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Novice traders look for perfection whereas experienced traders look for performance.
- Joe Kellogg |
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Today's Featured Article
December Dow Jones
- Foreign investors are benefiting from increased buying power due to the seven-month decline in the U.S. dollar. Investors are taking advantage of the situation by snapping up U.S. stocks at the cheapest valuations on record. This has supported the stock market and could continue to support the market as long as the attack on the U.S. dollar continues. On the technical side of the market, Dow Jones futures traded above the previous high by 19 points, before losing momentum and losing most of the daily gains. The loss of market momentum came on a projected reversal swing day and could be a precursor of things to come. However, the trend is still pointed higher and I would need to
see more of a pattern confirmation before suggesting the current rally is coming to an end. All the reversal swing day is suggesting at this time is that it is a good idea to tighten protective stops and keep a watch for a confirming reversal pattern.
 If you cannot view the Dow Chart, go here.
December Eurocurrency
- Central banks are currently sitting with record reserves, but they are increasingly snubbing the U.S. dollar in favor of euros and yen. The shift away from U.S dollars is further pressuring the greenback as it comes off its biggest two-quarter rout in the last 20 years. Friday's reversal swing day failed to traded above the prior day's high, but it did trade below the prior day's low, setting up a bullish trade "setup". Monday's "trail day" added to the bullish signal with a close higher than the opening price. The "trail day" can be a strong directional indicator, based on direction of the open and close of the trading day. Buy the Eurocurrency at 1,4825 stop, with the
protective stop at 1.4675.
 If you cannot view the Euro Chart,
go here.
December Japanese Yen
- As the US dollar continues to lose favor, the Yen continues to gain favor. The recent three-day correction found support at the 20-day SMA and quickly rebounded to closed near the high of the daily range. The separation form the low to the close is a positive indicator that the Yen has ended the corrective sell-off and is poised for a test of the recent high of 1.1386 from October 10. Buy the Japanese yen at 1.165 stop, with the stop loss at 1.1055.
 If you cannot view the Japanese Yen Chart,
go here. |
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November Crude Oil - I don't have a position in Crude oil right now, but I want one. However, I need to see a snapback to the 20-day SMA to provide a lower risk entry point, rather than just jumping on the Crude wagon. The market has just traded above the prior swing high -- 73.84 on October 12 -- so Crude could stage a short-term correction very soon and give us the trade "setup" to enter the Crude.
 If you cannot view the Crude Oil Chart,
go here.
November Heating Oil
- Long from 1.8495 - Heating oil surged out of the bullish TR swing pattern on Monday and closed above the (C) pivot high for the second day in a row. That is a positive indicator for heating oil to make a run for the short-term ascending reaction line target objective of 1.9700. Hold the long position, with the stop loss at 1.8495.
 If you cannot view the Heating Oil Chart,
go here.
In an active futures market, price patterns and signals are constantly changing. Because of this volatility, changes to recommended market positions listed in this report can change intra-day.
To learn more, sign up for my Swing Trading Report.
December Gold
- The surging Gold market paused with the last two day's entire trading ranges staying inside last Thursday's trading range. The market is overdone, but the upward trend remains intact. Gold could encounter one more push to the sloping reaction target objective of $1.070.00, the October 14th reversal swing day.
 If you cannot view the Gold Chart,
go here.
December Corn - Long from $3.43 - last price $3.81 1/4 - December corn closed up 19 cents after several northern Midwest states experienced snow, rain, and freezing temperatures over the weekend. December Corn breached the old high at $3.76 and closed above the ascending centerline. Hold the long position and raise the profit stop to $3.72.
 If you cannot view the Corn Chart,
go here. |
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REVERSAL DATES FOR THE WEEK of October 12 - 16, 2009
Monday -- Soybeans, Dow Jones
Tuesday -- Cattle, Hogs, Wheat
Wednesday -- Gold, Japanese Yen
Thursday -- British Pound
Friday
-- Wheat, Crude Oil Silver
If you have questions about swing trade recommendations, sign up for "The Scientific Trader," a 15-page electronic booklet about the Swing Trading Phenomenon. *Due to the volatility of the markets, all trade recommendations are subject to change without notice.
Swing trading and Reversal dates
Every good trading signal needs three key elements to be considered a successful signal. Time, Price and Pattern. When these three come together, great things can happen. If you can improve your timing or price entry, it can enhance any trading method. That is what the Reversal Dates can do for you. They will identify when the market should react, and at what price level the market needs to be for this to happen. They will even tell you what the market has to do to confirm the trade. The first thing I do is, identify Time.
TIME
The Reversal Date Indicator consists of three parts. The first is Time. This is identified by the projected Reversal date and will indicate which markets are ready to react and when the reaction should occur. The most common misconception about the Reversal dates is the idea that the market must reverse on every signal date, which is not true. Instead, The Reversal Date itself helps to identify the market's reaction. A high percentage of the time, the market will reverse the current trend, but not always. A smaller percentage of the time, the market will form a "continuation pattern," indicating the market will likely continue in the same direction as the prevailing trend. Often this
will occur during a consolidation or after a very small correction.
PRICE
Once the Reversal date has been identified, the next thing to do is monitor the price. If the market is making a new high/low, or if it is trading inside a buy/sell window, then the second component of a trade signal is in place. You now have Time and Price working together. For most traders, that will be enough, but the Reversal Date Indicator takes it one step further.
PATTERN
After extensive research into price patterns, I have identified specific price patterns, which occur during reversal timing. These patterns can be used to confirm the market reversals or market continuations. When, and only when, these three components are all working together, will there be a trade signal generated.
Traders Market Views is a product of Traders Network and all statements herein reflect Traders Network's market research. Traders Network and/or its principals, brokers and employees may or may not have established positions in part or all of the markets herein mentioned. It is possible that some of those positions, if any, are in direct conflict with the market commentary herewith.
THE RISK OF LOSS IN TRADING COMMODITY CONTRACTS CAN BE SUBSTANTIAL. YOU SHOULD, THEREFORE, CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER OR OVER-COMPENSATED FOR THE IMPACT IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT
ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES. |
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About the Author
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Joseph Kellogg started in the commodity business as a commercial grain merchandiser and basis trader. He was one of the architects of the Farm Marketing Program (FMP). This marketing plan was designed for agricultural businesses to use with grain options in strategies that could not only hedge their cash crops, but also aid in their marketing. He hosted "Futures Talk," a commodity talk radio program that aired bi-weekly on a Los Angeles radio station. Joseph has also developed many option writing strategies, which can be used with the reversal point method. |
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