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ClearTrade's veteran Trader Scott Joss will prepare technical analysis in selected market groups when an opportunity presents itself.
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• TECH TALK
•  CHART WATCH 
•  CURRENT 'MONTHLY' RECOMMENDATION
•  FUTURES WATCH
•  WEEKLY FEATURE
•  FED WATCH
•  COMING EVENTS AND DATA RELEASES

 

TECH TALK by Scott R. Joss (Non member C.T.A)*

MARCH SOYBEANS (S5H) 

Soybeans have been in a five month price consolidation between 510.00 (11/05/04) lows and 565.00 (11/23/04) highs.

Until soybeans close below 510.00 or above 565.00 on a monthly basis, they will probably continue their price consolidation.
Last week, soybeans posted an 'intra-weekly' sell signal at 524.25.

For January soybeans have a monthly recommendation: buy when trades 561.25 - sell when trades 518.75.

WHAT DO THE CHARTS LOOK LIKE?

As mentioned above, there's currently price consolidation between lows of 510.00 and highs of 565.00. A price breakout would occur if soybeans were to close above or below their five month trading range.

The daily long-term chart has a descending trendline from past lows that began at 522.00 (10/09/02) through 513.25 (8/07/03), 506.00 (10/12/04) and if touched would intersect at 503.50.

The weekly long-term chart, much like the daily chart, has a descending trendline from past lows that began at lows of 522.00 through 515.25, 506.00 and if touched would intersect at 502.00.

Minor support is between 502.00 and 503.50.

Soybeans have two unfilled price gaps below the current market price: The first between 517.25 and 519.00, the second between 499.25 and 501.00.

Soybeans have two unfilled price gaps above the current market price: The first between 606.00 and 623.00, the second between 690.00 and 696.00.

WHAT SHOULD TRADERS DO?

For January, soybeans have a monthly recommendation: buy when trades 561.25 - sell when trades 518.75.

Major resistance is at 524.25 - last week's sell signal. Aggressive traders should use this resistance level to establish a short position, placing stops above 534.50.

If soybeans post their monthly sell signal at 518.75, traders are advised to establish a short position, placing stops above 534.50.

Conservative traders are advised to purchase March 500 puts, risking 50% of purchase price.

If soybeans post a close below recent lows of 510.00, traders are either to add to their existing short position or establish a short position, placing all stops above the monthly sell signal of 518.75.

Conservative traders are advised to purchase March 490 puts, risking 50% of purchase price.

If soybeans post a close below 499.25, traders are advised to either add to their existing short position or establish a short position, placing all stops above 503.50.

Our first objective will be the gap between 517.25 and 519.00.

Our second objective will be the gap between 499.25 and 501.00.

If soybeans close below 487.00, traders should anticipate a price move down to 455.00.

On the flip-side...

If soybeans post a close above last week's highs of 551.00, traders are advised to watch for a possible monthly buy signal at 561.25.

If soybeans post their monthly buy signal at 561.25, traders are advised to establish a long position, placing stops below 544.00.

Conservative traders are advised to purchase March 560 calls, risking 50% of purchase price.

If soybeans post a close above 565.00, traders are either to add to their existing long position or establish a long position, placing all stops below the monthly sell signal of 561.25.

Our objective will be the gap between 606.00 and 623.00.

DAILY CHART:
http://bohl.minot.com/d_Chart.cgi?S05H
------------
WEEKLY CHART:
http://bohl.minot.com/w_Chart.cgi?SH

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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 292.25 (1/04/05).

Wheat has a reoccurring pattern on the daily charts. They post a low and consolidate for six weeks and then begin their next price decline. During these six week 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 current 6-week cycle - and if history repeats itself, a new low is due.

The high for this past six week cycle was 312.00. If we subtract 42-cents from the high then 270.00 should be the next price target.

On Friday, wheat posted a daily sell signal at 303.25.

For next week wheat has a weekly recommendation: buy when trades 310.75 - sell when trades 297.00.

Also... wheat could possibly post a monthly sell signal if a close below 295.00 were to occur by the close of business January 31st.

WHAT DO THE CHARTS LOOK LIKE?

Currently, we're experiencing a six-week price consolidation between lows of 292.25 and 312.00.

The daily long-term chart has a descending trendline that began from highs of 391.00 (6/01/04) through 341.25 (9/17/04), 312.00 (1/07/05) and if touched would intersect at 308.75.

The weekly long-term chart, much like the daily chart, has a descending trendline that began from highs of 321.00 through 312.00 and if touched would intersect at 307.00.

Major resistance is between 307.00 and 308.75.

Wheat has an unfilled price gap below the current market price between 262.50 and 265.50.

Wheat has an unfilled price gap above the current market price between 325.00 and 326.50.

WHAT SHOULD TRADERS DO?

Wheat has a weekly recommendation: buy when trades 310.75 - sell when trades 297.00.

Minor resistance is at 303.25, which was the daily sell signal. Aggressive traders are advised to use this resistance level to establish a short position, placing stops above 308.75 - the downward trendline.

If wheat posts their weekly sell signal at 297.00, traders are advised to establish a short position, placing stops above 308.75.

Conservative traders are advised to purchase March 290 puts, risking 50% of purchase price.

If wheat post a close below last month's lows of 295.00, traders are either to add to their existing short position or establish a short position, placing all stops above the daily sell signal of 303.25.

If wheat posts a close below recent lows of 292.25, traders are either to add to their existing short position or establish a short position, placing all stops above the weekly sell signal of 297.00.

Conservative traders are advised to purchase March 280 puts, risking 50% of purchase price.

Our objective will be the gap between 262.50 and 265.50.

On the flip-side...

If wheat posts a weekly buy signal at 310.75, traders are advised to establish a long position, placing stops below 303.25.

If wheat posts a close above last month's high of 311.75, traders are either to add to their existing long position or establish a long position, placing all stops below the weekly buy signal of 310.75.

Conservative traders are advised to purchase March 300 calls, risking 50% of purchase price.

If wheat posts a close above 314.00, traders are either to add to their existing long position or establish a long position, placing all stops below the weekly buy signal of 310.75.

Our first objective will be the gap between 325.00 and 326.50

DAILY CHART:
http://bohl.minot.com/d_Chart.cgi?W05H
------------
WEEKLY CHART:
http://bohl.minot.com/w_Chart.cgi?WH

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.'

===========================

MARCH S&P 500 (SP5H) 
March S&P's are listed within the 'chart watch' section because of a possible 'intra-month' sell recommendation for January.
S&P's have been in a ten-week price advance which began from lows of 1091.00 (10/25/04) to highs of 1220.50 (1/03/05).
Most recently, the S&P's have been in a price pullback from highs of 1220.50 to lows of 1176.50.
On 1/03/05, the S&P's posted an 'intra-weekly' sell signal at 1207.20.
WHAT DO THE CHARTS LOOK LIKE?
I previously mentioned that the S&P 500 might possibly post an 'intra-month' sell signal for January - and here's why:
For December the S&P 500 posted a high of 1219.00 (12/30/04) and a low of 1275.70 (12/09/04).
This month the S&P 500 posted a high of 1220.50 (1/03/05) which topped last month's high.
If the S&P were to close on a monthly basis (meaning by the close of business January 31st) below December’s low of 1175.70, a major top would be in place and a monthly sell signal will be posted.
Since a weekly sell signal has been posted at 1207.20, an 'intra- monthly' sell signal at 1175.60 would confirm a top.
If this were to occur, the collective trader's mindset would shift from buying dips to selling rallies.
In my newsletter dated March 30th, 2003, I described to readers that the opposite scenario was about to occur.
A spread 'double bottom' was established and a 'daily', 'weekly' and 'monthly' buy signal was posted - suggesting a bottom was in place.
On 7/24/02, the June S&P 500 traded to lows of 774.90 and again on 10/10/02 they traded to lows of 770.50.
The 'intra-monthly' buy signal was at 861.00.
Our objective was 1164.50 - which we have met. This objective took nearly two years to fulfill.
We are now faced with a similar situation... only in reverse.
Is this the market top?
Only time will tell.
To properly prepare - we must rely on our technical 'expertise.' Remember, I feed-foreword on what might happen... and prepare. Simply put - develop a 'game plan' in case we form a top. No easy task...
WHAT SHOULD TRADERS DO?
If the S&P were to close on a monthly basis below 1175.70, traders are advised to establish a short position - placing stops above 1207.20.
Conservative traders are advised to use the mini S&P as their trading vehicle.
If the S&P were to close below 1171.00, traders are advised to either add to their existing short position or establish a short position, placing stops above 1175.70.
If the S&P were to close below 1161.00, traders are advised to either add to their existing short position or establish a short position, placing stops above 1171.00.
Our first objective will be 1130.90.
Our second objective will be 1103.90.
On the flip side....
If the S&P doesn't close below 1175.70 by the close of business January 31st, a trading range might establish itself for some time.
If this were to occur, traders will be advised to buy against 1175.70 support and sell against the 1207.30 resistance until a signal confirms a breakout of congestion. 
DAILY CHART:
http://bohl.minot.com/d_Chart.cgi?SP05H
------------
WEEKLY CHART:
http://bohl.minot.com/w_Chart.cgi?SP

CURRENT 'MONTHLY' RECOMMENDATIONS
FOR JANUARY:

- MARCH SOYBEANS (S5H)

FUTURE WATCH

Future watch will list developing 'monthly' recommendations to watch in January for February 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 January 31st and sent via email for February use.

- MARCH TEN YEAR NOTES (TY5H)
- MARCH DOW JONES (DJ5H)
- MARCH CRUDE OIL (CL5H)
- MARCH HEATING OIL (HO5H)
- MARCH UNLEADED GAS (HU5H)
- MARCH ORANGE JUICE (OJ5H)
- MAY COFFEE (KC5K)
- MARCH JAPANESE YEN (JY5H)
- MARCH CANADIAN DOLLAR (CD5H)

WEEKLY FEATURE

Long-term weather: Storms through planting, then dry
By Cliff Harris and Randy Mann
Harris-Mann Climatology
Leading long-range weather forecasters Cliff Harris and Randy Mann recently gave Successful Farming magazine the following weather outlook for the coming spring and summer seasons.
This El Nino (warming of Pacific waters) has led to a strengthening of the polar jet stream, they say, which has been responsible for the heavy rains and snows in California, plus the unusual snowfall in the southern U.S. During an El Nino, the sub-tropical jet stream usually strengthens and brings warmer and wetter conditions to the southern states. This time, we've seen freezing temperatures as far south as northern Mexico, a very unusual pattern indeed.
June 6 (new moon) to July 21 (full moon)
If on the back side of a dying El Nino a split flow develops across the nation's midsection by no later than July 8-10, we could see a crop-damaging drought and heat pattern in the U.S. Corn and Soybean Belt by mid-summer. Stay tuned.
http://www.agriculture.com/default.sph/AgNews.class?FNC=topStoryDetail__ANewsindex_html___53133___1
--------------------------------
USDA reports new corn production record set
By Alicia Clancy
Agriculture Online Apprentice
Nat’l Corn Growers Association credits high demand, versatile marketplace
Farmers of America have set a new record.
At 11.8 billion bushels, the 2004 corn harvest was at the largest in history, according to the annual crop production summary released Wednesday by the US Department of Agriculture (USDA). The record setting yields also produced 160.4 bushels per acre on average.
The 2004 crop was 17% larger than the previous record crop in 2003, while yields were 18.2 bushels higher than the previous record of 142.2 bushels per acre also established in 2003.
The 2004 record harvest and demand is indicative of corn's versatility and value, according to Leon Corzine, president of the National Corn Growers Association (NCGA).
Demand for corn also remained strong, according to USDA. This week's supply and demand estimates peg corn use at 10.82 billion bushels, with demand being driven by expanding domestic use. Ethanol production is expected to consume 1.43 billion bushels, or 12.1% of the 2004 crop, while livestock feed remains as the top use of US corn at 6.08 billion bushels. Export use was estimated at 1. 95 billion bushel’s, or 16.5% of the crop.
http://www.agriculture.com/default.sph/AgNews.class?FNC=goDetail__ANewsindex_html___53137___1
--------------------------------
U.S. producer prices were down .7% in December, a bigger drop than expected. Excluding energy, producer prices were up .1%.  
 
---------------------------------
U.S. industrial production was up .8% in December, more than expected. For all of 2004, industrial production was up 4.1%, the biggest gain in four years.  
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St. Louis Federal Reserve Bank President William Poole said that the Fed would raise interest rates faster than the current pace, if they thought it was necessary. The comments were seen as supportive to the U.S. dollar which closed higher against most currencies.      
----------------------------------
The National Oilseed Processors Association said that 143.4 million bushels of soybeans were crushed in December, less than expected.    
----------------------------------
USDA Drought Monitor
http://www.drought.unl.edu/dm/monitor.html

FED WATCH

Fed's Poole Says Investors Must Realize Fannie Mae, Freddie Mac Face Risks
 
Jan. 13 (Bloomberg) -- Fannie Mae and Freddie Mac, the largest U.S. mortgage finance companies, face major business risks and investors should not expect the government to insure against problems, said St. Louis Federal Reserve Bank President William Poole.
``An investor who ignores the risks faced by Fannie Mae and Freddie Mac under the assumption that a federal bailout is certain should there be a problem is making a mistake,'' Poole, 67, told the St. Louis Society of Financial Analysts today.
Government sponsored enterprises in the mortgage market, particularly Fannie Mae and Freddie Mac, expose the U.S. economy to ``substantial risk,'' Poole said, reiterating a statement he made more than a year ago. The lenders face five main types of risk, he said: credit, prepayment, interest rates, liquidity, and operations.
Fannie Mae, the largest buyer of U.S. mortgages, fired Chief Executive Franklin Raines in December after the Securities and Exchange Commission said the Washington-based company broke accounting rules.
The smaller Freddie Mac ousted its three top executives, including Chairman and Chief Executive Leland Brendsel, in 2003 after uncovering accounting errors that caused the company to restate earnings by about $5 billion for the previous three years.
 
http://www.bloomberg.com/news/economy/fedwatch.html

 

 

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

====================================

* Recommendations and Newsletter prepared by Scott Joss, Non Member NFA 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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====================================

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* 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.

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