Success is where time, price, and pattern converge.

- Joe Kellogg

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June 5, 2007

June T-Notes -- We need to see a lower trade, possible to 105-26 before the buyers will be willing to step in. Perhaps a sell-off Tuesday could do it.

To view the June T-Notes chart, go here.

July Silver -- Month end rebalancing on the part of the index funds pushed Silver nearly to the 13.80 mark, but will it be able to hold those gains once the funds have completed their buying? I don’t think so. Although, my downside of 12.30 may need to be adjusted upward, I still look for a downside correction.

To view the July Silver chart, go here.

June Gold -- Will today’s high of $679.50 mark the high of this move? I believe it will. Our downside target is pegged at $645.40.

To view the June Gold chart, go here.

June British Pound -- Monday’s rally to 199.27 pushed the market up to the 1 X 1 Gann sell line. I’d expect the BP to work higher, now, into Thursday. Our downside target is 196.10.

To view the June British Pound chart, go here.

July Corn -- Despite Monday’s slight correction commodity funds remain firmly in control, and they’re long. This afternoon’s USDA crop report showed little change from last week, which is more bullish than anything. A steady to lower opening Tuesday is likely a buying opportunity.

To view the July Corn chart, go here.

July Sugar -- Last week I said, a dip to 9.06 should offer a buying opportunity. We hit that level Monday. I’d expect a steady to lower opening Tuesday followed by a rally.

July Coffee -- Ding! Ding! Ding! Coffee rallied just beyond our upside target of 118.10 Friday, topping at 118.40 before falling back. A test of the gap at 113.50 could offer another buying opportunity later this week.

To view the July Coffee chart, go here.

REVERSAL DATES FOR THE WEEK of June 4, 2007

MONDAY -- Soybeans, Silver
TUESDAY -- Hog, Soymeal, Euro currency, Cocoa, Coffee
WEDNESDAY -- Cattle
THURSDAY -- Corn
FRIDAY -- Crude

CURRENT RECOMMENDED POSITION

MARKETS TO WATCH:

JULY COFFEE -- The initial long position was closed on Friday with a nice gain when the market reached the 1^st target zone. However, the sharp rally peaked a little early, as the projected Reversal date is not due until Tuesday, June 5. This could mean Monday’s sell-off will lead to a trend continuation pattern instead of a major reversal. (A lower trade into the Reversal date will usually lead to a bullish reversal.) If this is the case, it will allow us to enter another long position at a lower price, in front of the continuation. -- Buy the July Coffee at 114.50 or lower with a protective stop at 111.50.

JULY SILVER -- When the bullish TR pattern was confirmed on May 29, we projected the next Reversal date for Monday 4. The Silver rallied over 60 cents during the following four trading days and is currently trading inside a sell window and is due for a reversal at this point. However, I do not expect to see a major reversal, but instead I believe the market could undergo a short-term correction to the 13.21 to 13.15 buy window, followed by another move higher. If you are currently long, either exit or adjust your stop accordingly. -- Buy the Silver at 13.20 or lower with a protective stop at 12.90.

JUNE BRITISH POUND -- The bullish TR pattern--confirmed on Monday--projects an upward price move into the June 12 Reversal date. The reverse/forward price projection suggests the market should reach as high as 2.0150 on or before the June 12^th date. -- Buy the June British pound at 1.9930 stop with a protective stop at 1.9725.

JUNE AUSTRALIAN DOLLAR -- The Aussie has formed a longer-term A-B-C continuation pattern over the past two months. The market is poised to break out of the pattern and begin the next major log of the ongoing bullish trend.

SEPTEMBER TREASURY BONDS -- The T-Bonds are trading below the center line, which means they should continue to drift lower into the June 11 Reversal date. However, the market is approaching the Reaction target line at 108-00, therefore it could be very near support with limited downside potential from here.

AUGUST GOLD -- The market rallied off a bullish TR pattern formed last week and closed above the 20-day SMA. I would expect a two or three day pullback to set up the next buy pattern.

OCTOBER SUGAR -- The recent bounce closed above the 20-day SMA for the first time since early March and appears to be confirming the last segment of a bullish TR pattern. If confirmed, the TR pattern would shift the trend from a long-term downward trend into a new bullish trend with potential to move significantly higher over the next few weeks. -- Buy the October Sugar at 9.50 stop with a protective stop at 8.95

*Due to the volatility of the markets, all trade recommendations are subject to change without notice.

How to use the Reversal Dates

Every good trading signal needs three key elements to be considered a successful 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.

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.

PRICE
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.

PATTERN
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 trade signal generated.

Traders Market Views is a product of Traders Network and all statements herein reflect Traders Network's market research. Traders Network and/or its principals, brokers and employees may or may not have established positions in part or all of the markets herein mentioned. It is possible that some of those positions, if any, are in direct conflict with the market commentary herewith.

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. 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.

Joseph Kellogg started in the commodity business as a commercial grain merchandiser and basis trader. He was one of the architects of the Farm Marketing Program (FMP). This marketing plan was designed for agricultural businesses to use with grain options in strategies that could not only hedge their cash crops, but also aid in their marketing. He hosted "Futures Talk," a commodity talk radio program that aired bi-weekly on a Los Angeles radio station. Joseph has also developed many option writing strategies, which can be used with the reversal point method.