REVERSAL DATES FOR THE WEEK of May 12, 2008 - May 16, 2008
MONDAY -- Soybeans, Soymeal, Bean Oil, Cocoa
TUESDAY -- Hogs, Corn, Silver, Gold
WEDNESDAY -- Cattle
THURSDAY -- British Pound
FRIDAY -- Euro Currency, Coffee
CURRENT RECOMMENDED POSITION
MARKETS TO WATCH:
1-JUNE AUSTRALIAN DOLLAR -- The trend is still up, but the market is moving away from the centerline, showing a loss of momentum, so the protective stop should be tightened to lock in more of the gains. -- Hold the long positions with the protective stop under .9300.
2-JULY COTTON -- The market has been moving higher, after posting a pivot low on the May 5 reversal date. Cotton never reached the lower median line target. Instead, it has moved away form the line, showing increasing strength and a possible shift away from the current downward trend. Although a bullish TR pattern has not formed yet, a two-day correction is all that is needed to complete the pattern and set up the buy signal.
3-JULY CORN -- Corn traded above $6.25 and triggered the buy signal a new bullish leg with a target at $6.75. It's a weather market and changes can happen quickly. - Hold the long with stops at $6.04.
4-JULY COCOA -- A possible bullish TR pattern is forming on the 20-day SMA. The market posted a double cross of the 20-day SMA early last week, setting up the bullish pattern. A trade above 2800 will set up a test of the 3000 level.
5-JULY SOYBEAN OIL -- The market has completed an A-B-C continuation pattern and is set to resume the upward trend. Friday's price surge overshot the 20-day SMA, so I look for a pullback on Monday and possibly Tuesday. This will form a new reaction swing and provide a trigger price for a long entry.
6-JULY SOYBEANS -- The Soybeans are completing a long-term TR pattern. A trade above $13.77 will confirm the pattern and trigger the buy signal.
7-JULY HOGS -- After spiking lower on May 5, Hogs have retraced over 60% of the price move. This puts the market inside the sell window and against the resistance line. A failure at this juncture will trigger a new round of heavy selling and mark the beginning of the next bearish leg.
8-JUNE TREASURY BONDS -- The T-Bonds have posted three lower lows, with the third low falling on the projected reversal date. The market has rebounded quickly off the third low and closed higher for the fourth consecutive higher close. Buy a pullback to 117-00.
9-JUNE JAPANESE YEN -- The market posted the lower close of the downward trend on the projected reversal date and the 161.8% Fib extension. Since then, the market has drifted away from the centerline and appears to be forming a bullish TR pattern. Friday's session closed above the 20-day SMA, while Monday's session pulled back and closed slightly below the SMA. This is typical market action and provides a buying opportunity. -- Buy the Japanese yen at 9775 stop, with a protective stop at 9600.
*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
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