STOCK MARKET

Commentary: It was a volatile week on Wall Street; the markets started out strong, gave it all back and then ultimately finishing close to where they started. The week began with a bounce that carried into Wednesday before a sell off on Thursday that spilled over into Friday. After breaking down to new August lows on most of the major indexes, the markets finished the week with some late-day buying that erased most of Friday's declines. In the end, the markets did little to clear up the picture and left traders wondering whether they are close to breaking down or providing a buying opportunity. IN PICTURES: 7 Tools Of The Trade The S&P 500, as represented by the S&P 500 SPDRS (NYSE:SPY) ETF, remains in an interesting position in which two scenarios are developing that are at polar odds with each other. The first is the idea that a very large head-and-shoulders top has been forming over the past year and that the markets are getting ready to embark on a new down leg that could end up heading to much lower levels. This scenario would become much more plausible on a break of the July lows. The second scenario, which is occurring on a much shorter time frame, is the idea that a tradable low is forming in this area and that the markets are simply consolidating the 2009 rally. The price action that began in late May through the present time is also taking on the shape of an inverse head and shoulders and is in direct conflict with the idea that a much larger topping pattern is close to completion. The neckline for this pattern is near $113 and a break above this level would solidify the odds that this scenario will occur. The markets could really head in either direction at this point, and traders need to be patient as the move could be explosive in either direction. Source: StockCharts.com   The price action in the Diamonds Trust, Series 1 (NYSE:DIA) ETF, which tracks the Dow Jones Industrial Average, is presenting a very similar pattern on longer time frames, although the shorter time frames are revealing more strength. DIA set a higher high earlier this month, which was an important milestone, but the quick failure at this level is calling that accomplishment into question. DIA remained in a pattern of higher highs and higher lows over the past few weeks and only a close below the $100 level will break this pattern. This will be the first level to watch in the near term, at which point the July lows near $95 could be the bottom of a much larger base. Source: StockCharts.com   The Powershares QQQ ETF (Nasdaq:QQQQ) actually showed a little strength this week by holding above last week's lows. This was the only one of the major index ETFs that managed this feat, and it could be giving bulls a glimmer of hope that the markets will hold these levels. It’s always a positive thing when leadership comes from the tech stocks and QQQQ has been showing relative weakness recently. The picture still looks weak overall, and QQQQ will need to clear its August high near $47 before the picture can truly turn more positive. Source: StockCharts.com   The Russell 2000, as represented by the iShares Russell 2000 Index (NYSE:IWM), is the other index that bulls would like to see assume a leadership role. Unfortunately, IWM continues to lag the markets. IWM is the only index currently testing its mid-July pivot low near $60, although Friday's close revealed some buyers waiting at this level. Critical support remains near $58 and a break below this level will be the place where many participants will throw in the towel. Source: StockCharts.com   The Bottom Line The markets are truly in a position where a large move can occur in either direction. There are many mixed signals as well, making it even more difficult to get a read on price action. Traders need to remain patient and keep a watchful eye on some clearly defined levels. Just beneath current price action is a clearly defined support level that has held over the past year. Just above price action is a price level that has acted as resistance over the past two months. Clearing either of these two ranges will begin to stack the odds in a trader's favor, but until then, traders are probably better served relaxing as the summer winds down.  Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Have a Great Day! By Joey Fundora Joey Fundora is an independent trader located in South Florida. Joey focuses on using technical analysis techniques to uncover supply and demand imbalances in equities. To see more of his work, visit his site on Stock Chart Analysis. At the time of writing Joey Fundora did not own shares in any of the companies mentioned in this article.

DISCLAIMER ChartAdvisor is not a registered Investment Adviser or a Broker/Dealer. The trading of securities may not be suitable for all potential users of the Service. You should be aware of the risks inherent in the stock market. Past performance does not guarantee or imply future success. You cannot assume that profits or gains will be realized. The purchase of securities discussed by the Service may result in the loss of some or all of any investment made. We recommend that you consult a stockbroker or financial advisor before buying or selling securities, or making any investment decisions. You assume the entire cost and risk of any investing and/or trading you choose to undertake.

Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.

Farmers will need to grow more food in the next 50 years than they did in the previous 10,000 years combined. Why?

Because the world’s population is skyrocketing. Every second of every day, five people are born and two die. The result is like populating a new city the size of Los Angeles every two weeks.

Read on to find out how we can target gains of 90% or more from this trend.

The world is getting crowded

We’re not guessing at the numbers. We know how many people are alive today. And we know the average birth rates and death rates of every country.

Here’s what the population growth chart looks like:

The latest studies show world population will reach 7 billion next year. Just 12 years after we reached 6 billion. When will we hit 8 billion? Probably by 2024, but it might be sooner.

The population explosion is one of the powerful long-term trends we’ve identified in Sound Profits.

More mouths to feed

A growing population means the world needs to grow more food.

But there’s a problem. The world doesn’t have unlimited acreage for crops. In fact, the amount of arable land is actually declining.

China, for example, has 20% of the world’s people. But only 7% of the world’s arable land. It has been losing 1,400 square miles of farmland to the desert every year. And large tracts have been lost to industrialization.

Not only that but developing countries are getting wealthier. And when people get wealthier, they tend to consume more protein. Higher meat consumption puts additional pressure on grain supplies.

This powerful macro trend of a growing, increasingly wealthy world population and the effect it has on the global food supply is here to stay. And you can profit from it.

How to play a hungrier world for big gains

The simplest way to invest in this trend is with a grain ETF. That gives you direct exposure to the global food supply. The iPath DJ-AIG Grains Sub-Index Total Return ETN (JJG) is a good choice. Its portfolio is unleveraged. It reflects returns available on futures contracts in three grains. Currently, the mix is 40% soybeans, 35% corn, and 24% wheat.

As of June 30th, JJG was down 17%. But since July 1st, it has moved from $33.78 to $37.25, breaking out of its 50-day moving average.

And as you can see from the following chart, JJG is miles below its June 2008 high of $74.00. A move back to its high would give investors today a gain of more than 90%.

Are you worried about reckless government stimulus programs – and not just here in the U.S.? Owning grains is a decent inflation hedge.

Hungrier world play #2

As I said, the world doesn’t have an endless supply of arable land. And a growing and wealthier population means we need to make the land devoted to agriculture more productive. One way to do that is with better seed technology.

In Sound Profits, we’ve identified a leader in genetically modified seeds. Its stock is trading at a big discount to its 2008 high. We think fair value for this stock is 80% higher than it is today.

Hungrier world play #3

Yet another way to play this powerful long-term trend is to buy companies that produce fertilizer.

Typically, these aren’t stocks you want to buy and hold, because their prices can be so volatile. Our own Steve MacDonald has been in and out of a major fertilizer producer three times in the past year. And Sound Profits readers have racked up big profits following Steve’s advice. I urge you to subscribe and take advantage of this stock’s next big move.

And by subscribing right now, you can get my free report on another commodity – one that’s poised to pay you 10-14 times more than gold. That’s right. 10 to 14 times more than gold. For details, click here.

Source : feedback@investorsdailyedge.com

Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.

Bullish measured move or measured move up is a continuation chart pattern which starts as a reversal pattern. This is a three phased formation which forms over several months. The 3 phases of bullish measured move are reversal advance phase, consolidation/correction phase and continuation advance phase.


The requirements of a bullish measured chart pattern include,
 

• The pattern should form at the end of a strong downtrend.
• The reversal advance phase starts near an established low and lasts for a few weeks to many months. The upward price increase should be orderly; usually forming a price channel. If this uptrend is greatly curved, then the validity of the pattern is greatly challenged.
• The consolidation/correction phase occurs after an extended uptrend. The correction can be up to 63% of the reversal advance. Consolidation patterns such as rectangle chart pattern and ascending triangle or correction patterns such as falling wedge or sloping flag formations should occur at the end of this phase.
• The continuation advance phase usually matches the slope of the first phase.
• The volume should increase at the beginning of both advance phases and should decrease at the end of the consolidation phase.

With bullish measured move, traders can go long at the confirmation of breakout of consolidation/correction phase. Traders should use appropriate price target suiting the continuation pattern at the end of the consolidation phase.

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Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.

Bearish measured move or measured move down is a three phased continuation chart pattern. The pattern starts as reversal of an existing uptrend but is considered as continuation pattern as the pattern is only confirmed after the second phase. The 3 phases of bearish measured move are reversal decline phase, consolidation/retracement phase and continuation decline phase.


The requirements of bearish measured move pattern include,
 

• The pattern should begin at the top/end of a strong uptrend.
• The reversal decline phase starts near a high. The downward price decline should be pretty orderly; usually breaking a major support and forming a price channel. This phase lasts from a few weeks to many months. If the price is greatly curved, then the validity of the pattern is challenged.
• The consolidation/retracement phase follows the first phase. If it is a price retracement, it can be up to 67% of the first phase. Consolidation patterns such as rectangle chart pattern and descending triangle or retracement patterns such as rising wedge, bearish flag and bearish pennant formations should occur at the end of this phase.
• The continuation decline phase should (almost) match the slope of the first phase.
• Volume confirmation is no so important. Generally, the volume should increase at the beginning of both decline phases and should decrease at the end of the retracement phase.

With bearish measured move pattern, traders can go short at the confirmation of breakout of consolidation/retracement phase. Traders should use appropriate price target suiting the continuation pattern at the end of the consolidation phase.

NobleTrading.com Offers Online Stock Trading, Online Options Trading,
Online Futures Trading, Online Forex Trading
Worldwide Brokerage Service, Day Trading Brokerage

Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.

Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell.