December Dow Jones - Dow Jones futures fell for a third day as stronger-than-expected demand in a Treasury auction and an unexpected drop in consumer confidence has investors questioning the strength of the economy recovery. The Dow Jones did finally find support on the upward trending lower parallel line and 20-day SMA as well as closing lower on the projected reversal swing date. This can be a bullish setup for a short-term reversal and possible buy signal.
December British pound - Long from 1.6425 - Last price @ 1.6356 - The British pound was the strongest of all the major currencies today and managed to be the only one closing in positive territory. Currently, the pound is trading at the cheapest level against the euro in a decade. However, the price action over the past two the consolidation pattern appears to have formed a longer-term 5-wave continuation pattern, similar to the pattern formed in Crude oil before the latest rally. If confirmed, the continuation pattern portends a new bullish leg that could send the pound up to 1.8500. -Hold the long position with the stop loss at 1.6105.
In an active futures market, price patterns and signals are constantly changing. Because of this volatility, changes to recommended market positions can change intra-day.
December Gold -Short from $1,048.00 - Hit the Target! - The short position was closed at the target objective of $1,035.00 for a nice gain. I will continue to monitor the market for a new signal.
December Soybean oil - Long from 35.59 -The long position was closed at 37.05 for a nice gain. The market is now in the fourth day of a correction and nearing support. I will stand aside to see if a new pattern forms at this level.
December Soybean meal -Long from $301.80 - The long position was closed at 289.00 stronger dollar pressured the market and pushed it below the 20-day MA support. However, the market appears to be forming a possible continuation pattern and could be setting up for another run higher. If Soy meal rebounds and trades above Tuesday's high (297.00) it would confirm the swing pattern failure to the downside. This type of price action can be followed by a significant move in the opposite direction. - Buy the Soy meal at 297.50 stop with a stop loss under the swing low.
November Soybeans - Long from $10.13 ½ - The long position was closed at $9.75. It is time to begin watching the January Soybeans due to 1st notice day for the November contract.
December Copper - Long from 288.75 -Copper traded lower on the reversal swing day, setting up another potential bullish leg. If confirmed, Copper could continue its upward climb towards the descending reaction line target objective. The current long position was closed at 298.25 for a very nice gain. Due to the new bullish swing pattern I recommend having an order waiting in case the pattern is confirmed. - Buy Copper at 307.10 stop with a stop loss under the reversal day low.
December Cotton - Long from 65.60 - A stronger U.S Dollar continued to pressure cotton towards support at the 20-day MA. The longer-term trend is still bullish and a test of the 20-day MA could allow the market to reset for another leg higher. The long position was closed at 66.25 for a small gain.
December Wheat - Long from $5.29 ¾ - Heavy selling pressure continued to push wheat lower. The market has reached potential support at the 20-day EXP MA and the descending median (center) line. I'll wait to see if this support will hold before taking another step into this market. The long position was closed at $5.12.
December Lean Hogs - Long from 54.30 - last price @ 55.42 - Hogs surged to a new three-month high as it confirms a new reaction swing pattern. - Hold the long position with the stop loss at 53.25.
March Sugar - Sugar is in the final stage of completing a 5-wave continuation pattern. If you are not familiar with this pattern you can see that same type of pattern in the Heating oil and Crude oil, just before the latest rally. The current pullback could reach the 60% buy window (22.55) before turning higher. Even with the pullback, the market is still within the parameters of the bullish pattern. - Buy Sugar at 23.55 stop with the stop loss below the pivot low.
December Crude oil - A bullish TC pattern (trend continuation) pattern has formed at the crossing point of the descending reaction line and the ascending median line. The market closed lower on Monday's projected reversal swing day forming a possible bullish setup. - Buy Crude oil at 81.85 stop with the stop loss at 79.75.
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Reversal Dates for the week of October 26- October 30, 2009.
Monday - Sugar
Tuesday - Copper, S&P, Dow Jones, Japanese yen
Wednesday - N-gas, Cocoa
Thursday - Hogs, Silver, Eurocurrency
Friday - Corn, Crude oil, Cotton
- 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.