7. Suppose that, for CME Live Cattle futures contract, a double top is formed wi

Question

7. Suppose that, for CME Live Cattle futures contract, a double top is formed with a pick at 130 cents/lb and a neck line at 117 cents/lb. If the formation of the double top is confirmed by a break of the neck line from above, a trader would profit target of aroundper pound. with a a. Buy; 13 cents b. Sell; 13 cents c. Buy; 47 cents d. Sell; 47 cents 8. Suppose that, for NYBOT Cotton futures contract, a head-and-shoulder bottom is formed with a bottom at 53 cents/lb and a neck line of 62 cents/lb. If the formation of the head and-shoulder bottom is confirmed by a penetration of the neck line from below, a trader would with a profit target of around per pound. a. Buy; 9 cents/lb b. Sell; 9 cents/lb c. Buy; 11 cents/lb d. Sell; 11 cents/lb 9. If prices are rising but volume and open interest are falling, money is thought to be the market reflecting aggressive and it is reasonable to assume that the bullish trend would a. flowing in; new long (buying); continue b. flowing in; new short (selling); continue c. flowing out of, short covering (buying); end soon d. flowing out of;, liquidating long positions (selling); end soon 10. If a trader with a long futures position offsets her position by selling the same number of and contracts to a trader with short futures position, the volume of trade open interest a. Increases; remains the same b. Decreases; remains the same c. Decreases; increases d. Increases; decreases

Explanation / Answer

7b) Sell, 13 cents (Target difference between neckline and top)

8a) Buy, 9 cents (Target difference between neckline and bottom)

9d) flowing out of; liquidating long positions (selling); end soon

10a) Increases, remains the same (Open interest does not change as no new positions has been created)

Related Questions

Navigate

• Browse (All)
• Browse 7
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.