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TECH TALK by Scott R. Joss (Non member C.T.A)*
MARCH S&P 500 (SP5H)
Last week I discussed that the S&P needed a close below 1175.70 by the close of business January 31st or the S&P would push upward, forcing traders to cover their short positions.
On the close of business January 31st the S&P 500 closed at 1181.70.
The S&P 500 had an unfilled price gap between 1183.00 and 1183.20.
The S&P has an unfilled price gap below the current market price between 1175.70 and 1177.30.
WHAT TRADERS WERE ADVISED TO DO LAST WEEK?
Traders who previously had established short positions at 1175.60 were advised to either keep their existing stop orders at 1183.20 - which was the unfilled price gap - or exit their short positions.
Traders were advised that if the S&P were to fill its price gap at 1183.20 they were to establish a long position, placing stops below 1175.70.
Our objective of 1191.50 was met.
WHAT SHOULD TRADERS DO NEXT WEEK?
Traders who established a long position at the 1183.20 price gap should move their stops from 1175.70 to below 1191.50.
If the S&P falls back to support at 1195.10, traders are advised to either add to their existing long position or establish a long position, placing stops below 1191.50.
If the S&P posts a close above last weeks high of 1204.20, traders are advised to either add to their existing long position or establish a long position, placing stops for this position only below 1197.50.
Our objective will be a challenge of contract highs at 1220.50.
If the S&P ever posted a close above the 'head' at 1220.50, the 'head and shoulders' formation, which still maybe active, will have failed. If this were to occur, traders are advised to either add to their existing long position or establish a long position, placing all stops below 1204.20.
Our objective will be 1276.50.
On the flip side....
If the S&P were to settle below 1195.20, traders are advised to use caution by either placing all stops below 1191.50 or exiting their long position.
If the S&P were to close below 1185.50, traders are advised to establish a short position, placing stops above 1191.50.
Our objective will be the unfilled price gap left below the current market price at 1175.70.
Conservative traders are advised to use the E-mini S&P as their primary trading vehicle.
DAILY CHART:
http://bohl.minot.com/d_Chart.cgi?SP05H
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WEEKLY CHART:
http://bohl.minot.com/w_Chart.cgi?SP
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MARCH SOYBEANS (S5H)
Soybeans had been in a five month price consolidation between 510.00 (11/05/04) lows and 565.00 (11/23/04) highs.
Last week I wrote, 'until soybeans closed below 510.00 or above 565.00 on a monthly basis, they would continue their price consolidation.'
On 2/1/05, soybeans closed below the all-important 510.00 level.
There are two unfilled price gaps above the current market price - the first between 519.00 and 522.50, the second between 565.00 and 566.50.
Soybeans had an unfilled price gap between 499.25 and 501.00, which was filled last week.
There is an unfilled price gap below the current market price between 455.50 and 487.00.
WHAT DO THE CHARTS LOOK LIKE?
A price breakout has occurred with soybeans closing below their five month trading range of 510.00 to 565.00.
WHAT TRADERS WERE ADVISED TO DO LAST WEEK?
Traders who established short positions at 518.75 were advised to either move their existing stops to 522.50 or exit their position.
If soybeans posted a monthly close below 510.00, traders were advised to either add to their existing short position or establish a short position, placing all stops above the monthly sell signal of 518.75.
If soybeans posted a close below 499.25 - effectively filling the second mentioned gap, traders were advised to either add to their existing short position or establish a short position, placing stops for this position above 503.50.
Soybeans closed Friday at 499.75.
Our objective the gap between 499.25 and 501.00 was met.
WHAT SHOULD TRADERS DO NEXT WEEK?
Traders who have existing short positions from 518.75 should either move stops to 513.00 or purchase March 510 calls.
Traders who have existing short positions from 509.75 should either move stops to 513.00 or purchase March 500 calls.
February 9th is the all-important USDA Crop Production.
For next weeks supply/demand report, traders are looking for ending stocks to be adjusted higher by about 5 million bushels as compared with the January USDA forecast of 435 million bushels.
If after the report soybeans post a close below 498.50, which was last weeks lows, traders are advised to either add to their existing short position or establish a short position, placing all stops above 503.25.
Our objective will be a challenge of 487.00, which were lows posted on 6/20/02.
If soybeans post a weekly close below 487.00, traders are advised to either add to their existing short position or establish a short position, placing all stops above 494.50.
Our long-term objective if soybeans close below 487.00 is 455.50.
On the flip-side...
After the crop report, if soybeans post a close above 510.00, traders are advised to use caution by leaving their calls in place as protection. Remember calls can be exercised if needed to off- set short futures positions.
If soybeans fill the gap between 519.00 and 522.50, traders are advised to establish a long position, placing all stops below 510.00.
Filling the price gap - if it were to occur - would possibly confirm that the extended trading range between 510.00 and 565.00 is still intact.
Our objective will be a challenge of 529.50.
If soybeans were to close above 529.50, traders are advised to either add to their existing long positions or establish a long position, placing all stops below 519.00.
Our objective, if this were to occur, would be 546.50.
DAILY CHART:
http://bohl.minot.com/d_Chart.cgi?S05H
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WEEKLY CHART:
http://bohl.minot.com/w_Chart.cgi?S
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MARCH WHEAT (W5H)
Wheat has been in a eight month price decline which began from highs of 414.50 (5/04/04) to recent lows of 287.00 (2/04/05).
For several weeks I have pointed out that wheat has a reoccurring pattern on the daily charts. Wheat posts a low and consolidates for 4 to 5 weeks and then begins their next price decline. During these weekly cycles they bounce 30-cents before the next price move down, each time posting new lows - about 42-cents from the previous high.
Currently, wheat is about to reach the end of it's cycle - and a new low is due around February 4th - 9th.
Our objective of 270.00 should be the next price target.
Last week traders were advised that if wheat posted a close below 295.00 by the close of business January 31st a 'monthly' sell signal would be posted.
Wheat closed at 291.00 on January 31st.
Wheat has an unfilled price gap above the current market price between 294.00 and 295.00, the monthly sell signal.
Wheat has an unfilled price gap below the current market price between 262.50 and 265.50.
WHAT TRADERS WERE ADVISED TO DO LAST WEEK?
Traders were advised to either move all existing stops to 295.00 - which is the gap, or exit their short positions.
If wheat settled below 295.00 by the close of business January 31st, traders were advised to remain in their short positions, moving their stops above 292.25.
WHAT SHOULD TRADERS DO NEXT WEEK?
Traders who have existing short positions from 303.25 should either move stops to 295.00 or purchase March 290 calls.
Traders who have existing short positions from 294.00 should either move stops to 295.00 or purchase March 290 calls.
After the soybean crop report next week, if wheat posts a close below 287.00, traders are advised to either add to their existing short position or establish a short position, placing all stops above 292.25.
Our objective will be 277.25, which were lows posted on 4/29/03.
If wheat posts a weekly close below 277.25, traders are advised to either add to their existing short position or establish a short position, placing all stops above 287.00.
Our objective will be the gap between 262.50 and 265.50.
On the flip-side...
If wheat fills its gap at 295.00, traders are advised to establish a long position, placing stops below 292.25.
Our first objective will be 299.75.
If wheat posts a weekly close above 299.75, traders are advised to either add to their existing long positions or establish a long position, placing all stops below 295.00.
Our objective will be a challenge of previous highs of 302.00.
DAILY CHART:
http://bohl.minot.com/d_Chart.cgi?W05H
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WEEKLY CHART:
http://bohl.minot.com/w_Chart.cgi?W
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MAY ORANGE JUICE (OJ5K)
Last week I wrote about a 'weekly coil' that had developed in orange juice.
I identified this 'weekly coil' by the trading range form the previous two weeks. Each previous weekly range had constricted... higher lows and lower highs. In effect - what ultimately should occur is an unleashing of the coil which violently propels prices up or down.
Last week juice did exactly what was expected by violently propelling itself ultimately to higher prices.
Juice has been in a eight-week trading range, which began from lows of 80.10 (1/7/05) to highs of 90.15 (12/07/04).
Juice had an unfilled price gap between 87.70 and 88.15, which was effectively filled last week.
Juice has an unfilled price gap below the current market price between 76.95 and 77.10.
Juice has a monthly recommendation for February: buy when trades 90.00 - sell when trades 80.05.
WHAT TRADERS WERE ADVISED TO DO LAST WEEK?
Juice had a weekly recommendation: buy when trades 85.65 - sell when trades 82.25.
If juice posts a weekly buy signal at 85.65, traders were advised to establish a long position, placing stops at 82.25.
If juice trades 86.45, traders were advised to either add to their existing long position or establish a long position, placing stops at 82.25.
Our objective was the gap between 87.70 and 88.15, which was filled last week.
WHAT SHOULD TRADERS DO NEXT WEEK?
If juice trades 87.45, traders are advised to either add to their existing long position or establish a long position, placing all stops below 84.00.
Our objective will be December highs of 90.15.
If juice posts a monthly buy signal at 90.00, traders are advised to either add to their existing long position or establish a long position, placing all stops below 87.45.
Our objective will be a challenge of contract highs of 96.00.
On the flip-side...
If juice posts a close below last weeks lows 82.30, traders are advised to establish a short position, placing stops at 85.65.
If juice trades 81.25, traders are advised to either add to their existing short position or establish a short position, placing stops at 85.65.
Our objective will be a challenge of contract lows for December at 80.05.
If juice posts a month sell signal at 80.00, traders are advised to either add to their existing short position or establish a short position, placing all stops above 81.30.
If juice posts a close below 79.25, traders are advised to either add to their existing short position or establish a short position, placing all stops above 80.10.
Our objective will be the unfilled price gap between 76.95 and 77.10.
DAILY CHART:
http://bohl.minot.com/d_Chart.cgi?OJ05K
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WEEKLY CHART:
http://bohl.minot.com/w_Chart.cgi?OJ
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MARCH JAPANESE YEN (JY5H)
The yen has moved from 'chart watch' to 'Tech Talk' because of a monthly recommendation for February.
The yen has been in a six-week trading range, which began from lows of .9476 (12/10/04) to highs of .9885 (12/02/04).
Until the yen closes below .9476 or above .9885 on a monthly basis, it will probably continue its price consolidation.
WHAT DO THE CHARTS LOOK LIKE?
As mentioned above, the yen is range bound until a monthly close occurs below .9476 or above .9885.
The yen has an unfilled price gap below the current market price between .9445 and .9454.
There was an unusual upward trendline that was broken on Friday.
The trendline began from lows of .9396 (11/11/04) through lows of .9613 (12/10/04), and lows of .9552 (1/07/05), which was broken on Friday at .9622.
Also, notice all the previous lows were around the 10th of each month.
Friday the yen posted a close at .9587.
WHAT SHOULD TRADERS DO NEXT WEEK?
If the yen rallies to .9587, traders are advised to establish a short position, placing stops above .9622.
If the yen posts a monthly sell signal at .9548, traders are to either add to their existing short position or establish a short position, placing stops above .9622.
If the yen posts a close below .9476, traders are advised to either add to their existing short position or establish a short position, placing all stops above the monthly sell signal of .9548.
Our objective will be the unfilled gap between .9445 and .9454.
On the flipside....
If the yen posts a close back over the previously mentioned broken trendline at .9622, traders are advised to establish a long position, placing stops below .9572.
If the yen posts a close above last weeks high of .9706, traders are advised to either add to their existing long position or establish a long position, placing all stops below .9622.
If the yen posts a monthly buy signal at .9874, traders are advised to either add to their existing long position or establish a long position, placing all stops below .9706.
DAILY CHART:
http://bohl.minot.com/d_Chart.cgi?JY05H
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WEEKLY CHART:
http://bohl.minot.com/w_Chart.cgi?JY
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.'
===========================
- NO CHART WATCH THIS WEEK
CURRENT 'MONTHLY' RECOMMENDATIONS
FOR FEBRUARY:
- MARCH TEN YEAR NOTES (TY5H)
- MAY ORANGE JUICE (OJ5K)
- MAY COFFEE (KC5K)
- MARCH JAPANESE YEN (JY5H)
- MARCH CANADIAN DOLLAR (CD5H)
FUTURE WATCH
Future watch will list developing 'monthly' recommendations to watch in February for March use. 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' recommendations will be revealed on the close of business February 28th and sent via email for March use.
Potential 'Monthly' recommendations for March will be posted as the month progresses.
WEEKLY FEATURE
The U.S. economy is expanding - just not as fast as many hoped. The U.S. unemployment rate dropped from 5.4% to 5.2% in January, the lowest in three years, but non-farm payrolls only increased 146,000, less than expected. The Labor Department also deducted 59,000 jobs from the previous three months.
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The March S&P 500 was up Friday at 1,202.00, the highest close in a month, with today's jobs report suggesting that the Federal Reserve may not have to be so aggressive in raising interest rates.
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The University of Michigan's index of consumer confidence dropped from 97.1 to 95.5 in January, less than expected.
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A survey by Reuters said that OPEC-10 production probably fell about 400,000 barrels per day in January, not the one million barrel cut that they agreed to at their December 10th meeting.
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U.S. Federal Reserve Chairman Greenspan told a conference in London that he believes that market forces and efforts to restrain the federal budget will take care of the U.S.'s large trade deficit.
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Manufacturing orders in Germany increased 7.1% in December, much more than expected and the biggest monthly increase in at least 14 years.
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China Says Yuan Not Undervalued
February 6, 2005
BEIJING (Reuters) - China's yuan is not substantially undervalued given the country's balance of payments, but it will manage capital flows with the aim of eventually making the currency convertible on the capital account, China's central bank governor said.
CLICK HERE FOR MORE
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Weather Market Commentary
Friday, February 4, 2005
60-plus degree temperatures were recorded yesterday for Sioux City and Norfolk, and a place like Sioux Falls had a record high with a reading of 58 degrees. If anything, we will see that type of warmth be even more widespread for today. I don't think that you can rule out someone in Nebraska getting to the 70 degree mark for a high temperature on this Friday (which would mean temperatures in excess of 30 or even 35 degrees above normal, and a lot of high temperature records falling). Very few locations all across the Midwest will fail to reach at least the 50 degree mark for tomorrow. Winter then still looks to make a comeback for the end of the weekend and into next week. A lot of rain will fall in the western Corn Belt on Sunday, but by late in the day it will start to mix with or change to snow in northern Nebraska, northwestern Iowa, southern Minnesota, and South Dakota. A lot of rain will probably fall in the Ohio Valley for Monday and Tuesday, but snow will be more widespread during that time in South Dakota, Minnesota, Iowa, Nebraska and northern Kansas and some significant totals look very possible. Impact of all of this? The cattle feedlot areas of the western Corn Belt are looking great through tomorrow, but plenty of precipitation there for Sunday through Tuesday is likely to create very muddy conditions. We all know about how wet the Ohio Valley has been this winter; that area has improved as of late but clearly the rains of Monday and Tuesday are not good news for a soft-red winter wheat crop that has been plagued by too much rain ever since it was planted.
Weather and market report
by Craig Solberg
CLICK HERE FOR MORE
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USDA Drought Monitor
CLICK HERE FOR MORE
FED WATCH
The Fed's Trip to Neutrality Could Use a Roadmap: Caroline Baum
Feb. 4 (Bloomberg) -- We're not sure what the exact destination is, or how we'll recognize it when we get there. We don't know how long it will take, or how fast we'll have to go. All we know is, we're on the right road.
So sayeth the Federal Reserve on Wednesday, when it raised the overnight benchmark rate by a quarter point to 2.5 percent and said policy was still ``accommodative.''
Policy has been ``accommodative'' ever since the Fed started making it less so in June. The central bank has raised the federal funds rate from 1 percent to 2.5 percent in six equal steps.
Economists assess the stance of monetary policy by calculating the real interest rate, or the real cost of borrowing adjusted for inflation. Depending on the choice of inflation measure, the real funds rate is either still negative (the CPI) or slightly positive (the core PCE price index).
For the record, inflation is running at an annual rate of either: 3.3 percent (CPI); 2.9 percent (final sales to domestic purchasers' price index); 2.2 percent (core CPI); 2.4 percent (PCE price index); 1.7 percent (market-based PCE price index); or 1.5 percent (core PCE price index).
It's no surprise that the Fed's preferred inflation measure is the one that portrays inflation in the best possible light.
The argument for choosing any of the PCE measures allowing for substitution (cheaper apples for more expensive pears) is that they capture actual spending patterns. In other words, they're consumer cost-of-living indexes.
CLICK HERE FOR MORE
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Greenspan Says U.S. Twin Deficits May Shrink, Addressing Concern at G-7
Feb. 4 (Bloomberg) -- The dollar's decline and fiscal restraint by the U.S. government may soon begin to reduce the U.S. current account deficit, which stood at a record in the third quarter, Federal Reserve Chairman Alan Greenspan said.
``We may be approaching a point, if we are not already there, at which exporters to the United States, should the dollar decline further, would no longer choose to absorb a further reduction in profit margins,'' Greenspan told the Advancing Enterprise 2005 conference in London today.
``Besides market pressures, which appear poised to stabilize and over the longer run possibly to decrease the U.S. current account deficit and its attendant financing requirements, some forces in the domestic U.S. economy seem about to head in the same direction,'' he said.
One of those forces is increased pressure to cut the U.S. federal budget deficit, which would lower pressure to borrow from abroad, he said. ``The voice of fiscal restraint, barely audible a year ago, has at least partially regained volume.''
Greenspan's comments suggest the dollar's 16 percent drop since February 2002 against a basket of currencies from its 30 largest trading partners is beginning to have an effect on the U.S. current account, the widest measure of trade in goods, services and financial transfers.
CLICK HERE FOR MORE
February 2005 |
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Weekly Reports |
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*** The above dates can change without notice. *** |
NOTE:
If you do not completely understand this information, you are advised to take NO action until speaking with your Account Executive.
ClearTrade, Inc. may be reached, toll free, at 800-493-4444
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* Recommendations and Newsletter prepared by Scott Joss, Non Member C.T.A.
Scott Joss is a 'non member' CTA and is providing recommendations to ClearTrade, Inc. clients. Scott Joss 'is a principal' of ClearTrade, Inc. and 'is a registered IB member' with the NFA.
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DISCLAIMER:
* COMING EVENTS AND DATA RELEASES:
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.
Market recommendations are strictly the opinion of the writer and are intended solely for informative purposes and are 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 herein named. No guarantee of any kind is implied or possible where projections of future conditions are attempted. Futures trading involve substantial risk. In no event should the content of a market letter be construed as a promise that you will profit or that losses can or will be limited in any manner whatsoever.
Unless otherwise indicated, the links presented in this newsletter are in no way affiliated with ClearTrade, Inc. Likewise, sites linked through ClearTrade's newsletter are not necessarily connected with ClearTrade, nor do any such links imply an endorsement by either party.
ClearTrade, Inc. does not necessarily promote or endorse the services or publications described herein. Unless otherwise indicated, ClearTrade Inc. has had 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.
Past results are no indication of future performance. Information provided in this newsletter is intended solely for informative purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.
Scott Joss is a 'non member' CTA and is providing recommendations 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 future conditions are attempted.
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The contents of this newsletter are copyright 1999-2005, Scott R. Joss/ClearTrade, Inc. *TM. All Rights Reserved.