March 10, 2009

REVERSAL DATES FOR THE WEEK of March 9th - 13th

MONDAY -- Cattle, Soybean Oil, Dow, British Pound, Australian Dollar
TUESDAY -- Crude, Unleaded Gas
WEDNESDAY -- Corn, Wheat
THURSDAY -- Soymeal, Bonds, Cocoa, Coffee
FRIDAY --

CURRENT RECOMMENDED POSITION

MARKETS TO WATCH:

1-MAY SOYBEAN MEAL - Short from 259.50 - TC - 265.50 - The confluence of the long-term and short-term centerline as well as the reaction target line, in conjunction with the March 12th reversal date, indicates the end is near for the current bearish cycle. Soy meal may see one more spike low to test the weak side of the reaction line to establish the (B) of a bullish TR pattern before the reversal date, but this will be a signal the low is in and it is time to look for a place to get long the Soy meal. -- I recommend using any trade below 260.00 as an opportunity to exit short positions and wait for a new pattern to develop. I will keep you updated on the situation on the daily updated worksheets. -- Keep the current protective stop at 277.50.

2-MAY COFFEE - Short from 110.50 - TC - 106.30 - So far we missed our target by just a few points, as the market stalled short of the centerline. The two-day corrective bounce has moved higher into the projected reversal date, so it could be setting up another bearish swing pattern and continuation of the downward move. -- Hold the short position and move the protective stop to 110.25, with a 104.25 target.

3-APRIL CRUDE OIL - Long from 4452 - TC - 4712 - After trading sideways to lower -- more sideways than lower -- since early December, Crude oil has finally formed a bullish TR pattern (Trend Reversal) and triggered a buy signal. -- Hold the long position, with a protective stop at 4525.

4-APRIL RBOB GAS - The February 26th high was followed by two lower closes on the following Friday and Monday. This pullback was right into Tuesday's (March 3rd) projected reversal date. Tuesday began with the market dipping slightly below Monday's low, before turning higher and closing near the high of the daily range. This has set up a potentially bullish TR pattern and a possible trend shift. -- Buy the RBOB at 139.05 stop, with a protective stop at 127.50.

5-MARCH JAPANESE YEN - Short from 101.27 - TC - 101.22 - It is beginning to look like a failed pattern, therefore I will look for a place to reverse. -- For now, hold the short position, with a protective stop at 103.30.

6-MAY COPPER - Long from 168.50 - TC - 164.30 - After forming a basing pattern since early November, Copper formed a small TR pattern and triggered a buy on Wednesday. Hold the long position, with a protective stop at 151.50.

7-APRIL GOLD - While the long-term cycle remains bullish, the shorter-term cycle is suggesting the current correction will continue. April Gold just missed reaching the $1,025 target projected from the December 31st through January 15th A-B-C continuation pattern when it peaked at $1,007.70 on February 20th. The correction that followed found support at the lower reaction line -- 902.00 -- and posted two higher closes. However, the two-day rally was cut short by the 20-day SMA, where the market began the sharp sell off on Monday, forming a potential bearish reaction swing. A confirmation of this pattern -- a trade below $899.50 -- is needed to confirm a sell signal and trigger another downward swing into the next reversal date projected for March 18th.

8-APRIL CATTLE - Monday's projected reversal date traded below the previous low and found support on the lower reaction line. It didn't take long for the reversal date pattern to take hold, as the market quickly turned higher and posted a bullish close. The market has formed a bullish Peg-leg pattern that typically appears at significant tops or bottoms. It looks like it is time to consider buying Cattle.

9-MAY SILVER - Silver traded slightly beyond the upper reaction target on February 20th when it peaked at $14.61. The market reversed the following day and pulled back to the lower reaction line on March 3. A three-day rally ended at the 20-day SMA on the March 6th reversal date. The market appears to be forming a bearish reaction swing inside a longer-term zigzag continuation pattern. A trade below $12.40 will confirm the bearish reaction and trigger a sell-off into the next reversal date, projected for March 17. This could push the Silver as low at $11.50 before finding support.

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*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.