. JNJ may pull back to the 34 EMA to finish forming it's handle part of the pattern. Once the pullback is complete JNJ may be a possible trade set up. I think the chart is promising enough to put JNJ on the watch list.
UPDATED FROM LAST THURSDAY "REMEMBER THE 34EMA" IN THE 61'S EXPECT A TEST (IT REMAINS IN A RANGE)
ECONOMIC WATCH
ETHANOL CURRENT CHART
$DAX CURRENT CHART
$DAX CURRENT CHART
$CAC CURRENT CHART
$CAC CURRENT CHART
CAT
JNJ
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