Outlook for Jan 16, 2008

Let's look at a few markets.

1. Crude Oil DailyLooks like CL is setting up a swing low. Ideally, if it pushes through 86 level to run stops and head higher, I'll be all over. As you see we went just above 100 and now 91. This is exactly what pros do. They want people like me to feel fear. People were panic and bought Oil ETFs and oil stocks when CNBC talked about 100 on CL all over. Since then, about 10% drop! I bet people who over-leveraged are losing lots of money. Their stops are likely below that Dec low, which pros will look for before heading higher.

2. Wheat Daily

Above all grains, this wheat looks the best. Wheat is relatively thin, so it can be so explosive. If you can recall the run from May to Oct, about 80% gain in 5 months. We are not talking about stocks, but we're talking about commodities almost doubling its price in such a short period of time. Since then, it's been consolidation in its upper range. Grains usually move together, but I would say Wheat is a completely different animal. It can do whatever it wants. While I'm looking for a top in Corn and Soybeans, Wheat's gonna go $11 /b.

3. Gold Daily

Gold is due for a consolidation. Since mid Dec, this is the first time we see some weakness. Gold seems to respect 50EMA, so I'm looking forward to that, which is currently 832, but it'll come up as we just hang out here. Ideally, I would long around 845 level. I plan to buy futures and gold company like GG on my Roth IRA.

4. YM Daily

What can we say about this chart. Sell every rally I would say. Tons of stops under March low. Looks like we'll break 12,000 line giving people some panic. Our economy just doesn't look good at all. When markets are not good, it sells off of any news sometimes without any apparent reason. Remember, pros traders that I know love falling markets because things happen quickly and if you are right your reward is very high in a relatively short period.