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- Joe Kellogg |
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Today's Featured Article
March Dow Jones (e-mini)
- Short from 10,599 - last price @ 10,588 - Dow Jones futures traded higher into the January 14th reversal swing and reached the sloping reaction line target objective, after a slightly higher open the following day. This price action completed the bullish cycle as the Dow Jones reversed and tumbled over 170 points from the high. The sell signal was confirmed during the drop. - Hold the short position with the stop loss at 10,682
 If you cannot view the Dow Chart,
go here.
March Treasury Bonds
- Long from 117-05 - last price @ 117-13 - Treasuries futures continue to be supported by speculation that the Federal Reserve will continue to keep interest rates near zero. This caused traders to speculate that demand for the 30-year bond will remain high. Technically, the T-Bonds continued the upward trend, triggered by the bullish TR swing pattern formed between December 28 and January 8. - Hold the long position with the stop loss at 115-20. The next reversal swing date I due on January 29.
 If you cannot view the T-Bonds 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.
March Eurocurrency - The euro fell to a one-week low against the dollar during Friday's session amid concerns about Greece's deteriorating public finances. Looking at the daily chart I see a choppy five-wave continuation pattern confirmed by Friday's price action. This pattern suggests the euro is set for another downward leg to complete the bearish cycle into next reversal swing day due on January 26, followed the major reversal swing date projected on February 5. The initial downside target objective is 1.3950 followed by 1.3725. I will have updated entry signals in the next issue of TMV Swing Trade report.
 If you cannot view the Euro Chart,
go here.
March British Pound
- After the British pound reached the initial target to close the long position last Thursday, I said I would wait for a pullback for another buying opportunity. That pullback occurred on Friday and has provided another bullish "setup". Since the longer-term cycle remains bullish into January 27th, with a target objective at 1.6800, there is still opportunity on the long side. - Buy the BP at 1.6350 stop with a stop loss at 1.6202.
 If you cannot view the British Pound Chart,
go here.
February Gold
- Long from $1139.50 - last price @ $1133.90 - Gold trading slightly higher on Monday due to concern about the soundness of Greece's public finances. Gold continued to find support near Friday's low and the 20-day EMA as well as the lower ascending parallel line. If the support holds and Gold can trade above $1147.00, it would trigger a new round of technical buying allowing Gold to continue toward the upper target objective. - Hold the long position, with the stop loss at $1117.50.
 If you cannot view the Gold Chart,
go here.
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March Sugar - Short from 27.35 - last price @ 27.62 - Originally, I was looking for sugar to trade lower into the January 14th reversal swing date, but the market bounced off the 20-day SMA and traded higher into the date instead. This price action set up a bearish TR pattern off the January 7th double top. - Hold the short position with the stop loss at 28.42.
 If you cannot view the Sugar Chart,
go here.
March Cotton - Short from 72.40 - last price @ 72.08 - Cotton futures resumed the downward trend after a two-day pause at the 20-day SMA. Cotton is under pressure, due to mounting concern that a slower economic recovery may erode U.S. demand for the fiber. Hold the short position, with the stop loss at 74.35.
 If you cannot view the Cotton Chart,
go here.
March Coffee - Coffee has formed a bullish reaction swing above the 20-day SMA. A confirmation of the pattern would portend a second bullish leg, as well as a test of the prior high at 149.50. Buy Coffee at 145.10 stop, with a stop loss below the latest pivot low.
 If you cannot view the Coffee Chart,
go here.
March Soybean - Grain futures tumbled on Tuesday, after the Department of Agriculture raised the 2009 crop estimates to a record high. Soybeans rebounded on Wednesday and closed as an "inside day". This has set up a short-term swing trade opportunity. Sell Soybeans at $9.69 1/2 stop, with the stop loss at $9.94 1/2 and a target objective of $9.39.
 If you cannot view the Soybeans Chart,
go here.
March Wheat - After Tuesday's price collapse, wheat bounced off the descending median line support. The next crossing of the median line at $5.18 triggered sell signal and a continuation of the downward trend, with a target objective at the lower parallel line.
 If you cannot view the Wheat Chart,
go here.
February N-Gas (e-mini) - The market is completing a bearish TR pattern, after the failed swing pattern that led to a peg-leg top on January 7. Thursday high reached the 60% sell window, but closed lower. Sell the N-gas at 5.420 stop, with a stop loss at 5.810.
 To view the Natural Gas 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 January 18-22, 2010
Monday -- Soybean, Soy Meal
Tuesday -- Cattle, T-Notes, T-Bonds
Wednesday -- Wheat
Thursday -- Hogs, Japanese Yen
Friday --
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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Special Message from Our Author
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