December Dow Jones – U.S. stocks gained for a fifth day, as forecasts of increasing demand for oil boosted energy shares and jobless claims slid to the lowest level since July. Even as the market continues to climb, traders are being cautious after five straight days of gains. The S&P 500 has risen 52.8% in the last six-months, after hitting the low in March, without experiencing any significant correction. Thursday's high of 9572 came very close to taking out the prior high of 9576 that was posted on August 28 th . The prevailing trend continues to point higher and the market structure seems to say the trend will continue.
December Japanese yen –Long from 1.0880 – Last price @ 1.0908 – The two-day correction bottomed just above the 20-day SMA on September 8 th . This is where the market turned higher and closed above the prior three closes. Good follow-through buying on Wednesday confirmed the bullish reaction swing pattern and triggered the buy signal for a long position at 1.0880. The yen did reach a new six-month high, but was not able to hold the new high into the close. However, the yen pushed to another six-month high on Thursday. A close above the prior high would be positive price action and portend a new upward swing for the currency. Hold the long position, with the stop loss at 1.0825.
December Canadian dollar – Over the past four trading sessions, the Canadian dollar has formed a potentially bullish reaction swing pattern that, if confirmed, would be the final stage of a longer-term TR pattern. (The Trend Reversal pattern is a swing trading strategy pattern that appears at major highs/lows.) Thursday's low tested the 20-day SMA before turning higher and closing near the high of the daily range. Buy the Canadian dollar at 9315 stop, with a stop loss at 9075.
October RBOB gas – The RBOB has completed an A-B-C continuation pattern that typically appears in the center of a longer-term reaction cycle. The recent two-day correction began after hitting resistance at the 20-day SMA, following the September 4 th reversal date. This is a potentially bullish setup, but the market needs a trade above 1.8567 to confirm the swing trade pattern and timing signal to confirm the buy. Buy the RBOB gas at 1.8575 stop, with a stop loss at 1.7782.
November Crude oil - Oil prices posted a small gain on Thursday after a report showed that U.S. crude inventories dropped more than expected last week. Oil also got some support from a weaker U.S. dollar. Looking at the Crude oil chart, I see a large wedge formation building energy for a breakout. Although the Crude has not tipped its hand as to the next direction, I lean to the bullish side of the market. Typical market behavior is for a market to break out of a wedge formation in the same direction it was moving before forming the wedge…in this case, the direction is up. I'll continue to monitor the chart patterns and market structure for a confirming signal before entering a new position.
The most important element of a successful swing trading approach is market timing of entry and exits. In this session, you will learn to predict, identify and trade short-term swing trades in futures, using a unique swing trading market timing intelligence methodology based off the “Action/Reaction” theory.
December Hogs – Long from 47.62 – Last price @ 50.50 – Lean Hogs futures surged higher on plans for additional USDA pork purchases for government feeding programs. The early session surge to 52.22 met resistance at the upper reaction line and faded into the close. The market may go into a short-term consolidation phase before pushing higher. Hold the long position and raise the profit stop to 49.50 or exit at 51.50 or higher.
November Soybeans – Short from $9.79 – last price @ $ 9.26 ½ - Weakness in the U.S. Dollar and short-covering ahead of Friday's USDA report boosted the Soybeans during Thursday's session. However, November Soybeans faded late in the daily session and closed two cents lower. Wednesday's swing trade day (reversal day) ended as an “inside day,” suggesting a continuation of the prevailing downward trend. Hold the short position and keep the profit stop at $9.44.
December Gold – Despite signs that the economy may be making a slight recovery, the dollar remains weak and inflation fears are in the air, so investors are still looking for a reliable place to put their money. As long as investors continue to look for a safe-haven to preserve capital, gold will be supported over the long-term. On the other hand, we need to look at the short-term technical picture for a good entry. Overnight, Gold dipped to the 38.2% Fib retracement level at $983.20 before turning higher and closing at $995.30. This may have been the opportunity we were looking for, because it looks like the market has formed a bullish reaction swing pattern that suggests the Gold is poised for a run at the previous high of $1,009.70 and next high of $1,015.00 reached on February 20, 2009. Buy Gold at $1,001.00 stop, with the stop loss at $982.90.
Reversal Dates for the week of September 7 – September 11, 2009.
Wednesday – Soybeans, Canadian dollar
Thursday – Bean oil, Silver, Coffee
Friday – RBOB gas, Dow Jones, Eurocurrency, Australian dollar, Cocoa
• 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)
Swing trading and Reversal dates
Every good trading signal needs three key elements to be considered a successful swing-trading 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.
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.
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.
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 swing trade signal generated.
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