Back in the market

Once again I’ve been distracted from trading with holidays, travel, and other commitments. But I’m back into the swing of it now, and had a very profitable week last week with a series of briefly held positions (short the NASDAQ, long gold and the FTSE).

At the open this week I’m looking to take the following positions:

Short Brent Crude

Crude is back in an uptrend again, and while I think that’s likely to continue we look poised for a brief correction. Stochastics have a bearish divergence and are in overbought territory. Meanwhile MACD is also looking bearish. I think the trend will be confirmed if $71 is breached, and I’d be looking for a target of around $67. Initial stop loss at $73, with a very quick trailing stop once the trade moves into profit.

Short DOW

Volatility has really reduced in the DOW over the past week, and it closed forming a hanging man signaling a potential end to the current trend. The MACD indicator crossed into bearish territory earlier in the week. Stochastics are overbought, and also have a bearish divergence. All signs point to a correction in the current trend. Initial stop is going in at $9,435 with a price target of $8,200. Trailing stop will kick in $9,170.

Short FTSE

The FTSE twice tried to test new highs closing out the week, and both times fell away and closed off the highs. Now MACD has shown a bearish crossover, Money Flow Index a bearish diversion, and Stochastics are overbought. I expect a round of profit taking at these highs (it’s the highest it’s been all year). Stop loss at £4,780, price target of £4,420 (and the £3,900 if breached). Trailing stops from £4,620 onwards.

Short Platinum

Another with a trifecta of bearish signals, this time with platinum. Money Flow Index has recently been a good leading indicator on this commodity, and it’s made a bearish divergence on the price… so the underlying asset price needs to play catchup. Stochastics have been flirting with overbought levels and made a bearish divergence earlier in the week. Chaikin’s Oscillator has just commenced a bearish crossover, and MACD looks set to follow suit (although it hasn’t yet). Stops at $1,302, price target of $1,130.