September Dow JonesThe Dow Jones futures gave back over 340 points during the two-day correction before finding support at the 20-day SMA. This may actually help the market because it was overdone and needed a correction to relieve the overbought situation. The long-term cycle is still bullish with a target objective at the upward sloping reaction line, currently at 10880. Currently waiting for new pattern.
October Crude oil - After a sharp price drop on Friday and Monday, Crude oil bounced off the upward sloping action line support and closed above the prior two closes. The market is in a critical juncture, as the price action is a little cloudy as to the next direction. Many traders will be waiting for the release of weekly data from the EIA Wednesday morning to see if stocks continue to build and demand remains weak. On the hand, oil traders continued to monitor Hurricane Bill, the first of this year's season, in case it could disrupt Gulf of Mexico oil and gas production.
A bearish TR pattern was confirmed during Friday's collapse with a minor swing trade date for Wednesday and the major swing trade date projected for September 2. A break of the parallel action line will trigger a secondary sell and project a drop to 60.00 or lower, as the market approaches the September 2 reversal date. Sell Crude oil at 67.87 stop, with a stop loss above the daily high.
The El Nino weather cycles have been affecting markets for centuries and they continue to this day. It was reported today that an El Nino weather anomaly is forming in the Pacific and may strengthen with enough potential to unleash droughts and floods, endangering agricultural commodities worldwide and imperiling agriculture-reliant countries against the backdrop of economic recession.
September Corn - Long from $3.35 ¼ - Last trade @ $3.14 1/2 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 @ 1.4126 - 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 - Swing pattern failed to follow through and retraced enough to trigger 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
October RBOB gas - Two higher closes at the 20-day SMA has formed a bearish swing pattern with a trigger price at 1.7835. A break below the trigger price will confirm the sell signal, as well as the longer-term TR pattern. Sell RBOB gas at 1.7835 stop, with a stop loss above the swing pivot high.
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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)
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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