Market Update 8/5 - taking a look at Commodities, Emerging markets, and more... Volatility

 I've been up charting since early this morning, and the due diligence is already paying off, as I'm seeing significant chart patterns develop. And I even found the time to correct some of the grammatical errors discovered in the previous blog!  

First check out the pump n' dump pattern we saw in emerging markets (3X bear), on Monday. That was what felt like a little mini-crash in China? 

$EDZ (3X Bear) -  I'm going to call this a buy, ahead of the breakout above my pink line! China most likely pulls back along with Emerging markets, Keep in mind, this is a 3X leveraged fund, so adjust your risk accordingly. For example: If you normally risk 5% of your trading account on any certain trade, then only put 1.5% to work, and don't hold it for more than a few days - in a flat market - as these funds bleed value over time.  

China

$YINN (3X china) -  interesting Elliott Wave pattern, considering it's a leveraged ETF chart. Looks like a typical (panic) wave "e" throw-over beyond the end of the triangle pattern. I'm calling that the end of wave "A", in a much larger corrective pattern, but this rally could continue, into the end of the year, after the previous 5 months of selling. And notice how the financial networks didn't report on the China situation until this week's bullish reversal? Investors who trust the main steam media, to report the truth, never win.     

$BABA - Same pattern... and yes, I called the top - where you see my sell arrows. Saw a washout below the lower end of the triangle (in black), followed by a rally back above support (at my green line). It was a classic shakeout; just like the overshoot on the Emerging markets chart above, was a shakeout for the short sellers. The price action will probably consolidate at this level for a while, before testing resistance @ the 50 day moving average.  

Checking Commodities 

$CRB - continues to hold up above the 50 day moving average, but I'd keep a close eye on that, as it continues to chop into what looks like a classic topping pattern!  

Support on the $CRB is the area around 200 - 206, and I like the 180 level, on a pullback, but the price action could continue to chop into this broadening top for a while longer.  That could easily push the sell target out until the end of Oct. 

These are difficult Trades; Commodities, Emerging markets/China, but I go where-ever the volatility is. Volatility is a traders friend!  

Take care, AA 

Tweet