September Dow Jones - Even as the stock market was pushing higher, it was said to be the steepest rally since the 1930s, the world's biggest pension funds were showing their loss of confidence in stocks by cutting their holdings or leaving them unchanged. Meanwhile, the Dow Jones sold off as investors become concerned the global economy isn't expanding fast enough to justify a steep rally and began to step aside. On the other hand, foreign demand for long-term U.S. financial assets rebounded in June, even though China and Russia trimmed their holdings. The price decline was enough to trigger the stop loss at 9155 to close the second long for a loss. We had a good run on the long side, but now the pattern suggests it is a good time to stand aside until a new swing trade pattern confirms.
October Crude oil -Thursday's failure at the downward sloping reaction line waved a red flag and warned that Crude oil lacked the momentum to continue the upward trend. It also set up a potential bearish TR pattern with a trigger price at 71.80. The trigger price was hit during Friday's session and Crude fell over $2.00 before the session ended. The sell-off continued on Monday until Crude found some support at the upward sloping (blue) action line. The trend in Crude has shifted, but we could see a one or two-day bounce before the downward slide continues. Any bounce should be considered a selling opportunity. The TR pattern projects a minor reversal date for August 18th, followed by the major reversal date of September 2. The initial target objective is 64.25.
December Cotton - Long from 64.20 - Cotton reached a new high on August 13th, but failed to carry through. Traders were quick to rush to the sidelines and Cotton dropped through the stop loss at 63.55 to close the long position.
September Corn - Long from $3.35 ¼ - Last trade @ $3.14 ¼ - After a seven-week downward slide, Corn bottomed on July 22nd, just shy of the downward sloping parallel line. Corn then rallied off the swing low and quickly reached the down sloping median line, where it reversed and resumed the downward trend. The market finally stopped inside the 60% buy window, where it closed as an outside day before trading higher and triggering the buy signal. Hold the long position, with the stop loss at $3.03.
November Soybeans -Soybeans reached a new high on August 13th, but could not find any new buyers. The market failed to hold gains and closed on the daily low. This was a swing pattern failure and the market continued to show weakness throughout Friday's session, closing the long position for a loss. Soybeans continued the collapse into Monday, but finally found support at the upward sloping action line. I will wait to see if Soybeans bounce off the support to form a new bearish pattern for a new signal.
September Eurocurrency - Short from 1.4190 - Last price @ 1.4085 - The three-day rebound pushed September Eurocurrency futures into the 60% sell window, where it retested the new downward sloping parallel reaction line. As mentioned in the last issue, the September EU did form a bearish TR pattern and subsequently triggered the sell signal during Monday's session. Hold the short position, with a stop loss at 1.4185. The first target objective is 1.3850. www.reversaltracker.com/blogs
September British Pound - Short from 1.6385 - Last price @ 1.6343 - The pound posted its biggest loss in over two months after it was reported that during the month of August, asking prices from U.K home sellers dropped by the biggest amount this year. Sellers took charge and pushed the British pound through the sell trigger price of 1.6385 to confirm the bearish TR pattern I talked about last week. The TR pattern typically forms at major turning points in the market and signals a significant trend shift. The reverse/forward count projects a minor reversal date for August 19, followed by the major reversal date of September 3. The initial target objective is 1.6183. Hold the short position, with the stop loss at 1.6525.
September Dollar Index - The September Dollar index has completed the long-term bearish reaction cycle and appears to be forming a bullish TR pattern. The TR pattern (Trend reversal) typically forms at major highs or lows. The Dollar index posted a swing low on August 5th, followed by a three-day rally into August 10, where it formed a swing high slightly above the 20-day. From this high, the market has pulled back to the 60% buy window on August 13, before it traded out of the buy window and closed above the 20-day SMA on August 14. Buy the Dollar index at 79.55 stop, with a stop loss at 78.25.
September Coffee - Take a look at this coffee chart. The reaction cycle unfolded perfectly between July 10 and August 10. Time and Price met on the August 10 reversal date right at the upward sloping centerline. Since then, Coffee has fallen over $1.40 and is coming up on another potential reversal date on August 18th. The market is trading inside the buy zone, but hasn't given a buy pattern yet, but I'll keep watching. www.reversaltracker.com/blogs
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Reversal Dates for the week of August 17 - August 21, 2009.
Monday- Hogs, Unleaded gas, Eurocurrency, Cocoa
Tuesday- Corn, T-Notes, T-Bonds, Coffee
Wednesday- British pound
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)
For daily updates on current Reversal date recommended trades, go to www.tradersnetwork.com
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.
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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