REVERSAL DATES FOR THE WEEK of August 13, 2007
MONDAY -- Soybeans, Unleaded Gas
TUESDAY -- Cattle, Crude, Dow
WEDNESDAY -- Corn, Soybeans, Notes, Bonds
THURSDAY -- Hogs, Wheat, Bean Meal, Canadian Dollar, Australian Dollar, J-Yen
FRIDAY -- Bean Oil, Euro Currency
CURRENT RECOMMENDED POSITION
MARKETS TO WATCH:
SEPTEMBER SWISS FRANC -- After a strong breakout last Friday, the Swiss franc has drifted lower, where it finally met support at today’s low (8361). Typically, a strong market will continue in the direction of the breakout, but the Swiss Franc failed to do so and turned lower. Failed swing patterns can lead to powerful moves in the opposite direction, so do not disregard the Swiss Franc as a potential trade. I would like to see a minor two or three-day correction to identify a low pivot and set up a sell signal.
SEPTEMBER CORN -- The support at the 20-day MA held as Corn shook off a negative report and closed higher. This price action portends a test of the July 13th high of $3.57. -- Buy the Corn at $3.44 stop, with a protective stop at $3.32.
SEPTEMBER AUSTRALIAN DOLLAR -- Today’s close is below the (C) pivot low and is enough to confirm the TR pattern. This is a large TR pattern and suggests a significant change in the trend and portends a drop into the Reaction line target on or before the August 16 reversal date. -- Sell the Aussie dollar at 8390 stop, with a protective stop at 8487.
SEPTEMBER CANADIAN DOLLAR -- Wednesday’s high (9567) entered the sell window, but quickly reversed and turned lower. The TR pattern has not confirmed yet, but it only needs a trade below Thursday’s low (9403) to confirm the pattern and trigger a sell. If confirmed, the reverse\forward count projects a quick but potentially sharp sell-off into the August 16 reversal date. -- Sell the 9401 stop, with a protective stop at 9557.
SEPTEMBER JAPANESE YEN -- The Japanese yen has been in a sideways consolidation pattern over the past two weeks. The highest close in the pattern fell on the reversal date projected by the TR pattern that unfolded between July 2 and July 7. This suggests a TC pattern may be forming and should be followed by a test of the long-term Reaction line target of 8800. -- Buy the Japanese yen at 8575 with the protective stop at 8450.
NOVEMBER SOYBEANS -- Hot and dry weather may be pushing the Soybeans higher, but the market is approaching the sell window -- that begins at $9.03 -- in conjunction with the projected reversal date (8/15). This could end the recent correction and set up a significant selling opportunity. Wednesday and Thursday are critical days for this setup, so you should keep in touch with the Reversal Date Worksheet every afternoon for a recommendation.
SEPTEMBER WHEAT -- Wheat reached the $6.80 target level on August 9, the reversal date projected from the June 26 to July 3 TC pattern. This marks the end of the cycle and the possible beginning of a new action/reaction cycle. We’ll wait for a TR pattern to form and set up the next major move in the Wheat.
*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.
