* Buy 'trading modules' are highlighted in green. TECH TALK BY Scott R. Joss (Non member C.T.A)* This week I wanted to briefly discuss the cash CRB because of a potentially bullish ‘head and shoulders’ bottom. Traders know the CRB is a composite index of various commodities. What most traders don’t know is the weighting of the various commodities. The weighting and the revamping of the contract has changed so much over the years that traders stopped trading the futures contract. However, the cash CRB still serves its main purpose and can be charted. In addition to a potentially bullish ‘head and shoulders’ bottom, the cash CRB has developed a yet to be determined trade signal for next week. Why would this be important? If the cash CRB posted a buy signal above 305.86 and posted multiple closes above 309.58, this might constitute a bottom for some products and a price advance for others. Conversely, if the cash CRB posted a sell signal at 296.99 and posted multiple closes below 292.72, this might signal the death knoll for many commodities for the rest on this year. Traders are advised to be on their toes between Election Day and the first quarter of 2007. Remember, what influences market direction is supply/demand, AND policy changes.
In the Joss Report dated October 1st, I added December Cocoa to ‘Chart Watch’ due to a trade signal. On 9/18/06, December Cocoa posted an unconfirmed yearly sell signal at 1437. On 9/21/06, December Cocoa posted a buy signal at 1505. On 9/25/06, December Cocoa posted a sell signal at 1484. On 10/03/06, December Cocoa posted a sell signal at 1448. On 10/13/06, December Cocoa posted multiple closes below 1437. December Cocoa has two unfilled price gaps above the current market price. The most recent unfilled price gap is between 1562 and 1572 (8/18/06). Let’s review the long-term weekly and monthly charts. Each has developed a three-year bearish descending right triangle. Recently, Cocoa had a price advance pushing through the descending trendline. However, in recent weeks Cocoa had a price decline challenging its upside breakout at 1414. On the daily chart December Cocoa has developed a bearish ‘descending’ right triangle. The ‘descending’ trendline began from highs of 1767 (7/11/06) through 1534 (9/22/06) and 1491 (10/05/06). Technically, December Cocoa would need to have multiple closes below October Cocoa’s low of 1410 to see an accelerated price decline. This product is not for the faint of heart because of the higher or lower openings each day - which can be dramatic. The ‘Commitment of Traders’ report - published each Friday by the CFTC - indicated the net change in open interest for futures last week decreased by -661, posting a total open interest of 146,269 contracts. Traders are advised not to exceed the rule of thumb - 10% of equity to risk ratio. The proposed trade risk will be $1,220. Below are possible ‘trading modules’ for futures traders to consider next week: The trading modules listed below are for very aggressive traders. Less aggressive traders are advised to wait for several trade signals before establishing a position. Very aggressive traders who established a short position at 1434 or below are advised to move stops for these positions above 1491*. # 1) If December Cocoa posts a price advance towards 1438: Very Aggressive traders are advised to either add to their existing short position or establish a short position, placing stops above 1491 and refer to ‘trading module’ # 6*. # 2) If December Cocoa posts 1396 and multiple closes below 1390****: Very aggressive traders are advised to either add to their existing short position or establish a short position, placing stops above 1453*. # 3) If December Cocoa posts multiple closes below 1372****: Very aggressive traders are advised to either add to their existing short positions or establish a short position, placing all stops above 1415*. # 4) If December Cocoa posts multiple closes below 1338****: Very aggressive traders are advised to either add to their existing short positions or establish a short position, placing all stops above 1415*. Our objective will be 1295. # 5) If December Cocoa posts multiple closes below 1290****: Very aggressive traders are advised to either add to their existing short positions or re-establish a short position, placing all stops above 1396*. # 6) If December Cocoa posts a close above 1535****: Very aggressive traders are advised to establish a long position, placing all stops at 1448 and refer to trading module # 1*. # 7) If December Cocoa posts multiple closes above 1550****: Very aggressive traders are advised to either add to their existing long position or establish a long position, placing all stops below 1510*. Our objective will be 1572. DAILY CHART: -----------------
In the Joss Report dated 9/10/06, I began discussing the December Swiss Franc because of several sell trade signals and that the December U.S. Dollar had a buy trade signal. Traders were reminded that the Dollar moves opposite the Swiss Franc. On 9/06/06, the December Swiss Franc posted a sell signal at .8159. On 9/07/06, the December Swiss Franc posted an unconfirmed sell signal at .8140. On 9/07/06, the December U.S. Dollar posted a buy signal at .8497. On 9/29/06, the December Swiss Franc posted a confirmed sell signal at .8140. On 10/04/06, the December Swiss Franc posted a sell signal at .8080. The ‘Commitment of Traders’ report - published each Friday by the CFTC - indicated the net change in open interest for futures last week increased by 23,292, posting a total open interest of 95,979 contracts. This product is for aggressive traders only. Traders are advised not to exceed the rule of thumb - 10% of equity to risk ratio. The proposed trade risk is $2,175. Below are possible ‘trading modules’ for futures traders to consider next week: Aggressive traders who established a short position at .8080 are advised to move their stops above .8080*. Aggressive traders who established a short position at or below .7995 are advised to move stops above .8080*. # 1) If the December Swiss posts a price advance towards .7995: Aggressive traders are advised to establish a short position, placing stops above .8080. # 2) If the December Swiss posts multiple closes below .7879: Aggressive traders are advised to either add to their existing short positions or establish a short position, placing all stops above .7995*. # 3) If the December Swiss posts multiple closes below .7851: Aggressive traders are advised to either add to their existing short positions or establish a short position, placing all stops above .7967*. # 4) If the December Swiss posts multiple closes below .7823: Aggressive traders are advised to either add to their existing short positions or establish a short position, placing all stops above .7879*. Our objective will be .7777. DAILY CHART: -----------------
In the Joss Report dated October 8th, I added the December British Pound to ‘Tech Talk’ due to a trade signal for last week. On 9/28/06, the December Pound posted an unconfirmed sell signal at 1.8755. On 10/09/06, the December Pound posted a sell signal at 1.8686. On 10/10/06, the December Pound posted a sell signal at 1.8626. The December Pound had been in a five-week consolidation between 1.9116 (8/31/06) highs and 1.8627 lows (9/11/06). This product is not for the faint of heart because of the nature of its trading personality - which can be dramatic. The ‘Commitment of Traders’ report - published each Friday by the CFTC - indicated the net change in open interest for futures last week decreased by -2,817, posting a total open interest of 101,848 contracts. Traders are advised not to exceed the rule of thumb - 10% of equity to risk ratio. The proposed trade risk next week will be $2,181. Below are possible ‘trading modules’ for futures traders to consider next week: The trading modules listed below are for very aggressive traders. Less aggressive traders are advised to wait for several trade signals before establishing a position. Very aggressive traders who established a short position at 1.8686 or below are advised to place stops above 1.8727*. Very aggressive traders who established a short position at 1.8626 or below are advised to place stops above 1.8727*. # 1) If the December Pound posts multiple closes below 1.8529****: Very aggressive traders are advised to either add to their existing short positions or establish a short position, placing stops above 1.8627 and refer to ‘trading module’ # 6*. Our objective will be 1.8458. # 2) If the December Pound posts multiple closes below 1.8447****: Very aggressive traders are advised to either add to their existing short positions or re-establish a short position, placing all stops above 1.8530*. # 3) If the December Pound posts multiple closes below 1.8300****: Very aggressive traders are advised to either add to their existing short positions or establish a short position, placing all stops above 1.8447*. # 5) If the December Pound posts multiple closes below 1.8248****: Very aggressive traders are advised to either add to their existing short positions or establish a short position, placing all stops above 1.8447*. Our objective will be 1.8168. # 6) If the December Pound posts 1.8914 and multiple closes above 1.8930****: Very aggressive traders are advised to establish a long position, placing all stops at 1.8686 and refer to trading module #1*. # 7) If the December Pound posts multiple closes above 1.8975****: Very aggressive traders are advised to either add to their existing long position or establish a long position, placing stops at 1.8686*. # 8) If the December Pound posts multiple closes above 1.9044****: Very aggressive traders are advised to either add to their existing long position or establish a long position, placing all stops below 1.8913*. Our objective will be 1.9142. DAILY CHART: -----------------
Last week I added December Coffee to ‘Tech Talk’ due to a trade signal for last week and possibly a trade signal for next month. On 9/08/06, December Coffee posted a sell signal at 105.35. On 10/10/06, December Coffee posted a sell signal at 102.45. Last week traders were to note that on 7/28/06 and 9/18/06, December Coffee posted an unconfirmed ‘double bottom’ (divergence) at 101.40 and 101.00, respectively. This week, traders are to note that if December Coffee posts a close below last year’s low of 99.85 (lows for the December contract) a rapid price decline may be imminent. This product is not for the faint of heart because of the nature of its trading personality - which can be very dramatic and volatile. The ‘Commitment of Traders’ report - published each Friday by the CFTC - indicated the net change in open interest for futures last week decreased by -1,099, posting a total open interest of 109,769 contracts. Traders are advised not to exceed the rule of thumb - 10% of equity to risk ratio. The proposed trade risk next week will be $3,825. Below are possible ‘trading modules’ for futures traders to consider next week: The trading modules listed below are for very aggressive traders. Less aggressive traders are advised to wait for several trade signals before establishing a position. Very aggressive traders who established a short position at 102.45 are advised to place stops above 108.60*. # 1) If December Coffee post 102.45 and multiple closes below 101.80****: Very aggressive traders are advised to establish a short position, placing stops above 108.60 and refer to ‘trading module’ # 6*. # 2) If December Coffee posts multiple closes below 101.00****: Very aggressive traders are advised to either add to their existing short positions or establish a short position, placing all stops above 107.90*. # 3) If December Coffee posts multiple closes below 100.50****: Very aggressive traders are advised to either add to their existing short positions or establish a short position, placing all stops above 103.00*. # 4) If December Coffee posts multiple closes below 99.85****: Very aggressive traders are advised to either add to their existing short positions or establish a short position, placing all stops above 102.45*. # 5) If December Coffee posts multiple closes below 98.00****: Very aggressive traders are advised to either add to their existing short positions or establish a short position, placing all stops above 101.40*. Our objective will be 96.95. # 6) If December Coffee post 107.95 and multiple closes above 108.60****: Very aggressive traders are advised to establish a long position, placing all stops at 102.45 and refer to trading module # 1*. # 7) If December Coffee posts multiple closes above 110.20****: Very aggressive traders are advised to either add to their existing long position or establish a long position, placing stops below 106.25*. # 8) If December Coffee posts multiple closes above 111.20****: Very aggressive traders are advised to either add to their existing long position or establish a long position, placing all stops below 107.95*. Our objective will be 113.45. # 9) If December Coffee does not post lows of 100.95 or highs of 111.25 in October: Aggressive traders will be advised of a new set of ‘trading modules’ in the November 4th issue of The Joss Report. DAILY CHART: -----------------
Last week I added January Soybeans to ‘Chart Watch’ due to a potential breakout trade signal at 577.00. This week I’ve moved January Soybeans to ‘Tech Talk’ due to the explosive upside price advance. January Soybeans had been in a five-week consolidation between lows of 550.00 (9/13/06) and highs of 577.00 (8/25/06 and 10/04/06). This product is not for the faint of heart because of the higher or lower openings each day - which can be dramatic. The ‘Commitment of Traders’ report - published each Friday by the CFTC - indicated the net change in open interest for futures last week decreased by -567, posting a total open interest of 378,618 contracts. Traders are advised not to exceed the rule of thumb - 10% of equity to risk ratio. The proposed trade risk will be $2,800. Below are possible ‘trading modules’ for futures traders to consider next week: Aggressive traders who established a long position at 577.00 or above are advised to move their stops below 573.00*. Option traders who purchase January 580 calls are advised to risk 50% of purchase price or sell January 680 calls to enter a bull call spread**. Aggressive traders who either added to their long position or established a long position on a price pullback to 573.00 are advised to move their stops below 573.00*. Option traders who purchase January 600 calls are advised to risk 50% of purchase price or sell January 700 calls to enter a bull call spread**. Aggressive traders who either added to their long position or established a long position at 582.00 or above are advised to place their stops below 573.00*. Option traders who purchase January 600 calls are advised to risk 50% of purchase price or sell January 700 calls to enter a bull call spread**. Aggressive traders who either added to their long position or established a long position at 591.00 or above are advised to place their stops below 577.00*. Option traders who purchase January 620 calls are advised to risk 50% of purchase price or sell January 720 calls to enter a bull call spread**. Our objective of 606.00 was met on 10/13/06. # 1) If January Soybeans posts a price decline towards 588.25: Very aggressive traders are advised to either add to their existing long position or establish a long position, placing all stops below 577.00*. Option traders are advised to purchase January 600 calls, risking 70% of purchase price**. # 2) If January Soybeans post 609.50 and multiple closes above 612.50****: Very aggressive traders are advised to either add to their existing long position or establish a long position, placing all stops below 584.25*. Option traders are advised to purchase January 640 calls, risking 70% of purchase price **. Our objective will be 626.00. # 3) If January Soybeans post multiple closes above 622.00****: Very aggressive traders are advised to either add to their existing long position or establish a long position, placing all stops below 592.25*. Option traders are advised to purchase January 640 calls, risking 70% of purchased price **. # 4) If January Soybeans post multiple closes above 626.00****: Very aggressive traders are advised to either add to their existing long position or establish a long position, placing all stops below 596.00*. # 5) If January Soybeans post multiple closes above 633.50****: Very aggressive traders are advised to either add to their existing long position or establish a long position, placing all stops below 609.00*. Our objective will be 645.75. DAILY CHART: -----------------
This week I’m adding December Heating Oil to ‘Tech Talk’ due to a trade signal for next week. This product is not for the faint of heart because of the higher or lower openings each day - which can be dramatic. The ‘Commitment of Traders’ report - published each Friday by the CFTC - indicated the net change in open interest for futures last week decreased by -2,096, posting a total open interest of 219,578 contracts. Traders are advised not to exceed the rule of thumb - 10% of equity to risk ratio. The proposed trade risk will be $4,285. Below are possible ‘trading modules’ for futures traders to consider next week: The trading modules listed below are for very aggressive traders. Less aggressive traders are advised to wait for several trade signals before establishing a position. # 1) If December Heating Oil posts 1.8111, and multiple closes above 1.8234****: Very aggressive traders are advised to establish a long position, placing all stops at 1.7089 and refer to trading module # 5*. # 2) If December Heating Oil posts multiple closes above 1.8440****: Very aggressive traders are advised to either add to their existing long position or establish a long position, placing all stops at 1.7089*. # 3) If December Heating Oil posts multiple closes above 1.8650****: Very aggressive traders are advised to either add to their existing long position or establish a long position, placing all stops below 1.8110*. # 4) If December Heating Oil posts multiple closes above 1.8900****: Very aggressive traders are advised to either add to their existing long position or establish a long position, placing all stops below 1.8440*. Our objective will be 1.9550. # 5) If December Heating Oil posts 1.7089 and multiple closes below 1.6936****: Very aggressive traders are advised to establish a short position, placing stops at 1.8111 and refer to ‘trading module’ # 1*. # 6) If December Heating Oil posts multiple closes below 1.6637****: Very aggressive traders are advised to either add to their existing short positions or establish a short position, placing all stops above 1.7090*. # 7) If December Heating Oil posts multiple closes below 1.6360****: Very aggressive traders are advised to either add to their existing short positions or establish a short position, placing all stops above 1.6637*. Our objective will be 1.6249. # 8) If December Heating Oil posts multiple closes below 1.5970****: Very aggressive traders are advised to either add to their existing short positions or re-establish a short position, placing all stops above 1.6249*. Our objective will be 1.5875. DAILY CHART: -----------------
This week I’m adding December Silver to ‘Tech Talk’ due to a trade signal for next week and a potential trade signal for November. The daily chart appears to be developing a potentially bullish ‘W’ formation. If this formation were to develop, then the middle of the ‘W’ would be at 11.840. This product is not for the faint of heart because of the higher or lower openings each day - which can be dramatic due to extreme volatility. The ‘Commitment of Traders’ report - published each Friday by the CFTC - indicated the net change in open interest for futures last week increased by 1,337, posting a total open interest of 100,304 contracts. Traders are advised not to exceed the rule of thumb - 10% of equity to risk ratio. The proposed weekly trade risk will be $2,925. Below are possible ‘trading modules’ for futures traders to consider next week: The trading modules listed below are for very aggressive traders. Less aggressive traders are advised to wait for several trade signals before establishing a position. # 1) If December Silver posts 11.730, and multiple closes above 11.835****: Very aggressive traders are advised to establish a long position, placing all stops at 11.145 and refer to trading module # 5*. # 2) If December Silver posts multiple closes above 11.980****: Very aggressive traders are advised to either add to their existing long position or establish a long position, placing all stops at 11.725*. # 3) If December Silver posts multiple closes above 12.425****: Very aggressive traders are advised to either add to their existing long position or establish a long position, placing all stops below 11.980*. # 4) If December Silver posts multiple closes above 12.890****: Very aggressive traders are advised to either add to their existing long position or establish a long position, placing all stops below 12.425*. Our objective will be 13.100. # 5) If December Silver posts 11.145 and multiple closes below 10.870****: Very aggressive traders are advised to establish a short position, placing stops at 11.730 and refer to ‘trading module’ # 1*. # 6) If December Silver posts multiple closes below 10.650****: Very aggressive traders are advised to either add to their existing short positions or establish a short position, placing all stops above 11.150*. # 7) If December Silver posts multiple closes below 10.550****: Very aggressive traders are advised to either add to their existing short positions or establish a short position, placing all stops above 10.870*. Our objective will be 9.260. # 8) If December Silver does not post lows of 10.545 or highs of 13.375 in October: Aggressive traders will be advised of a new set of ‘trading modules’ in the November 4th issue of The Joss Report. 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). **** (Very aggressive Traders can enter a trade position without multiple closes but are advised to use resting stop orders).
CHART WATCH by Scott R. Joss (Non member C.T.A)* Chart Watch includes products developing a potential trade signal 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' trade signal 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.'
In the Joss Report dated 8/27/06, I began discussing December Gold because of a pending trade signal. On 9/08/06, December Gold posted a sell signal at 615.40. If Gold remained below 615.40, traders would continue to see selling pressure. Furthermore, if December Gold could post multiple closes below 576.00, additional selling pressure would re-enter the market. This week I’m moving December Gold to ‘Chart Watch’ due to a trade signal for next week and the inability of Gold to post multiple closes below 576.00. Traders will need to be on their toes for this one just in case direction and momentum turn positive. December Gold has several unfilled price gaps below the current market price. The most recent is between lows of 583.00 and highs of 587.60 (10/13/06). December Gold has three unfilled price gaps above the current market price. The most recent price gap is between 595.00 and 602.00. The ‘Commitment of Traders’ report - published each Friday by the CFTC - indicated the net change in open interest for futures last week increased by 4,265, posting a total open interest of 334,329 contracts. This product is for very aggressive traders only. Traders are advised not to exceed the rule of thumb - 10% of equity to risk ratio. The proposed trade risk is $2,140. Below are possible ‘trading modules’ for futures traders to consider next week: Aggressive traders who established a short position at 615.40 are advised to move stops to 594.30*. Option traders who purchased 580 puts are advised to exit their positions if 594.30 is posted. Aggressive traders who either added to their short position or established a short position at 611.00 are advised to move stops to 594.30*. Option traders who purchased 580 puts are advised to exit their positions if 594.30 is posted. Aggressive traders who either added to their existing short position or established a short position at 595.00 or below are advised to move stops to 594.30*. Option traders who purchased 570 puts are advised to exit their positions if 594.30 is posted. # 1) If December Gold posts 594.30: Aggressive traders will have exited their short positions and are advised to sit on the sidelines and wait for another trading opportunity and refer to ‘trading module’ # 2. # 2) If December Gold posts multiple closes below 572.90****: Aggressive traders are advised to either add to their exiting short position or establish a short position, placing all stops at 594.30*. # 3) If December Gold posts a close below 565.10 and multiple closes below 563.50****: Aggressive traders are advised to either add to their existing short positions or establish a short position, placing all stops above 576.60*. # 4) If December Gold posts multiple closes below 555.60****: Aggressive traders are advised to either add to their existing short positions or establish a short position, placing all stops above 576.60*. Our objective will be 541.60. DAILY CHART: -----------------
Last week, I added December Live Cattle to ‘Chart Watch’ due to a trade signal. This week Live Cattle will stay in ‘Chart Watch’ because meats are not my favorite product to technically track due to their unpredictability. In addition, December Live Cattle still appears to have a complex ‘broadening formation’ on the daily chart. This product is not for the faint of heart because of the higher or lower openings each day - which can be dramatic. The ‘Commitment of Traders’ report - published each Friday by the CFTC - indicated the net change in open interest for futures last week decreased by -12,609, posting a total open interest of 209,091 contracts. Traders are advised not to exceed the rule of thumb - 10% of equity to risk ratio. Below are possible ‘trading modules’ for futures traders to consider next week: Very aggressive traders who established a short position at 89.17 or below are advised to move their stops above 88.55 and refer to ‘trading module’ # 1*. # 1) If December Live Cattle posts multiple closes below 86.65****: Very aggressive traders are advised to either add to their existing short positions or re-establish a short position, placing all stops above 88.55*. # 2) If December Live Cattle posts multiple closes below 86.30****: Very aggressive traders are advised to either add to their existing short positions or establish a short position, placing all stops above 87.65*. Our objective will be 83.15. DAILY CHART: -----------------
For the last twenty-five weeks I have developed and written ‘trading modules’ based on Sugar’s weekly and monthly sell signals. The first such monthly sell signal occurred last May - based on the July 2006 contract at 16.57. This key monthly sell signal at 16.57 has had the power to drive current prices to lows of 10.66 verses the March 2007 contract. Two weeks ago I moved Sugar to ‘Chart Watch’ because of the decreasing open interest – and not because of a technical change in trend… yet. In addition, I asked if this downward momentum might continue - or has Sugar entered a consolidation period? I listed the two all important bullish ‘W’ formation breakouts from 2005. The first key upside ‘W’ breakout was at 8.70. The second key upside ‘W’ breakout occurred at 11.40. March Sugar has an unfilled price gap below the current market price between lows of 9.55 and highs of 9.58 (8/30/05). March Sugar has several unfilled price gaps above the current market price. The most recent price gap is between 11.35 and 11.55 (10/11/06). Our objective of 11.56 was met on 9/22/06. The ‘Commitment of Traders’ report - published each Friday by the CFTC - indicated the net change in open interest for futures last week increased by 3,994, posting a total open interest of 436,978 contracts. This product is for aggressive traders only. Traders are advised not to exceed the rule of thumb - 10% of equity to risk ratio. If you do not fit this risk profile, traders were and are advised to consult with their account executive for an option trading strategy. Below are possible ‘trading modules’ for futures traders to consider next week: Aggressive traders who established a short position below 12.15 and have not exited their positions are advised to place stops above 11.90 or exit their positions*. Aggressive traders who either added to their existing short position or established a short position below 11.88 and have not exited their positions are advised to place stops above 11.90 or exit their positions*. Aggressive traders who either added to their existing short position or established a short position below 11.47 and have not exited their positions are advised to place stops above 11.90 or exit their positions*. Aggressive traders who either added to their existing short position or established a short position on a price advance towards 11.69 are advised to place stops above 11.90 or exit their positions*. # 1) If March Sugar posts multiple closes below 10.66****: Aggressive traders are advised to either add to their existing positions or re-establish a short position, placing all stops above 11.90*. Option traders are advised to purchase March 1150 puts, risking 70% of purchase price**. # 2) If March Sugar posts multiple closes below 10.40****: Aggressive traders are advised to either add to their existing short positions or establish a short position, placing stops above 11.57*. Option traders are advised to purchase March 1100 puts, risking 70% of purchase price**. # 3) If March Sugar posts multiple closes below 10.15****: Aggressive traders are advised to either add to their existing short positions or establish a short position, placing stops above 11.02*. Option traders are advised to purchase March 1100 puts, risking 70% of purchase price**. Our objective will be 9.70. MARCH DAILY CHART: -----------------
In the Joss Report dated 9/17/06, I began developing ‘trading modules’ for November Crude Oil. Last week November Crude was removed from ‘Tech Talk’ and listed in ‘Chart Watch’ because of the fast approaching first notice day for November Crude Oil, open interest, and a key moving average at 58.54. This week I will begin to review December Crude Oil in ‘Chart Watch’ so that traders can familiarize themselves with key chart points for future reference. Between 8/07/06 and 8/09/06, December Crude Oil posted a bearish ‘island reversal’ top. In addition, between 6/21/06 and 8/16/06, December Crude Oil developed a bearish ‘M’ formation. The middle of the ‘M’ was at 75.30. On 8/16/06, December Crude Oil posted a close below the all important ‘M’ formation. On 8/17/06, December Crude Oil penetrated and closed below a five-month trendline at 74.40. On 9/01/06, December Crude Oil penetrated and closed below a sixteen-month trendline at 71.40. On 9/8/06, November Crude Oil posted a close below last year’s high (for the December contract) of 68.75. On 9/13/06, November Crude Oil penetrated a two-year trendline at 64.70. This product is for very aggressive traders and not for the faint of heart. Very aggressive traders were and continue to be advised not to exceed the rule of thumb - 10% of equity to risk ratio. If you do not fit this risk profile, traders were and are advised to consult with their account executive for an option trading strategy. Very aggressive traders looking to minimize risk continue to be advised to use the electronic miNY Crude Oil as their trading vehicle. The ‘Commitment of Traders’ report - published each Friday by the CFTC - indicated the net change in open interest for Crude Oil futures last week increased by 19,791, posting a total open interest of 1,193,421 contracts. The ‘Commitment of Traders’ report - published each Friday by the CFTC - indicated the net change in open interest for miNY Crude Oil futures last week decreased by -6,892, posting a total open interest of 45,667 contracts. WHAT ARE TRADERS ADVISED TO DO NEXT WEEK? Below are possible ‘trading modules’ for futures traders to consider next week: Very aggressive traders who established a short position at 62.80 or below in November Crude were advised to exit their position. Very aggressive traders who established a short position at 61.00 or below in the November Crude were advised to exit their position. Very aggressive traders who established a short position on a price advance towards 63.50 in November Crude were advised to exit their position. DAILY CHART: -----------------
In the Joss Report dated 9/10/06, I added the December 10-Year Note to ‘Chart Watch.’ Last week the December 10-year Note was moved from ‘Tech Talk’ to ‘Chart Watch’ because of a weekly reversal pattern, resistance at a key moving average of 108-200, and open interest. On 10/06/06, the December 10-year Note posted a sell signal at 108.050. The 10-year note developed a bearish ‘M’ formation between 9/18/06 and 10/06/06. The middle of the ‘M’ was at 107-280. On 10/06/06, the December 10-year Note penetrated and closed below the ‘M’ formation. On 10/10/06, the December 10-year note penetrated and closed below 107.165. On 10/13/06, the December 10-year note posted a sell signal at 106-315. The ‘Commitment of Traders’ report - published each Friday by the CFTC - indicated the net change in open interest for 10-Year Note futures last week increased by 106,828, posting a total open interest of 2,347,937 contracts. This product was and is for very aggressive traders only. Traders are advised not to exceed the rule of thumb - 10% of equity to risk ratio. Below are possible ‘trading modules’ for futures traders to consider next week: Very aggressive traders who established a short position at 108-050 are advised to move their stops above 107-280. Very aggressive traders who either added to their existing short position or established a short position at 107-280 or below are advised to move their stops above 107-280. Very aggressive traders who either added to their existing short position or established a short position at 106-315 or below are advised to move their stops above 107-195. # 1) If the December 10-year Note posts a price advance towards 107-145: Very aggressive traders are advised to either add to their existing short positions or establish a short position, placing stops above 107-280*. # 2) If the December 10-year note posts 106-250 and multiple closes below 106-225****. Very aggressive traders are advised to either add to their existing short positions or establish a short position, placing stops above 107-195*. # 3) If the December 10-year note posts 106-175 and multiple closes below 106-135****. Very aggressive traders are advised to either add to their existing short positions or establish a short position, placing stops above 106-255*. # 4) If the December 10-year note posts multiple closes below 106-095 ****. Very aggressive traders are advised to either add to their existing short positions or establish a short position, placing stops above 106-175*. Our first objective will be 105-240. # 5) If the December 10-year Note does not post lows of 106-170 or highs of 108-245 in October: Aggressive traders will be advised of a new set of ‘trading modules’ in the November 4th issue of The Joss Report. 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). **** (Very aggressive Traders can enter a trade position without multiple closes but are advised to use resting stop orders).
CURRENT 'MONTHLY' TRADE SIGNALS FOR OCTOBER:
- NO MONTHLY TRADE SIGNALS FOR OCTOBER
Future watch will list developing 'monthly' trade signals to watch in October for November. 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 'daily', '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' trade signals will be revealed on the close of business October 31st.
- U.S. 30-YEAR BOND - 10-YEAR NOTE - SILVER - COFFEE - PORK BELLIES
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. |