September Dow Jones – The Dow Jones futures closed lower for the third day, making this the longest losing streak since early July. The sell-off has found some support at the 20-day SMA and may manage one more rally into the September 9 th reversal date. However, I think the real damage has been done to the charts and any rally will be short-lived and should be considered an opportunity to exit longs or enter new short positions.
September Japanese yen –Long from 1.0710 – Last price @ 1.0773 – The Yen used Friday's inside day as a launching pad and traded to a new four-week high, posting the third close above the previous swing high (1.0707). This increases the probability of the market reaching the 1.0900 target objective on or before the September 3 rd swing trade date (reversal date). Hold the long position and raise the stop loss to 1.0625.
October Crude oil – Short from 69.75 – last price @ 68.14 - Crude traded on both sides of unchanged today, but the early session rally was stopped short at the 20-day EMA, but just high enough to fill the 69.75 sell. At this point, sellers took control and the market faded the rest of the day and accelerated to a new low at the close. Hold the short position, with the stop loss at 69.70 and a target objective of 67.45.
September Dollar Index – Long from 78.52 – Last price @ 78.77 – Finally a close over the 20-day SMA. Hold the long position and keep the stop loss at 77.80.
September Canadian dollar – Short from 91.55 – last price @ 9053 - The bearish TR pattern (a swing trade strategy that signals a major trend shift) was confirmed on August 28. Since I have already closed the first short position for a slight gain, I used a retest of the 20-day SMA for the second sell entry. Hold the short position and move the stop loss to 91.75. The market is set to trade lower into the September 7 reversal date, with a target objective of 89.00.
December Hogs – Long from 47.62 – Last price @ 47.15 – Hogs closed higher today, but they are not coming out of the swing pattern with as much momentum as I like to see with this type of pattern. It's time to tighten the stop and let the market show us its new hand. Move the protective stop to 45.55.
November Soybeans – Short from $9.79 – last price @ $ 9,58 ½ - November soybeans are trading lower, with favorable weather building expectations for a big harvest this fall. So far, fears of early cold weather are not showing in the forecasts. There are also concerns that Chinese state-owned firms may be allowed to walk away from money-losing commodity derivative trades.
Soybeans hit resistance at the upper downward sloping reaction line on Monday's reversal date. Early in Monday's session, the soybeans traded above Friday's high of $10.17 1/2 before the reversal kicked in, causing the market to collapse and trade below Friday's low, closing as an “outside day”. An “outside day”—on a projected swing trade date (reversal date)—is a reversal confirmation and sell signal. The reverse/forward count projects the next reversal date due on Sept 9, with a downside target objective of $8.50. Hold the short position with the stop loss at $9.85.
Reversal Dates for the week of August 31– September 4, 2009.
Monday – Soybeans
Wednesday – Cattle, Soy meal, Crude oil, Heating oil, Silver
Thursday – British pound, Japanese yen
Friday –Wheat, Bean oil, Dow Jones, Cocoa
• 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)
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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.
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