December Dow Jones – Dow Jones futures reached the descending reaction line target objective at 9795 before turning lower. The Dow Jones reached this new high one day after the projected reversal swing day. Traders are becoming concerned that the rally has outpaced prospects for earnings growth may be overdone, even with recent evidence of the recovering economy. Thursday is considered the “trail day” (the day after a projected reversal day) and can be a key directional indicator, depending on the direction of the closing price versus the opening price, but today's “trail day” closed in the neutral zone, so the Dow would have to trade below the reversal swing date low of 9594 to confirm the reversal and trigger a sell. Sell the Dow Jones at 9589, with stop loss above the pivot high.
December Dollar Index – The future looks bleak for the dollar. The market has broken out of a descending pattern and formed a three-day reaction swing pattern below resistance and has confirmed a TC pattern. The next TC pattern suggests the Dollar will continue to decline into the September 29 reversal swing date.
The shrinking dollar has replaced the Japanese yen as a favorite for the “carry trade” as investors borrow the greenback at near-record-low interest rates and sell those dollars for foreign currencies, to take advantage of higher rates overseas. Interest rates between Japan and the U.S. are very comparable right now, but for much of the past 20 years, the yen has been the funding currency of choice. Sell the Dollar index at 76.20 stop, with a stop loss at 77.28.
December British pound – The BP is forming a bullish swing pattern between the descending reaction line and the 20-day SMA. The market needs to trade a little lower to reach the 60% buy window (1.6362) and test the ascending action line. I would prefer to see the market test these two areas of support before turning higher.
December Canadian dollar –Long from .9315 – last price @ .9390 – Canada's dollar appreciated to the highest since October, on speculation that the global recession is ending and it will boost the world's appetite, which will support the commodity-based currency. Canadian dollar rallied after testing the 20-day SMA support at .9150 on September 14 th . The market rebounded off support and triggered the buy signal, while confirming the bullish TR pattern. Today's second consecutive close above the (C) pivot high is a positive indicator for higher prices in the near future. Hold the long position and move the stop loss to 9325.
November Crude oil – Wednesday's DOE report showed a decline in crude oil stocks and triggered a rally into Thursday. Now U.S. asphalt producers are expecting to see more declines in supply, based on expected asphalt demand increase, as federal stimulus money filters down to road-paving projects. Looking at the chart, I see Crude oil finding support at the lower parallel action line and rebounding sharply over the last three trading sessions. The market is moving out of a longer-term 5-wave continuation pattern that suggests higher prices over the next few weeks. Buy Crude oil 71.55 or lower, with the stop loss at 68.95.
November Soybeans – This is why I look at chart patterns, market structure and market behavior for trade signals and not rely on weather reports. It was just two days ago—Tuesday morning—when Soybeans opened sharply higher and rallied over 60-cents higher, based on a weather forecast of possible freezing temperatures on the Mid-West next week. It just so happens, based on market structure and the action/reaction lines, I recommended closing out the short Soybeans position on Monday. This move saved a lot of market misery, as we were able to stand aside as the whole grain complex surged higher. Well, today the forecast was changed and the possibility of a freeze was removed as a near term weather threat. Soybeans drifted today as the market consolidates and waits for a new direction. I will stand aside and wait for a pattern confirmation before recommending a new position.
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December Gold – Long from $1,001.00 – last price @ $1,014.50 – Gold lost momentum after trading above the February 20 th high of $1,015.00. This is typical market action, after taking out a significant high. Gold will most likely retrace or consolidate for a few days before resuming the upward trend. Hold the long position and raise the stop loss to $1,010.00.
December Corn – There is a possible bullish TR pattern setting up in the December Corn. After Tuesday's rally, the market has settled back over the past two days and formed a possible reaction swing pattern. The retracement has stopped at the 20-day SMA, but so far has come up short of reaching the 60% buy window at $3.19.1/2. I will wait to see if the market can dip into the 60% window before entering any buy recommendation. However, if the market trades at $3.19 ½ or lower, enter the order to buy December Corn at $3.41 ½ stop, with a protective stop under the swing low.
December Silver – Silver traded to a new high early in Thursday's session, but the market met strong resistance at the convergence of the descending reaction line and the ascending centerline. Silver reached the target objective before the projected reversal swing date, so a decline into the September 22 reversal swing date is possible.
Reversal Dates for the week of September 14 – September 18, 2009.
Monday –RBOB gas, Heating oil, Gold
Tuesday – Canadian dollar
Wednesday – Wheat, T-Bonds, S&P
Thursday – Corn, Coffee
Friday – Hogs, Japanese yen
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 SIMILAR TO THOSE SHOWN. 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.
• 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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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