REVERSAL DATES FOR THE WEEK of March 10, 2008
MONDAY -- Soymeal, Silver, Bonds, Canadian Dollar
TUESDAY -- Cattle, Hogs, Heating Oil, Sugar, Coffee
WEDNESDAY -- Crude, Notes, Australian Dollar
THURSDAY -- Corn, Wheat, Soybeans, British Pound, J-Yen
FRIDAY -- Bean Oil
CURRENT RECOMMENDED POSITION
MARKETS TO WATCH:
1-APRIL CRUDE OIL -- Crude oil hit the target price and is currently trading between the 138.2% and 161.8% Fib projections levels with two days left before the projected reversal date (March 12th). This should mark the end of the bullish reaction cycle and set up a possible correction. Wait for the pattern confirmation before entering a new position.
2-JUNE T-BONDS -- The TR pattern confirmed the bullish reversal on February 28th and the market staged a quick rally to 118-31 on March 3rd. The subsequent three-day correction has formed a TC pattern that projects the next leg could test the reaction line target at 121-00 on or before the March 14 reversal date.
3-JUNE JAPANESE YEN -- The Yen has a very interesting pattern unfolding. First of all, the market did surpass the previous high (.9801) to confirm the TC pattern and the buy signal on Friday. The Yen continued to trade higher, reaching over 100 points above the entry -- peaking at .9909 -- before settling back to .9796. We need to keep a close eye on this pattern, as it could turn out to be a failed swing pattern and trigger a sell signal in the opposite direction. The market needs to stay above .9665 to remain bullish, with a target price of 1.0056.
4-JUNE CANADIAN DOLLAR -- The CD rallied early in the trading session, but reversed and closed below yesterday's low. This looks negative on the chart and could be setting up for a sell. A trade below .9999 would be enough to trigger the sell signal.
5-JUNE BRITISH POUND -- Hold the long position - The BP finished strong and closed above the centerline. This pattern is building energy for another run at the sloping Reaction line -- currently projecting a target range of 2.0100 and 2.0200.
6-JUNE 10-YEAR NOTES -- The T-Notes traded through the 117-18 trigger price on Friday, and confirmed the buy pattern. Hold the long position with the stops under 116-10.
7-MAY SOYBEANS -- After five days of heavy selling, the Soybeans are now trading off limit-down. The market has overextended to the downside and is overdue for a corrective rebound. Typical market behavior would suggest the market should retest the previous high before a real trend reversal can take place. This means the Soybeans should trade back to the $14.94 level before finally turning lower. Since Friday is the projected reversal date, Monday should mark the beginning of the corrective rebound. As soon as a new reaction swing is confirmed, I will be giving you the next reversal date.
8-APRIL CATTLE -- Cattle have reached the reaction line target area, one day before the projected reversal date (Tuesday, March 10th). This suggests the downside is limited and the market is ready for a reversal. It is time to exit short positions or adjust protective stops. A new low on Tuesday's reversal date will set up a potential bullish reversal.
9-MAY COFFEE -- After peaking at $171.90 on February 29, Coffee has retraced slightly more that 60% of the earlier price move. This puts the Coffee inside the buy window on the projected reversal date (March 11th). Monday's inside day is a resting date and sets up the potential reversal pattern. I look for a new low on Tuesday, followed by a bullish reversal. Be ready to cover short positions and/or enter long positions on a pattern confirmation.
*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.
