September Dow Jones - Long from 8620 - Last price @ 9229 - New filings for jobless benefits fell sharply last week, supporting the optimistic view that the labor market and economy are beginning to stabilize. However, the positive news was not enough to hold up the market, now in its third week of a steep incline. Technically speaking, the Dow Jones futures have confirmed the July 27th to July 29th TC pattern (Trend continuation swing trade strategy) adding to a bullish posture and adding validation to the 9455 target objective in line with the next swing trade date--also known as a reversal date-of August 13. Continue to hold the long futures position and move the profit stop to 9075.
September Crude oil - Long from 67.35 - Last price @ 71.94 With oil supplies still abundant and the strong possibility that OPEC will keep current production unchanged in the September meeting, fundamentals may be weak, but the chart patterns and the reaction cycle are still strong and suggesting there is still more upside for the Crude. After the market dipped below the low of Tuesday's inside day, it recovered and closed above the high of the inside day's high. This is typically a bullish pattern that portends a continuation of the current trend. Crude has stalled at the overhead resistance, at the downward sloping parallel reaction line, but appears to be building energy for the next thrust into my initial target objective of 74.65, on or before the next swing trade date (reversal day) projected for August 11. Continue to hold the long position for 67.35, with a stop profit at 69.65.
December Gold - Long from $945.50 - Last price @ $966.90 - Gold reached another eight-week high after it traded above the high of the inside day formed during Wednesday's session. After testing the lower parallel line and Fib support on July 29th, Gold had traded sharply higher in the following four sessions and closed above the previous swing high ($962.70). This is enough to confirm the bullish TR pattern (a bullish swing trade strategy) and bullish leg into the next swing trade date (reversal date), projected for August 13. Hold the long position and keep the stop profit at $948.50.
September N-Gas - Long from 3.699 - N-gas gave back some earlier gains after a bearish weekly EIA storage report was released. It seems, even as producers express concerns about the gas glut, they have been reluctant to cut production, which means prices may take longer to recover. After N-Gas futures surged to a new 20-day high of 4.162 on Monday, it has since retraced 60% of the price swing that began from the July 29 swing pivot low. This was enough to reach the stop profit order and close the long position at 3.775.
September Coffee - Long from 126.35 - Last price @ 134.70 - A new TC pattern (swing trade strategy Trend continuation) was confirmed when Coffee hit the 134.15 trigger price. The new pattern adds another confirmation to the bullish reaction cycle into the next swing trade date, predicted for August 10, followed by August 14. Continue to hold the long position with the stop profit at 129.75 and a new target objective of 138.25. If you want to learn more about projecting future swing trade dates, also known as reversal dates, go to www.tradersnetwork.com/uwbook.
December Cotton - Earlier this week, the USDA increased its good to excellent crop rating from 46% to 50%. This report goes along with what I said a few days ago when I discussed the potential bearish TR swing pattern forming on the December Cotton chart. The market had been trading inside the 60% sell window all week, but finally broke out on Thursday. Cotton traded sharply lower and breeched the 61.50 trigger price needed to confirm the major TR pattern. If not already short, look to sell any pullback to 61.00 or higher, with the stop loss above the 63.20 swing high.
September Wheat -Wheat prices fell for the third straight day, as favorable weather boosts the spring crop in the northern U.S. Great Plains. However, I can't say the same for India. It seems the monsoon season in India has been a major bust, as rainfall is 50 percent below average and has delayed or destroyed crops in the eastern state of Bihar. To resolve the problem, farmers have asked their daughters to plow the fields naked in an effort to embarrass the weather gods into bringing the rain. While this rain-producing method does have its merits, I doubt it will catch on in the U.S. Technically, Wheat penetrated the prior swing low and closed at a new contract low. The price action has completed an A-B-C continuation pattern that typically appears in the center of a long-term cycle and suggests a downside move to the lower parallel reaction line, now sitting at $4.00. I'll wait for a two-to-three-day bounce to set up a bearish swing trade strategy pattern for entry.
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September T-Bonds - Treasury Bonds futures posted three-day lower closes and dipped into the 60% buy window before closing above the window, one day after the August 5th projected swing trade date. This is a bullish setup for a potentially bullish TR pattern (Trend reversal). Buy the T-Bonds at 117-26 stop, with a stop loss at 115-12.
September RBOB Gas - The strong upward trend paused after trading above the June 16 swing high price of 2.0585, where it posted two lower closes and formed a potentially bullish TC pattern under the upward sloping center line. A trade above 2.0855 will confirm the bullish swing pattern and trigger a new buy. A confirmation of the pattern would set up a price swing towards the target objective of 2.2000, on or before the August 17 swing trade date.
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Reversal Dates for the week of August 3 - August 7, 2009.
Monday- Soybeans, Soy meal, Gold, Eurocurrency
Wednesday- T-Notes, T-Bonds, S&P
Friday- N-gas, Cotton, CocoaHYPOTHETICAL 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)--(RDT =
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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.