TECH TALK BY Scott R. Joss (Non member C.T.A)* In the 4/9/06 Joss report, I began developing ‘trading modules’ for spread traders between the July and December Soybean Oil. I explained that usually at this time of year, the July and December Soybean Oil price differentials generally widen between the two contract months. Traders were advised to buy the December Soybean Oil and sell the July Soybean Oil. At the time of the 4/9/06 report, the price differential between December and July Soybean Oil was+91. At the present time, the price differential between December and July Soybean Oil on Friday’s settlement is +107. The range of the price differentials between the December and July contract have been -200 (7/05) to +111 (6/02/06). In addition, I explained that traders will be unconcerned about the direction of Soybean Oil - but should only be concerned about the price differential between the two contracts. The December/July spread expanded since April by sixteen basis points to the plus side from +91; that equates to a positive $96 per spread. WHAT WERE SPREAD TRADERS ADVISED TO DO LAST WEEK? http://www.cleartrade.com/images/letter_June_4__2006.htm#SOYBEAN OIL WHAT ARE SPREAD TRADERS ADVISED TO DO NEXT WEEK? Five weeks ago, very aggressive traders outright long the December Soybean Oil were advised to put in place the second leg of the December/July Soybean Oil spread by selling the July Soybean Oil. Traders are advised to risk the spread to a differential of +90 (actual pit spread price).* Less aggressive traders who did not ‘leg’ the December/July Soybean Oil spread but simply entered the trade as a spread at +91 are advised to risk the spread to a differential of +90 (actual pit spread price). Remember: Traders will be unconcerned about the direction of Soybean Oil but will only be concerned about the price differential between the two contracts. Spread traders should note that there are only 19-days left in the July Soybean Oil contract before first notice day (6/30/06). However, because traders are short the July contract, they are not required to exit the trade until last trading day on July 14th. Our long-term spread price differential (based on the actual pit spread price on any future date) will be +182. The exit to all established spreads (if spreads are not stopped out) should be entered as follows: Buy X July Soybean Oil – Sell X December Soybean Oil at a price differential of +182. SOYBEAN OIL SPREAD CHART: http://www.cleartrade.com/images/rad11AC0Price.gif * (Futures traders and their account executives are advised to discuss this suggested stop). *** (Traders can exit or hedge a trade position once it moves in their direction but are advised to remove all resting stop orders).
OCTOBER SUGAR (SB6V) AND JULY SUGAR (SB6N) In the 4/2/06 Joss Report I began discussing July Sugar because of a monthly recommendation for May. On 5/18/06, July Sugar posted a monthly sell signal at 16.57. This week, due to volume shift and the fast approaching first notice day (6/30/06) for the July contract, I will begin discussing October Sugar. For the month of May, October Sugar did not have a monthly recommendation. However, October Sugar did post a weekly sell signal at 17.38 on 5/16/06. For next week October Sugar has a weekly recommendation: buy when trades 15.89 – sell when trades 15.21. The ‘Commitment of Traders’ report - published each Friday by the CFTC - indicated the net change in open interest for futures last week decreased by -3,533, posting a total open interest of 481,640 contracts. This product is for aggressive traders only. Traders are not to exceed the rule of thumb - 10% of equity to risk ratio. The weekly recommendation risk for October Sugar is $761.60, which suggested traders should have an account size of $7,616 per contract to trade this product. If you do not fit this risk profile, traders are advised to consult with their account executive for an option trading strategy. WHAT WERE TRADERS ADVISED TO DO LAST WEEK? http://www.cleartrade.com/images/letter_June_4__2006.htm#SUGAR WHAT ARE TRADERS ADVISED TO DO NEXT WEEK? Below are possible ‘trading modules’ for futures traders to consider next week: # 1) Aggressive traders who established short positions in the July contract at the monthly sell signal at 16.57 are advised to move stops above 15.56*. Option traders who purchased October 1450 puts are advised to risk 50% of current market price**. # 2) Aggressive traders who established short positions in the July contract on multiple closes below 15.85 are advised to move stops above 15.56*. Option traders who purchased October 1400 puts are advised to risk 50% of current market price**. # 3) Aggressive traders who established short positions in the July contract on a close below 15.58 are advised to move stops above 15.56*. Option traders who purchased October 1350 puts are advised to risk 50% of current market price**. Our first objective of 15.31 in the July contract was met on 6/1/06. Traders currently short the July contract are advised either to liquidate or move all stops as mentioned above. Traders are advised that they will need to exit all July positions by first notice day if they are not stopped out. If traders liquidate their established short July positions, they are advised to refer to ‘trading modules’ listed below for October Sugar. Aggressive traders are advised to establish a short position, placing all stops at 15.89* and refer to ‘trading module’ #7. Option traders are advised to purchase October 1350 puts, risking 70% of purchase price**. # 5) If October Sugar posts multiple closes (4 business days) below 14.76: Aggressive traders are advised to add to their existing short positions or establish a short position, placing all stops at 15.89.* Option traders are advised to purchase October 1350 puts, risking 70% of purchase price.* Our next objective will be 14.29. # 6) If October Sugar posts multiple closes (4 business days) below 14.00: Aggressive traders are advised to add to their existing short positions or establish a short position, placing all stops above 15.22*. Option traders are advised to purchase October 1300 puts, risking 70% of purchase price*. Our long-term objective will be 13.66. # 7) If October Sugar posts multiple closes (4 business days) above 15.89: Aggressive traders are advised to establish a long position, placing all stops at 15.19* and refer to ‘trading module’ #4. Option traders are advised to purchase October 1600 calls, risking 70% of purchase price**. # 8) If October Sugar posts multiple closes (4 business days) above 16.20: Aggressive traders are advised to add to their existing long positions or establish a long position, placing all stops at below 15.70*. Option traders are advised to purchase October 1700 calls, risking 70% of purchase price**. Our first objective will be 17.20. ----------------- * (Futures traders and their account executives are advised to discuss this suggested stop). ** (Option traders and their account executives are advised to discuss the suggested risk). *** (Traders can exit or hedge a trade position once it moves in their direction but are advised to remove all resting stop orders).
Last week I added June Heating Oil to ‘Tech Talk’ because of a weekly and monthly trade recommendation for June. This product is for very aggressive traders. Traders are not to exceed the rule of thumb - 10% of equity to risk ratio. The weekly recommendation trade risk is $4,158. The monthly recommendation trade risk is $8,316. If you do not fit this risk profile, traders are advised to consult with their account executive for an option trading strategy. The ‘Commitment of Traders’ report - published each Friday by the CFTC - indicated the net change in open interest for futures last week decreased by -1,159, posting a total open interest of 165,373 contracts. WHAT WERE TRADERS ADVISED TO DO LAST WEEK? http://www.cleartrade.com/images/letter_June_4__2006.htm#HEATING OIL WHAT ARE TRADERS ADVISED TO DO NEXT WEEK? On 6/5/06 and 6/9/06 July Heating Oil posted a weekly buy signal at 2.0480. For June, July Heating Oil has a monthly recommendation: buy when trades 2.1220 – sell when trades 1.9240. # 1) If July Heating Oil posts multiple closes (4 business days) above 2.0480: Very Aggressive traders are advised to establish a long position, placing all stops at 1.9240* and refer to ‘trading module’ #3. # 2) If July Heating Oil posts multiple closes (4 business days) above 2.1220: Very Aggressive traders are advised to either add to their existing long position or establish a long position, placing all stops at 1.9240* and refer to ‘trading module’ #3. Our objective will be 2.3200. # 3) If July Heating Oil posts multiple closes (4 business days) below 1.9490: Very Aggressive traders are advised to establish a short position, placing all stops at 2.1220* and refer to ‘trading module’ #1. # 4) If July Heating Oil posts multiple closes (4 business days) below 1.9240: Very Aggressive traders are advised to either add to their existing short position or establish a short position, placing all stops at 2.1220* and refer to ‘trading module’ #1. Our objective will be 1.7260. DAILY CHART: ----------------- * (Futures traders and their account executives are advised to discuss this suggested stop). ** (Option traders and their account executives are advised to discuss the suggested risk). *** (Traders can exit or hedge a trade position once it moves in their direction but are advised to remove all resting stop orders).
SEPTEMBER ORANGE JUICE AND JULY ORANGE JUICE (OJN6) Last week, I added July Orange Juice to ‘Tech Talk’ because of a weekly trade recommendation. This week I’m adding September Orange Juice to ‘Tech Talk’ due to volume shift and the fast approaching first notice day (7/3/06) for the July contract. July Orange Juice last week did not post a weekly buy signal that is still active. For next week, September Orange Juice has a ‘Coil’ weekly recommendation. This product is for aggressive traders. Traders are not to exceed the rule of thumb - 10% of equity to risk ratio. The September weekly coil trade recommendation risk is $1,027.50. If you do not fit this risk profile, traders are advised to consult with their account executive for an option trading strategy. The ‘Commitment of Traders’ report - published each Friday by the CFTC - indicated the net change in open interest for futures last week decreased by -1,432, posting a total open interest of 30,044 contracts. WHAT WERE TRADERS ADVISED TO DO LAST WEEK? http://www.cleartrade.com/images/letter_June_4__2006.htm#ORANGE JUICE WHAT ARE TRADERS ADVISED TO DO NEXT WEEK? For next week September Orange Juice has a ‘coil’ weekly recommendation: buy when trades 157.05 – sell when trades 150.20. # 1) If July Orange Juice posts multiple closes (4 business days) above 157.05: Aggressive traders are advised to establish a long position, placing all stops at 150.20*. # 2) If July Orange Juice posts multiple closes (4 business days) above 161.50: Aggressive traders are advised to either add to their existing long position or establish a long position, placing all stops below 157.05*. Our first objective will be a challenge of contract highs at 164.00. # 3) If July Orange Juice posts multiple closes (4 business days) above 164.00: Aggressive traders are advised to either add to their existing long position or establish a long position, placing all stops below 159.50* Our next objective will be 193.00. # 4) If July Orange Juice posts multiple closes (4 business days) below 150.20: Aggressive traders are advised to establish a short position, placing all stops at 157.05* and refer to ‘trading module’ #1. Our first objective will be 139.20. # 5) If July Orange Juice posts multiple closes (4 business days) below 147.75: Aggressive traders are advised to either add to their existing short position or establish a short position, placing all stops at 157.05* and refer to ‘trading module’ #1. Our first objective will be 145.00. # 6) If July Orange Juice posts multiple closes (4 business days) below 143.10: Aggressive traders are advised to either add to their existing short position or establish a short position, placing all stops above 147.75*. Our objective will be 126.75. DAILY CHART: ----------------- * (Futures traders and their account executives are advised to discuss this suggested stop). ** (Option traders and their account executives are advised to discuss the suggested risk). Last week I added July Soybeans to ‘Tech Talk’ because of an ‘intra-day’ buy signal, ‘intra-week’ buy signal and a potential ‘intra-month’ buy signal that may or may not occur. This product is for aggressive traders. Traders are not to exceed the rule of thumb - 10% of equity to risk ratio. The ‘intra-month’ risk for July Soybeans is $2,150. The ‘intra-month’ risk for August Soybeans is $2,075. If you do not fit this risk profile, traders are advised to consult with their account executive for an option trading strategy. The ‘Commitment of Traders’ report - published each Friday by the CFTC - indicated the net change in open interest for futures last week decreased by -1,215, posting a total open interest of 383,302 contracts. http://www.cleartrade.com/images/letter_June_4__2006.htm#SOYBEANS # 1) Aggressive traders who established long positions at the ‘intra-day’ buy signal of 583.25 have exited their established long positions on resting sell stops below 589.00*. Option traders who purchased July 580 calls have exited their positions. Option traders who purchased August 600 calls have exited their positions. # 2) Aggressive traders who established long positions at the ‘intra-week’ buy signal of 589.25 have exited their established long positions on resting sell stops below 589.00*. Option traders who purchased July 620 calls have exited their positions. Option traders who purchased August 640 calls have exited their positions. Aggressive traders have exited their established long position on resting sell stops below 589.00* Option traders who purchased either July 600 calls or August 640 calls have exited their positions. # 4) Traders are advised to sit on the sidelines and wait for another trading opportunity. # 5) If August Soybeans post a close at or above 625.50 by June 30th: Aggressive traders are advised to establish a long position, placing stops below 616.00. Option traders are advised to purchase August 640 calls, risking 70% of purchase price. ----------------- * (Futures traders and their account executives are advised to discuss this suggested stop). ** (Option traders and their account executives are advised to discuss the suggested risk). *** (Traders can exit or hedge a trade position once it moves in their direction but are advised to remove all resting stop orders).
Last week I added July Corn to ‘Tech Talk’ because of an ‘intra-day’ buy signal, ‘intra-week’ buy signal and an ‘intra-month’ buy signal (the ‘intra-month’ buy signal was posted in May). This product is for more conservative traders. Traders are not to exceed the rule of thumb - 10% of equity to risk ratio. The ‘intra-month’ risk for July Corn was $737.50. The ‘intra-week’ risk for July Corn was $475. If you do not fit this risk profile, traders are advised to consult with their account executive for an option trading strategy. The ‘Commitment of Traders’ report - published each Friday by the CFTC - indicated the net change in open interest for futures last week increased by 2,079, posting a total open interest of 1,347,142 contracts. WHAT WERE TRADERS ADVISED TO DO LAST WEEK? http://www.cleartrade.com/images/letter_June_4__2006.htm#CORN # 1) Traders who established long positions at the ‘intra-month’ buy signal of 255.00 have exited their established long positions on resting sell stops below 247.50*. # 2) Traders who established long positions at the ‘intra-day’ buy signal of 254.25 have exited their established long positions on resting sell stops below 247.50*. # 3) Traders who established long positions at the ‘intra-week’ buy signal of 257.75 have exited their established long positions on resting sell stops below 247.50*. # 5) Traders are advised to sit on the sidelines and wait for another trading opportunity. DAILY CHART: ----------------- * (Futures traders and their account executives are advised to discuss this suggested stop). ** (Option traders and their account executives are advised to discuss the suggested risk). *** (Traders can exit or hedge a trade position once it moves in their direction but are advised to remove all resting stop orders).
CHART WATCH by Scott R. Joss (Non member C.T.A)* Readers and clients call during the week and ask: What are you watching? Watching can mean that the markets are developing a 'recommendation' or a chart pattern that has not yet fully developed - or may never develop. During the course of the week or month it is not uncommon to find an `intra-day, intra-week or intra-month' recommendation that was previously not revealed when this newsletter was written. Products that currently fit into this 'watch' category are listed below and should be 'watched.'
Last week I added July Lean Hogs to ‘Chart Watch’ because of a monthly recommendation. The reason this product was placed in ‘Chart Watch’ and not ‘Tech Talk’ is my reluctance to trade meat products. This product is for aggressive traders. Traders are not to exceed the rule of thumb - 10% of equity to risk ratio. The monthly recommendation trade risk was $1,668. If you do not fit this risk profile, traders are advised to consult with their account executive for an option trading strategy. The ‘Commitment of Traders’ report - published each Friday by the CFTC - indicated the net change in open interest for futures last week increased by 1,464, posting a total open interest of 162,294 contracts. WHAT WERE TRADERS ADVISED TO DO LAST WEEK? http://www.cleartrade.com/images/letter_June_4__2006.htm#LEAN HOGS WHAT ARE TRADERS ADVISED TO DO NEXT WEEK? For June, July Lean Hogs has a monthly recommendation: buy when trades 68.62 – sell when trades 64.45. On 6/1/06, July Lean Hogs posted a monthly buy signal at 68.62. On 6/7/06, July Lean Hogs posted a daily buy signal at 70.12. # 1) Aggressive traders who want to trade July Lean Hogs are to contact their ClearTrade account executive at 1-800-493-4444 for an updated ‘trading module’ for next week. DAILY CHART: ----------------- ** (Option traders and their account executives are advised to discuss the suggested risk). *** (Traders can exit or hedge a trade position once it moves in their direction but are advised to remove all resting stop orders).
SEPTEMBER U.S. DOLLAR (DX6U) VERSES SEPTEMBER EURO (EU6U) This week I’m adding the September U.S. Dollar and September Euro-currency (FX) to ‘Chart Watch.’ The U.S. Dollar last week posted an ‘intra-week’ buy signal and an unconfirmed monthly buy signal. The Euro posted an ‘intra-week’ sell signal and is developing a potential monthly trade signal for July, which will not be confirmed until the close of business June 30th. Remember: The Federal Reserve (FOMC) meeting is on June 29th. WHAT ARE TRADERS ADVISED TO DO NEXT WEEK? Traders are advised to sit on the sidelines and wait for a possible monthly trade signal in July. A ClearTrade account representative will proactively contact our clients if a trade signal is posted before June 30th. EURO DAILY CHART: -----------------
U.S DOLLAR DAILY CHART: * (Futures traders and their account executives are advised to discuss this suggested stop). ** (Option traders and their account executives are advised to discuss the suggested risk). *** (Traders can exit or hedge a trade position once it moves in their direction but are advised to remove all resting stop orders).
CURRENT 'MONTHLY' RECOMMENDATIONS FOR JUNE: - JULY HEATING OIL - JULY LEAN HOGS - JULY PORK BELLIES FUTURE WATCH Future watch will list developing 'monthly' recommendations to watch in June for July. By listing these products, traders can `feed-forward' with anticipation and focus - centering on products that will provide direction and hopefully, opportunity. Traders should begin studying the 'weekly' and 'monthly' charts for the products listed below. Don't forget between now and the end of the month, some or all of these products may be de-listed. 'Monthly' recommendations will be revealed on the close of business June 30 and sent via email for July.
- CORN - WHEAT - OATS - SOYBEAN OIL - COPPER - CRUDE OIL - HEATING OIL - ORANGE JUICE - EURO-CURRENCY (FX) - SWISS FRANC - CANADIAN DOLLAR - BRITISH POUND
MONTHLY CALENDAR
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If you do not completely understand this information, you are advised totake NO action until speaking with your Account Executive. ClearTrade® Inc. may be reached at 800-493-4444 * If the market opens above the buy price shown then place a stop order to sell at the price to enter a short trade. ScottJoss is a 'non member' CTA and is providing the Joss Report trade recommendations and weekly trade advisor to ClearTrade® Inc. clients. Scott Joss 'is a principal' of ClearTrade® Inc. and 'is a registered IB member' with the NFA. NOTE: Past results are no indication of future performance. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of futureconditions are attempted. The contents of the Joss Report weekly trade advisor newsletter and trade recommendations are copyright© 1997 - 2006, Scott R. Joss / S.R. Joss Inc./ClearTrade® Inc. *TM. All Rights Reserved. Calendar provided by Briefing.com, Inc. Data is provided for informational purposes only, and is not intended for trading purposes. Neither ClearTrade, Inc. nor any of its data or content providers (such as Reuters, CSI, and Briefing.com) shall be liable for any errors or delays in the content, or for any actions taken in reliance thereon. “The organizations and links presented in this newsletter/Joss Report are in no way affiliated with ClearTrade® Inc. or S.R. Joss Inc..ClearTrade® does not necessarily promote or endorse the services orpublications described herein. ClearTrade has no role in the production or review of these products or services and makes no warranty, either expressed or implied, as to their contents, accuracy or performance.” This publication is strictly the opinion of its writer and is intended solely for informative purposes and is not to be construed, under any circumstances, by implication or otherwise, as an offer to sell or a solicitation to buy or trade in any commodities or securities here in named. Information is obtained from sources believed to be reliable, but is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted. Futures and options trading involve risk. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. In no event should the content of this market letter be construed as an express or an implied promise, guarantee or implication by or from ClearTrade® that you will profit or that losses can or will be limited in any manner what so ever. |
