September Dow Jones - The Dow Jones futures swung from up to down on the day over concerns of more credit losses and that commercial real estate may falter through 2010. However, I look at the Dow Jones chart and see that last Friday's swing trade date (reversal date) closed at a new high and at the top of the daily price range. Monday's session reached a new high, but failed to hold. The Dow Jones futures gave back all the daily gains, setting up a potential reversal pattern. This could mark the end of the upward trend, but I need to see a TR pattern (trend reversal) confirmation pattern before I think about taking ay position. Currently, I'm on the sidelines. The long positions held by the RT Swing Trader were closed at 9495www.reversaltracker.com
September Japanese yen - After reaching the downward sloping median line support on the August 6th 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 1.7010 will confirm the swing pattern and trigger a buy signal. - Buy the Japanese yen at 1.7010 stop with a stop loss under the swing pivot low.
October Crude oil - Long from 72.60 - Last price - 74.20 - In an ominous report released this morning, the API reported that if the House version of the climate bill becomes law, oil refiners could cut output by 25%, doubling U.S. reliance on imports over the next two decades. The report went on to say. A deep decline in U.S. refining activity would have a ripple effect throughout the economy, affecting jobs in sectors beyond the oil and gas industry. On the other, looking at current market action I see Crude oil is breaking out of a bullish TC pattern that projects a price move towards reaction line target objective of 84.00 where the upward sloping centerline is crossed buy the downward sloping reaction line. The market is currently testing the previous swing high of 75.27 posted on June 11. Hold the long position with the stop loss at 72.85. See the chart at www.tradersnetwork.com
September Corn - Long from $3.35 ¼ - Last trade @ $3.29 1/2 - Worries of an early frost and reduced yields caused by below average temperatures is supporting Corn today, currently trading 4 cents higher on the day. The market is retesting the 20-day SMA where it ran into trouble on Friday. Hold the long position, with the stop loss at $3.03.
December Coffee - Ample supplies and little threat of frost as pressured futures prices over the past 10 days. However, Coffee is quickly approaching the centerline support and the August 26th swing trade date (reversal date). It is time to put this market on you radar. A new pattern should begin to emerge and give us a hint of the next direction very soon.
October Heating oil -Technically, Heating oil tested support at the 20-day SMA trading down to 1.9000 on Friday before closing at 1.9270. This was an outside day following an inside day. This is a bullish pattern and allows the market to build up some energy for a potential thrust to new highs. - Buy October Heating oil at 1.9595 stop with a protective stop under the 20-day SMA.
December Gold - The rally that began on Friday failed on Monday as it tested the downward sloping reaction line. When Gold failed to trade above Friday's high speculators rushed for the exit causing the market to fall sharply and close below the 20-day SMA. This show me a double cross pattern with a negative close, indicating there can me move downside pressure into the August 31st 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 $958.50.
December Cocoa - Long from 2925 - Last price - 2926 - Recent Cocoa grinding figures and difficultly with transporting crops to market do appear to favor the bullish side of the market, however seasonally, this is a slow time of the year. On the other hand, the charts appear to be building a bullish pattern that could trigger a strong thrust at any time. Hold the long position with the stop loss at 2873.
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Reversal Dates for the week of August 24 - August 28, 2009.
Monday - Soybean oil
Tuesday - Cocoa
Wednesday - Soy meal, Heating oil, S&P, Coffee
Thursday - Cocoa, Gold, Eurocurrency
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)
For daily updates on current Reversal date recommended trades, go to www.tradersnetwork.com