CommodityTrends Weekly Newsletter

Previously I wrote: "If July Oats can close below the lower boundary of its large triangle pattern, it would trigger a downside entry. That said, the daily chart 50% level sits just beneath the triangle, so ideally I’d like to see price close below that level as well before considering a short entry. If a short entry is triggered, the initial target will be the gold weekly chart support level at 317-0."

Two week's I wrote: "An entry was triggered to the downside on April 20. The initial stop loss can be placed above the April 17 high. The initial target is the gold weekly chart support level at 317-0."

The stop would likely have been triggered on May 04.

Jul Soybean Oil made a new potential #1 top point at 76.99 (the high on May 05), which is also near the midddle of the upper monthly chart resistance zone. Keep watching to see if all of the 1-2-3 strategy criteria are met.

Jun Natural Gas developed a #1 bottom point at 2.592 (the low on April 30). The #2 point is 2.883 (the high on May 4). The #3 point is 2.676 (the low on May 7). A break above the #2 point would trigger an entry to the upside. The initial stop loss can be placed just below the #3 point. The initial target is just below the top of the purple monthly chart zone. You can see this illustrated in the sample risk/reward box I’ve drawn on the chart. Please keep in mind, this is only an example.

It is important to note that price is currently trading inside a purple monthly chart support zone.

However, the #2 point is sitting just below two weekly chart resistance levels, marked by the gold horizontal lines. That area could create a fairly strong ceiling for the market. Because of that, price may have some trouble pushing through this area without a strong breakout move.

Jun Live Cattle has developed a #1 top point at 256.625 (the high May 1). The #2 point is 246.925 (the low on May 7). Keep watching to see if all of the 1-2-3 strategy criteria are met.

Jul Cotton #2 has developed a #1 top point at 84.90 (the high on May 5). The #2 point is 81.90 (the low on May 7). Keep watching to see if all of the 1-2-3 strategy criteria are met.

One thing to note is that I generally prefer to see more candlesticks between the points. As it stands right now, there is only one candle between the #1 and #2 points. Generally speaking, the more time there is between each point, the more mature the formation becomes, which often gives the pattern a better chance of reversing the prior uptrend.

May Class III Milk continues trading in a large consolidation pattern. I'll stop watching this market for now. If an opportunity develops, I'll do my best to display it both here and/or on my Daily video.

Grayscale Bitcoin Trust ETF (GBTC) triggered an MET entry to the upside on May 4 and then ran up to fill the gap (blue rectangle). Last week I wrote. . . "Also notice the gap just above the potential breakout point. Since gaps often have a tendency to get filled, it will be interesting to see how price reacts if it reaches that area of the chart."

Once the gap was filled, price reversed and is now trading back near the original entry trigger level.

Strategy Inc. (MSTR) also triggered an MET entry to the upside. (See the circled high.)

Last week I wrote. . . "Just above the trigger point is a wick that formed on January 14. Wicks can often act like magnets and pull price toward them, so keep a close eye on that price zone."

Sure enough, just as with the gap on the GBTC chart, price filled in the wick on MSTR. Since then, price has pulled back leaving behind another possible entry level--the May 5 high. A break of this level will trigger another MET entry to the upside.

Well, as with any trading approach, it does not work all the time.

Last week I wrote, “Dutch Bros Inc Cl A (BROS) is also on the verge of triggering an MET entry to the upside. A break of the April 27 high will trigger the entry.”

Price did trigger that entry on May 6. However, the very next day, price gapped sharply lower and should have triggered the stop-loss. This type of price action is a good reminder that even solid-looking setups can fail, which is exactly why risk management always has to come first!