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- Joe Kellogg |
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Today's Featured Article
December Dow Jones - Short from 10360 - last price @ 10378 -
December Dow Jones futures reached a new yearly high on the projected reversal
swing date December 2. On Thursday's "trail day", the Dow Jones reached the new
high and reversed just below the descending reaction line target objective. The
Dow Jones futures ended the session as an "outside day" with a lower close.
This is a negative pattern and could mark the beginning of a significant
correction. Hold the short position, with the stop loss at 10442.
If you cannot view the Dow Chart,
go here.
December E-mini S&P - Short from 1099.25 - exit price @
1117.25 - The "outside day" pattern was quickly negated by the Unemployment
report on Friday. Soon after the release of the report, the S&P rallied to
a high of 1119.00, closing the short positions. However, before the end of the
trading day, the ES had given back all the gains and dipped into negative
territory, before short covering lifted the market at the close. The December
2nd reversal swing date remains valid and is still working in conjunction with
the descending reaction line resistance to turn this market lower. I'll wait
for a new pattern setup before making a new recommendation. It the ES is unable
to break to a new high, we could see a substantial correction begin very soon.
If you cannot view the E-Mini S&P Chart,
go here. December Japanese Yen - Traders are growing leery of the yen
after efforts by Japanese officials to boost the world's second-biggest economy
led to the currency's biggest weekly decline in a decade. The yen did manage a
slight rebound on Monday, following the three-day meltdown. This is typical
market behavior after a very wide range, like the one posted in the yen on
Friday. I look for one or two more narrow range days before the yen can resume
the downward price swing. However, the market could experience heavy overhead
resistance at the 1.1256 levels.
If you cannot view the Japanese Yen Chart,
go here. December Eurocurrency - Short from 1.4995 - last price @
1.4809 - Friday's sell-off occurred after the Yen tested the descending
parallel line on Thursday and left good separation. I look for a one or two-day
corrective rally before the market resumes the downward trend toward the median
line target objective. Hold the short position, with the stop loss at 1.4975
and a target objective of 1.4705.
If you cannot view the Euro Chart,
go here. December British Pound - Short from1.6720 -last price @
1.6439 - The BP rebounded slightly after Friday's meltdown. However, the cycle
is still bearish, so I look for the downward pressure to resume on Tuesday or
Wednesday. The market could try to trade higher into the December 9th reversal
swing date, but that would set up another selling opportunity. For now, hold
the short position, with the stop loss at 1.6695.
If you cannot view the British Pound Chart,
go here.
In an active futures market, price patterns and signals are
constantly changing. Because of this volatility, changes to recommended market
positions can change intra-day. To learn more about intra-day changes sign up
for our booklet about the Swing Trading Phenomenon. |
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| January Orange Juice - Long from 118.50 - last price @
126.50 - Orange juice futures jumped to a 16 month high on mounting concern that
Florida's orange crop will be smaller than the U.S. government forecast. OJ
continues to move with the bullish cycle after breaking out of the 5-wave
continuation pattern in late November. The cycle should remain bullish into the
next projected reversal swing date, due on December 17. Hold the long position
and move the stop to 121.20, with a target objective of 130.25.
To view the OJ Chart,
go here. December Cattle - Short from 83.40 - Exit price @ 81.00 - In
the last update, I posted a chart that showed the market reaching the sloping
reaction line target objective and recommended exiting at the market to bank
the gains and wait for the next pattern to develop. The trade was closed at
81.00 a nice gain.
To view the Cattle Chart,
go here. March Coffee - Long from 142.75 - last price @ 146.60 - In
the last update, I said the resistance from the three-point trend line would
only be a temporary pause for the Coffee and could offer a new buying
opportunity on any pullback. Friday's active session did see the Coffee pull
back to the 20-day SMA, but the market quickly resumed the upward trend on
Monday...closing 465 points higher and above the trend line resistance. The
market is poised to reach the sloping reaction line target objective of 153.00
on or before the next reversal swing date on December 14th. Hold the long
position and move the stop loss up to 142.75, with a target objective of
153.00.
To view the Coffee Chart,
go here. March Wheat - The secondary rally failed at the descending
parallel line and closed with good separation between the parallel line and the
close on December 1st. This failure turned the momentum to the downside, as
March Wheat continued lower over the next five sessions and broke below the
prior swing low of $5.52. This is the final segment of a bearish TR swing
pattern and portends lower prices into the next reversal swing date on December
18. Sell Wheat at $5.51 or higher, with the stop loss at $5.75.
To view the Wheat Chart,
go here.
March Silver - Silver reached the lower parallel line and
the 20-day SMA on Monday and seemed to find support. The cycle should remain
bullish into the December 17th to December 23rd time period. (This coincides
with the two projected reversal swing dates.) A trade above Monday's high would
confirm a "double cross" and trigger a buy signal at 18.60 stop. If filled, use
17.85 as the stop loss.
To view the Silver Chart,
go here.
January Heating Oil - Monday's lower close set up a
potential bullish reaction swing. This pattern is the last segment of the
longer-term TR swing pattern that can signal a significant trend shift. In this
case, it would mark the end of the five-week congestion pattern and the
beginning of a bullish upward swing. Buy the Heating oil at 2.0485 stop, with a
stop loss at 1.9950.
To view the Heating Oil Chart,
go here. Want to learn more about intra-day changes and swing trade
recommendations? Go here. |
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REVERSAL DATES FOR THE WEEK of November 9-13, 2009
Monday -- Canadian Dollar, Swiss Franc, Cocoa
Tuesday -- T-Bonds, Japanese Yen, Coffee
Wednesday -- Soymeal, Heating Oil, S&P, Dow Jones,
Eurocurrency, British Pound, Australian Dollar
Thursday -- Crude Oil
Friday -- Hogs 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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