TMV For Mar 24, 2006 |
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MARKET SCOOP - Joe Kellogg
Market Scoop commentary is a longer-term look at the markets and is based on our technical book: Trading from the Inside
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REVERSAL DATES - John Crane
The Reversal day commentary is a shorter-term look at the markets and is based on our technical book: Advanced Swing Trading.
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MARKET SCOOP |
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June T-Notes
The market had expected the existing home sales for February to drop for the 6 th consecutive month. They did not. Instead, sales were higher and the market took that as a bullish sign for the economy. Tomorrow, the government will release its new home sales data. It’ll be lower than expected—causing the market to take more of a bearish stance. Is it me, or are we chasing our tails? Tuesday is the next FOMC meeting. Sometime after a quarter past 2:00 ET that day, Bernanke will announce a .25% hike to 4.75%. Not only has the market already factored in Tuesday’s hike, but May’s hike as well. In fact, at current levels, the market is anticipating a rate of 5.0%. So, where do we go from here? I believe the market is at the bottom end of its trading range. Our upside target is 108-05.
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June Dow
The market has been climbing along the 2 X 1 Gann line, a trend it’s not likely to continue. A correction is likely, possibly to 11225, over the next couple of weeks.
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June Euro
Tuesday night I said, “Look for key Gann support at 120.92.” The market hit that area and kept dropping. February’s stronger than expected existing home sales were the cause. Traders, of course, are thinking this means the real estate market is turning hot again, indicating interest rates will go much higher. But think about this: are we witnessing a resurgence of the real estate bull or have consumers shifted to the lower priced ‘previously owned’ homes? I’m guessing the latter. My hunch is, tomorrow’s new home sales number will be disappointing for the bulls. A break above 122.65 should kick in additional buy programs. Adjust upside targets to 124.30.
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June Dollar
Talk of Tuesday’s upcoming FOMC meeting is dominating the market. Most expect the Fed to bump rates ¼ of a point to 4.75%. In fact, the market has already factored in an additional hike in May to 5.0%, so any comments coming from Tuesday’s meeting will be analyzed closely. Early this week, I projected the dollar would top around 89.20. It did not. Currently, the market is at 90.08. Still, I believe we’re near the top. Technically, Gann resistance is at 90.22.
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June Australian Dollar
The market has spent the week attempting to recover from last weekend’s cyclone. Not considering Monday’s action, we’ve traded mostly sideways this week. As I’ve said earlier, I believe the market has overreacted and the Australian dollar will rebound. Our upside target is pegged at 74.83.
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June Canadian Dollar
When crude rallies strongly, the Canadian Dollar will often follow, but not today. It certainly is primed, I think, and Friday could be a big day. In the last issue, I said, “A break above 86.65 Wednesday or Thursday should signal additional buy signals.” The buy orders were not hit—the market didn’t rally, but the bullish pattern remains. For Friday, move the buy area moves to 86.28.
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May Soybeans
At long last, tomorrow is the day I’ve been projecting soybeans would rally. Keep your fingers crossed!
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July Coffee
There’s been little fundamental news to support this market. Without a steady diet of bullish news, markets generally fade, which is what’s happening here. Still, I believe coffee is poised to rally—hopefully, we’ll see it next week.
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June Gold
Earlier this morning, silver had been lower, but word that the first silver-backed security is moving closer to final US regulatory approval sparked another sharp rally. The move help gold reverse its tracks as well, but nothing like silver. The spread between gold and silver is narrowing. It’s odd to see gold lag behind silver, but as long as these index funds continue favoring silver, the trend will continue.
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May Sugar
Tuesday I said, “A break below 16.40 should spell trouble for bulls and push the market lower.” But the market never traded lower than 16.52, so the sell signals were not hit.
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REVERSAL DATES - markets to watch |
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REVERSAL DATES FOR THE WEEK of March 20, 2006
MONDAY – Cocoa, Yen
TUESDAY – Coffee, Gold, Heating Oil, Crude
WEDNESDAY – British Pound, Unleaded Gas
THURSDAY – Cotton, Australian Dollar, Bonds
FRIDAY – |
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John will be out of the office until Monday March 27 th, and will not update this section until then.
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Due to the volatility of the markets all trade suggestions are subject to change, at anytime during market hours, without notice. *
(TERMS YOU NEED TO KNOW) (SAL=- Sloping Action Line) --( SRL =Sloping Reaction Line) --( RD = Reversal Date) -- (L= Long) --- (S= Short) -- ( TC = Today's closing price)--(RDT =
For daily updates on current Reversal date recommended trades, go to www.tradersnetwork.com
How to use the 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. For more information on our Reversal Date Indicator, or should you have a specific market question, please call us at 1-800-521-0705
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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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