The Summer Bullishness Has Officially Joined Elvis
When discussing buying positions at support levels, I mentioned keeping stops near as there were some near term stop areas limiting your risk. Yesterday’s action showed why I recommended such. Had no clue that prices were going down $.28 but there was nothing to show why the support zones should hold on this test. In fact, when the breakout occurred in early August, there was not a lot of zones that the breakout retested. Looking at the Spot October contract, you will see the similarities of the break out with yesterday’s breakdown. Going back to that breakout I think that Elvis has left the summer building.
Now what– in the late afternoon trade on Thursday- prices went down and tested the support trend line from the July and August lows before rebounding. We may see some limited knee jerk rally off of the selloff but I am still more interested in the differential to the November contract which expanded back over $.50 yesterday. There are opportunities in the winter contracts as the market defines its winter bias.