May 12, 2009

REVERSAL DATES FOR THE WEEK of May 11th-15th, 2009

MONDAY -- Soybeans, Soy Meal, Australian Dollar
TUESDAY --
WEDNESDAY -- Corn
THURSDAY -- Cattle, Unleaded Gas, Heating Oil, British Pound
FRIDAY -- Canadian Dollar

CURRENT RECOMMENDED POSITION

MARKETS TO WATCH:

1-JUNE GOLD - Long from $904.50 - TC - $914.30 - Gold continues to consolidate at support. -- Hold the long position and move the protective stop to $895.50.

2-JULY SILVER - Long from $12.85 - TC - $ 13.96 - Friday's reversal date closed as an inside day, suggesting a possible continuation of the upward trend, followed by a bullish trail pattern. -- Hold the long position and move the protective stop to $13.55.

3-JULY CORN - Long from $4.15 3/4 - TC - $ 4.21 - The pattern remains bullish, as traders await the Planting Progress Report due to be released Monday afternoon. -- Hold the long position and move the protective stop to $4.06.

4-JUNE EUROCURRENCY - Long from 13439 - TC - 13591 - The bullish reaction swing triggered a strong rally on Monday, followed by a typical correction on Monday. This correction should only be a pause before the market continues higher. The next reversal date is due on May 20th. -- Hold the long position and move the protective stop to 13345.

5-JULY SOYBEANS - Soybeans traded below the previous four lows before recovering and closing near the top of the daily range. This is a bullish continuation pattern and suggests Soybeans will continue to move towards the reaction line target, currently at $12.00.

*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.