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TMV for August 26th, 2009
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September Dow Jones – U.S. Stocks pushed higher on news that President Obama gave his approval for Ben Bernanke to stay on a second term as the Chairman of the Federal Reserve. It was also supported by news that the Conference Board said that its index of consumer confidence increased from 47.4 to 54.1 in August. That was better than expected. Thirdly, the S&P/Case-Shiller index of home prices in 20 cities was up 1.4% in June, the second month of gain. However, even with the two-month increase, the index is down 45% from its peak in 2006.
The Dow Jones futures has reached a new high on the August 21 st reversal date and closed at the high of the daily range. Typically, this is a reversal pattern set up, but the confirming pattern did not appear on the trail day (the day following the projected reversal date.) Instead, the market closed higher than the opening price, suggesting a continuation of the current trend. Based on the TC-pattern projections, the Dow Jones futures should continue to trade the reaction line target objective (red line), as it approaches the next reversal date projected for September 9.
September Japanese yen – After reaching the downward sloping median line support on the August 6 th reversal swing date, the market reversed and began to trade up to the downward sloping reaction line. As mentioned in the last issue, the Yen did run into resistance at this line and responded with three lower closes, with Monday’s low testing the 20-day SMA. This price action has formed a potential bullish reaction swing and TR pattern, following a 5-wave continuation pattern. A trade above 1.0710 will confirm the swing pattern and trigger a buy signal. Buy the Japanese yen at 1.0710 stop, with a stop loss under the swing pivot low.
October Crude Oil – Long from 72.60 – Oil prices fell more than 2 percent in a matter of a few minutes after a new report from Washington, projecting a whopping $7 trillion U.S. deficit for the next decade. Crude tested the $75.00 a barrel level minutes before the nonpartisan Congressional Budget Office released its deficit forecast. As soon as the report was released, Crude quickly reversed and dropped below the swing low, triggering the 72.85 profit stop to close the long position for a small gain.
September Corn – Long from $3.35 ¼ - Last trade @ $3.21 1/2 – It was only yesterday that traders were buying corn futures due to worries of an early frost and reduced yields, caused by below average temperatures. One day later, corm is under pressure, as traders get news of improving crop conditions and the forecast of good weather next week. It is hard to keep up, that is why you need to learn about market behavior and let the market tell you what is coming in the future. And right now, it is saying the market reached resistance at the 20-day SMA today and was turned lower. It could retest the prior low, and if it does, it will most likely continue lower. Therefore, tighten the stop loss to $3.14.
December Coffee –Ample supplies and little threat of frost have pressured futures prices over the past 10 days. However, Coffee is quickly approaching the centerline support and the August 26 th swing trade date (reversal date). It is time to put this market on your radar. A new pattern should begin to emerge and give us a hint of the next direction very soon.
December Gold – Gold rose, as some investors judged yesterday’s 1.2 percent drop to be a buying opportunity and as a weaker dollar early in the session. But, the Dollar began to strengthen later in the session and Gold faded. I think the pattern in Gold is negative and the market is poised to move lower over the short-term. Yesterday, I talked about the double cross pattern on the 20-day SMA as a negative pattern. The market attempted to push above the 20-day SMA again on Tuesday, but failed to close above it for the second day in a row. I still look at this as a negative pattern and Gold should continue to move into the August 31 st reversal date. A trade below the swing low will confirm a bearish TC pattern and portend a drop to the $896.00 target objective. Sell Gold at $931.10 stop, with a stop loss at $958.50.
December Cocoa – Long from 2925 – Last price – 3008 – December Cocoa prices reached their highest price in over a year, after an industry group stated that global demand will exceed supplies. Also, r ecent Cocoa grinding figures and difficulty with transporting crops to market is also supporting the bullish side of the market. Hold the long position and move the stop loss to 2895.
September Dollar Index – The Dollar index tested the lower parallel action line for the third time in as many days. Each time, the support has held and today’s close had good separation from the action line. This is positive price action, suggesting buyers were entering the market at the close. Buy the Dollar index at 78.52 stop, with a stop loss at 77.80
September Canadian dollar – The recent corrective rally stopped inside the sell window (9235 – 9390) and reversed on Tuesday. Sell the Canadian dollar at 9198 stop, with a stop loss at 9341.
September Silver – Silver has been climbing along the lower parallel action line and forming a potential bearish reaction swing at the same time. A trade below 13.69 would confirm the reaction swing and the longer-term TR pattern. This would trigger a new down swing into the September 2 nd reversal date, with a target objective of 12.25. Sell Silver at 13.68 stop, with a stop loss above the prior swing high.
If you have questions on any of the swing trade recommendations, call me at 800-521-0705 or email at [email protected]. For updates throughout the day, you can go to www.reversaltracker.com/blog or www.tradersnetwork.com.
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REVERSAL DATES FOR THE WEEK of August 24th, 2009
Tuesday – Cocoa
Wednesday – Soy meal, Heating oil, S&P, Coffee
Thursday – Cocoa, Gold, Eurocurrency
Friday –
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MARKETS TO WATCH:
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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) (RD = Reversal date) -- (RL= Reaction line) -- (L = long) -- (S = Short) -- (TC = Today’s closing price) -- (RLT = Reaction line target) – (TR = Trend Reversal) –(TR = Trend Reversal) – (TC = Trend Continuation)
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
P.S. If you would like us to cover a market that we’re not currently covering, or should you wish to be taken off this e-mail newsletter, e-mail me at [email protected] or give us a call at 1-800-521-0705
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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