REVERSAL DATES FOR THE WEEK of January 14, 2008
MONDAY -- S&P
TUESDAY -- Cattle, Wheat, Soymeal, British Pound
WEDNESDAY -- Crude, Cotton, Coffee
THURSDAY -- Hogs
FRIDAY -- Gold, Notes, Bonds
CURRENT RECOMMENDED POSITION
MARKETS TO WATCH:
1-MARCH WHEAT -- Monday’s higher close is the second higher close of the January 10th low. This is enough to trigger the buy signal and confirm a major TR pattern (Trend Reversal) that completes the A-B-C continuation, suggesting a run at the $11.00. Any correction will be very short-term, but should be considered a buying opportunity.
2-MARCH CANADIAN DOLLAR -- The "Reversal Tracker" is currently holding three short positions from 1.0095, 1.0056 and .9958 and recommends holding. The CD has been trading inside the buy window (9935 -- 9850) over the past four days. However, since the market is inside the buy window it says that you need to be alert for a possible trend change. So, if you are currently short, hold the short positions with stops at 9956. However, a trade above 9956 will confirm a new TR pattern (Trend Reversal) and trigger a buy signal.
3-MARCH EUROCURRENCY -- The long position continues to be in good shape. The target remains 1.5100 with the next reversal date due on January 24th.
4-MARCH DOW JONES -- For the last couple of weeks I had been saying hold on to short positions because the market should trade lower into the January 11 reversal date. Now that the market did trade lower into the reversal date, it is time to start looking for a rebound in the Dow. If short it is time to tighten the stops or step out and bank some nice gains.
5-MARCH JAPANESE YEN -- The initial price surge began on December 27 and didn’t slow down until the market reached the center line target six days later. Since then the Yen has formed a new reaction swing and the last segment of the TR pattern sequence. If confirmed, the TR pattern would suggest much higher prices in the Yen. A trade above 9370 would confirm the buy signal and the TR pattern.
6-MARCH COFFEE -- This market has had some confusing charts patterns over the past several weeks, but the chart is beginning to make some sense. I see a potential bullish swing pattern developing that could propel the market to new highs. A trade above the recent pivot high 137.00 is needed to confirm the buy pattern. Once filled, the pattern would project a run at the October 12th high of 144.10.
7-FEBRUARY GOLD -- The "Reversal Tracker" triggered its first buy signal on January 8, followed by a second on January 10. The two signals were based off TC patterns (Trend Continuation) that suggested the trend would continue into new all-time high territory. On the other hand, the bullish Reaction cycle is approaching the end of the Fwd A count indicating the cycle is coming to an end and there could be slow down in the current trend. This could result in a short-term correction or a price consolidation at these levels.
*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.
