WELCOME TO THE JOSS REPORT - WEEKLY TRADE ADVISOR
The Joss Report trading recommendations and weekly trade advisor was first published in October 1998. Since that time, the Joss Report research has continued to evolve into an important source of technical insight for many traders. Our goal is to provide traders with a 'trading plan' to prepare for the trading day and week ahead.
ClearTrade's own technical analyst, Scott Joss*, is a veteran futures trader with twenty-eight years experience on and off the trading floor - as a technical analyst, pit trader, account executive handling arbitrage for Smith Barney, former member of the CBOT, non-member CTA and presently an IB. Scott prepares technical analysis in selected market groups when an opportunity presents itself and not only develops 'trading modules' on selected trading opportunities but 'feeds-forward', advising traders what to expect and how to react.
 At ClearTrade, we think it’s helpful to speak directly with traders who have requested The Joss Report research and may be interested in establishing an account with us. Understanding your trading needs and goals is important. And we think you should have an opportunity to get to know who we are and what we offer on a one to one basis.
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The Joss Report Weekly Trade Advisor should be used in conjunction with the Joss Report Daily Recommendations, Weekly Recommendations and Monthly Recommendations.

The Joss Report Archived Weekly Trade Advisor 2005
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• TECH TALK - SUGAR  - SOYBEANS - SILVER - CRUDE OIL - EURO-CURRENCY - U.S. CASH DOLLAR - US 30-YEAR BOND - S&P 500 
•  CHART WATCH - COTTON - COCOA - YEN
•  CURRENT 'MONTHLY' RECOMMENDATIONS
•  FUTURES WATCH
•  COMING EVENTS AND DATA RELEASES

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

 
MARCH SUGAR (SB6H)
Recently, several traders asked me if March sugar would come under pressure now that it’s front month. In past years, spreaders have traditionally pressured the front month of sugar.  What does this mean? Let’s take as an example of the most recent spread that just ended - October Sugar vs. March Sugar. The spread or difference between the two contract prices moved anywhere from minus 62 to plus 10 (October vs. March prices) in a three month period. That’s 72 points - or $806.40 per spread.
Spreaders undoubtedly contribute to much of the volume that is traded in sugar. What spreaders attempt to do - either on a daily, weekly or monthly basis - is profit between the differential of various months traded.
What benefit would spreading be to a trader?
I first began my career in 1977 at the CBOT working for one of the most successful soybean oil spreaders in that pit. My only function was to keep track of the spreads or differentials between the many months on the trading board that my boss/mentor - and now friend traded. At first, this process was overwhelming- and at times quite fast-paced and confusing. However, after many years working with this trader, I began to understand how he went about becoming a successful trader.
The thought process in spreading is unlike trading out-right futures. Most small speculators trade with the idea that either prices move up or they move down. The only protection they have is a stop loss placed above the market or below the market. Spreaders couldn’t care less if prices move one way or the other.
What they do care about is the difference - or relationship between the various months that are traded on the ticker board. If soybean oil prices moved higher and retail paper came in to buy, my ’mentor’ mentally knew in a split second that if he sold into the retail paper on the offer that he could either buy a back month or have already purchased a back month to offset any short position.
Here’s the tricky part of spreading: How do you know which month to buy?
First, you must know where the corresponding spread differential relationships have been over a period of time and compare where these spreads traditionally go. Every June, my old boss put on his favorite spread - which was selling July soybean oil and buying the December soybean oil. Why?
He knew from experience that generally, the spread differential of this particular spread would move in his favor. Since traditionally July soybean oil prices would rise at that time of year, he knew that December soybean oil prices would rise at a faster rate. He accommodated buyers in the July contract by first buying the December contract and then selling the July contract. This is called legging a spread.
He always put the least traded month on first, in this case December, because he knew there would be plenty of paper to sell in the front month, in this case July. As he legged spreads, my job was to keep track of how many back months he was long, be it October, December, or red March -  and how many front months he was short July or August (rarely did he trade the September contract). Sound easy? Not when you lose track of your longs vs. short positions, which you need to know at all times to continue this process.
At the end of the day, he may have accumulated several hundred of these spreads - which he then could either unwind himself by reversing the previously mentioned process- or exit these spreads via the spread broker.
If the spreads moved 40 points in his favor times $6 a point that would equal $240
$240 times several hundred spreads… Well, you do the math.
What did he accomplish as a spreader? First, he lowered his margin requirement. Outright futures margins could be five times that of a spread. Second, he limited or hedged his risk. Third, he didn’t have to be a market timer and guess which direction the market will move. His risks lay in either a miscount of long vs. short by month or the differential relationship between months he had bought and sold moving against him. If this occurred, he had several options to protect himself;  lifting a leg, which would skew his position long or short, or add another month into the mix -  be it long or short, thus placing his spreads in a more neutral butterfly spread.
He retired quite comfortably in 1987 at age 60.
Let’s analyze where March Sugar vs. May Sugar spread has been for the last 500-days.
1) The spread on 6/30/04 began at a deferential that was even and moved to a deferential of March plus 15 points over May by the end of January of 2005.
2) The spread then went from plus 15 points and dipped to minus 1 point by the middle of May 2005.
3) From minus 1 point the spread went to plus 33 points by the end of August.
4) Currently, the spread differential between March and July is plus 2 points.
Traders can view the March vs. May spread chart here.             
   
All traders can go by is past performance in order to judge the spread differentials of these two months and to try to answer the question that was first posed in the opening of this piece: Will March Sugar be pressured by May or any other back month?
If I use the following facts…. that the lowest the spread differential has been in 500-days was minus 1 vs. March Sugar and May Sugar - and the highest differential was plus 33, then my assumption is that March will not be under pressure in coming weeks due to it being front month. Either March Sugar is under- valued or May Sugar is over-valued. 
 
Each week I stress to traders that the Sugar ‘trading modules’ I develop are long-term trades that may span a year or more to achieve. Because of the possible length of the trade, traders have been advised to establish long positions in March 2006 futures and options, then rolling forward as time approaches.
My belief technically and fundamentally is that sugar prices will go much higher - not only in the short-term but in years to come - based on two very bullish ’W’ formations. These ’W’ formations have developed on the daily, weekly and monthly charts. 
The long positions in Sugar were based originally on daily, weekly and monthly trade signals from the July 2005 contract, then the October 2005 contract - and now, the March 2006 contract.
The ‘Commitment of Traders’ report - published each Friday - indicated that the change in open interest last week decreased -26,839, posting a total open interest of 460,099 contracts. 
Last week I described several indicators that might have an impact on Sugar prices.
1) Expiration of the October futures contract.
2) On 9/28/05, Thailand would have their second auction of 200,000 to 300,000 metric tons of sugar for delivery in 2005-06.
3) Damage assessment will begin for sugar cane crops.
Were these factors a precursor to a short-term price correction or a major price advance?
I reminded traders that a similar scenario had occurred when the July Sugar contract headed into its last trading day in which traders were concerned about open interest. However, days after July Sugar went off the board, October Sugar prices soared 1.35 before retracing back down .85. Once this retracement was accomplished, Sugar prices again advanced 1.70. 
Will this scenario again be revisited?
As is the case in futures, traders are advised to prepare for the worst…. a temporary price correction, and anticipate the best… a continuation of an upward price surge.
Remember, technically sugar has a very powerful bullish ‘W’ formation on the daily, weekly and monthly charts. All price corrections should be short lived and shallow, between 60 and 85 points. Why? Because sugar has a tightening domestic demand-supply balance. Estimates of output for the 2005-06 sugar season (October-September) vary widely.  Last Friday’s Sugar and Sweeteners Outlook revealed some interesting facts.
1) Sugar beet production has fallen due to weather conditions in the northerly states.
2) The U.S. Sugar stocks continue to decline.
3) As reported in the USDA report:
With 2 months of data remaining, USDA estimates FY 2005 deliveries for domestic food and beverage use at 9.875 million STRV. The USDA projects FY 2006 sugar deliveries for food and beverage use at 9.950 million STRV. The USDA estimates FY 2005 ending stocks at 1.528 million STRV, implying an ending stocks-to-use ratio of 14.86 percent. For FY 2006, ending stocks are projected at 1.014 million STRV, implying an ending stocks-to-use ratio of 9.83 percent. The last time the ending stocks-to-use ratio was below this forecast level was in FY 1974 when the ratio was 8.83 percent.
4) In a report last week, Agriculture Commissioner Bob Odom says that sugar cane and cotton probably will take the worst of the blow from Hurricanes Katrina and Rita among the state's row crops.
In a Sunday report from The Daily Advertiser in Louisiana, there are continuing concerns.
There are two words that hundreds of sugar cane farmers in South Louisiana want to avoid saying: total loss.
Thousands of acres of crops remain inundated with not inches but feet of floodwaters brought by Hurricane Rita, but the standing water in the crops isn't rainwater. Rita didn't drop thousands of gallons of rain - this is water from the Gulf of Mexico, churned in Rita's wake and pushed inland.
It's saltwater, and it's killing a little more of the plant every second it sits there - and it's been here for a week now.
"All this was freshly planted cane," said M.A. Patout and Son Ltd. General Manager Craig Caillier, waving his hand over the lake created by Rita. "This was supposed to be here for four years. I don't know if we'll ever get it back."
WHAT DOES THE MARCH SUGAR CHART LOOK LIKE?
Last week I posed two technical formations that needed watching.
One was short-term bearish, which was a possible ‘V’ top formation that might have indicated March Sugar was entering a period of consolidation.
The other formation was bullish, which was a downside exhaustion tail that was posted early the week before.  
 
March Sugar has been in a multi-year price advance, which began from lows of 6.12 (2/13/04) to recent highs of 11.33 (9/30/05).
March Sugar has eight unfilled price gaps above the current market price - which are listed here.
March Sugar has five unfilled price gaps below the current market price. The most recent unfilled price gap is between 10.21 and 10.23. The next unfilled price gap is between 9.96 and 10.00.
For sixteen-weeks, March Sugar has closed above its 40-day moving average and 50-day moving average - which as of Friday was at 10.48 and 10.58, respectively.
March Sugar closed Friday at 11.23, which is above its 100-day moving average of 9.75 and its 200-day moving average of 9.33.
Below are the most recent trade signals Sugar has posted.
On 8/24/05, March Sugar posted a weekly buy signal at 10.18.
On 8/29/05, March Sugar posted a daily buy signal at 10.22.
On 9/06/05, March Sugar posted a daily buy signal at 10.70.
On 9/15/05, March Sugar posted a ‘Coil’ daily buy signal at 10.83.
On 9/20/05, March Sugar posted a daily sell signal at 10.75.
On 9/23/05, March Sugar posted a daily buy signal at 10.70.
On 9/30/05, March Sugar posted a daily buy signal at 11.30.
WHAT WERE FUTURES TRADERS ADVISED TO DO LAST WEEK?
Aggressive traders who re-established 50% of their long futures positions on the daily buy signal of 10.70 were advised to place stops for this position below 10.31.
#1) If March Sugar first posted a higher high than the previous week’s high of 10.90 and posted a monthly close above recent contract highs of 10.94, aggressive futures traders were advised to either add to their existing long position or establish a long position.
If ‘trading module’ #1 was activated, aggressive traders were advised to place stops at 10.30. (Traders and their account executives were asked to discuss this suggested stop).
#2) If March Sugar posted a monthly close above 11.16, aggressive futures traders were advised to either add to their existing long positions or establish a long position.
If trading module #2 were to occur, traders who either added to their existing long position or established a long position at 11.16 were advised to place stops for this position only below 10.90. (Traders and their account executives were asked to discuss this suggested stop).
Our next objective would be the first unfilled price gap between 11.72 and 11.80.  
WHAT WERE OPTIONS TRADERS ADVISED TO DO LAST WEEK?
Options traders who to re-established 50% of their 110 and 120 call positions on the daily buy signal of 10.70 were advised to risk 50% of their purchased price.
5) If March Sugar first posted a higher high than the previous week’s high of 10.90 and posted a monthly close above recent contract highs of 10.94, option traders were advised to either add to their existing March 120 call positions or purchase March 120 calls.
If ‘trading module’ #5 was activated, options traders were advised to risk 50% of their purchased price. (Traders and their account executives were asked to discuss this suggested risk).
6) If March Sugar posted a monthly close above 11.16, options traders were advised to either add to their existing 120 call positions or purchase 120 March calls.
If ‘trading module’ #6 was activated, options traders were advised to risk 50% of their purchased price. (Traders and their account executives were asked to discuss this suggested risk).
Our next objective would be the first unfilled price gap between 11.72 and 11.80. 
WHAT ARE FUTURES TRADERS ADVISED TO DO NEXT WEEK?
Aggressive traders who re-established 50% of their long futures positions on the daily buy signal of 10.70 are advised to leave stops for this position below 10.31.
Aggressive futures traders who either added to their existing long position or established a long position on a higher high than the previous week’s high of 10.90 and monthly close above recent contract highs of 10.94 are advised to place stops for this position below 10.48.
Aggressive futures traders who either added to their existing long position or established a long position on a monthly close above 11.16 are advised to place stops for this position below 10.48.
Below are possible ‘trading modules’ for futures traders to consider next week.
# 1) If March Sugar first posts a higher high than last week’s and last month’s high of 11.33, aggressive traders are advised to either add to their existing long positions or establish a long position.
If trading module # 1 is activated, aggressive traders are advised to place stops below 10.48. (Traders and their account executives need to discuss this suggested stop).
Our next objective will be a challenge of old highs and the middle of the second ‘W’ at 11.40.
# 2) If March Sugar posts multiple closes above 11.40, aggressive futures traders are advised to either add to their existing long positions or establish a long position.
If trading module # 2 were to occur, traders who either added to their existing long position or established a long position at multiple closes above 11.40 are advised to place stops for this position only below 10.90. (Traders and their account executives need to discuss this suggested stop).
Our next objective will be the first unfilled price gap between 11.72 and 11.80.  
# 3) If March Sugar posts a weekly close above 11.80, traders are not advised to add to their existing long positions.
If trading module # 3 were to occur, traders who either added to their existing long position or established a long position for the last several weeks are advised to place stops for all positions below 10.90. (Traders and their account executives need to discuss this suggested stop). For the time being, traders should let the market do the work for them.
# 4) If March Sugar first posts a higher high than last week’s high of 11.33 and posts a higher high than last month’s high of 11.33 - yet reverses, aggressive futures traders are advised to view their long positions with an air of caution. Support is at 10.90.
If trading module # 4 were to occur, aggressive futures traders are advised to either add to their existing long position or establish a long position against support at 10.90, placing stops below 10.48. (Traders and their account executives need to discuss this suggested stop).
# 5) If March Sugar first pulls back in price to support at 10.90, which is the trendline from the ‘V’ formation previously mentioned, aggressive traders are advised to either add to their existing long position or establish a long position.
If trading module # 5 were to occur, aggressive futures traders are advised to place stops below 10.48. (Traders and their account executives need to discuss this suggested stop).
# 6) If March Sugar were to first post a higher high than last week’s and last month’s high of 11.33 - yet reverses, posting a weekly close below 10.82 , aggressive futures traders are advised to view their long positions with an air of caution.
If trading module # 6 were to occur, aggressive futures traders are advised to prepare for a possible assault on the weekly sell signal at 10.53.
If trading module # 6 were to occur, and posted a weekly close below 10.53, aggressive futures traders are advised to prepare for a possible all out attack on the monthly sell signal at 10.31. If this were to occur aggressive futures traders will have been stopped out of their established long positions and are advised to sit on the sidelines and wait for another trading opportunity.
WHAT ARE OPTION TRADERS ADVISED TO DO NEXT WEEK?
Options traders who established their March 110 and 120 call positions on the daily buy signal of 10.70 are advised to risk 50% of their purchased price. (Traders and their account executives need to discuss this suggested risk).
Options traders who either added to their existing March 120 call position on a higher high than the previous week’s high of 10.90 and monthly high of 10.94 are advised to risk 50% of their purchase price. (Traders and their account executives need to discuss this suggested risk).
Options traders who added to their existing March 120 call position on a monthly close above 11.16 are advised to risk 50% of their purchase price. (Traders and their account executives need to discuss this suggested risk).
Below are possible ‘trading modules’ for option traders to consider next week.
# 7) If March Sugar first posts a higher high than last week’s and last month’s high of 11.33, options traders are advised to either add to their existing March 120 call positions or purchase March 130 calls.
If trading module # 7 is activated, options traders are advised to risk 50% of purchase price. (Traders and their account executives need to discuss this suggested risk).
Our next objective will be a challenge of old highs and the middle of the second ‘W’ at 11.40.
# 8) If March Sugar posts multiple closes above 11.40, options traders are advised to either add to their existing March 130 call position or purchase March 130 calls.
If trading module # 8 were to occur, option traders who either added to their existing March 130 call position or purchased March 130 calls at multiple closes above 11.40 are advised to risk 50% of purchase price. (Traders and their account executives need to discuss this suggested risk).
Our next objective will be the first unfilled price gap between 11.72 and 11.80.  
# 9) If March Sugar posts a weekly close above 11.80, option traders are not advised to add to their existing March 120 and 130 call positions.
If trading module # 9 were to occur, option traders who either added to their existing call positions or established call positions for the last several weeks are advised to risk 50% of current market value. (Traders and their account executives need to discuss this suggested risk). For the time being, options traders should let the market do the work for them.
# 10) If March Sugar first posts a higher high than last week’s high of 11.33 and posts a higher high than last month’s high of 11.33 - yet reverses, options traders are advised to view their March call positions with an air of caution. Support is at 10.90.
If trading module # 10 were to occur, options traders are advised to either add to their existing March 120 call positions or purchase March 120 calls against support at 10.90, risking 50% of purchase price. (Traders and their account executives need to discuss this suggested risk).
# 11) If March Sugar first pulls back in price to support at 10.90, which is the trendline from the ‘V’ formation previously mentioned, option traders are advised to either add to their existing March 120 call position or purchase March 120 calls.
If trading module # 11 were to occur, options traders are advised to either add to their existing March 120 calls or purchase March 120 calls risking 50% of purchase price. (Traders and their account executives need to discuss this suggested risk).
# 12) If March Sugar were to first post a higher high than last week’s and last month’s high of 11.33 - yet reverses, posting a weekly close below 10.82 , options traders are advised to view their March call positions with an air of caution.
If trading module # 12 were to occur, options traders are advised to prepare for a possible assault on the weekly sell signal at 10.53.
If trading module # 12 were to occur, and posted a weekly close below 10.53, options traders are advised to prepare for a possible all out attack on the monthly sell signal at 10.31. If this were to occur, option traders will have exited their established March call positions on the 50% strategy rule and are advised to sit on the sidelines and wait for another trading opportunity.
Each week I will continue to post Sugar’s past unfilled price gaps above the current market price so we can reference them quickly if the need presents itself. Please view past upside gaps here.
For weeks, I’ve described some Sugar option facts and will continue to provide updated information:
Last week Sugar options for a two-year ‘implied volatility’ average were ranked number 18 out of 45 - this week 6 out of 45 .
6) Sugar (SB) High 42.12% - Low 18.90% - 31.74%
Last week Sugar options for a one-year ‘implied volatility’ average were ranked number 12 out of 45 - this week 2 out of 45
2) Sugar (SB) High 33.54% - Low 18.90% - Current 31.74%
Last week Sugar options for a six-month ‘implied volatility’ average were ranked number 12 out of 45 - this week 3 out of 45 .
3) Sugar (SB) High 27.18% - Low 18.90% - 31.74%
DAILY CHART MARCH SUGAR:
http://bohl.minot.com/d_Chart.cgi?SB06H
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WEEKLY CHART:
http://bohl.minot.com/w_Chart.cgi?SB
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DECEMBER CRUDE OIL (CL5Z)
Last week I began a discussion of a possible bearish ‘head and shoulders’ top developing for November Crude Oil and a possible monthly recommendation for the month of October. Traders were advised to wait until either a close below the neckline occurred or a monthly recommendation developed before establishing a position.  
This week I will begin developing a trading module for December Crude Oil because of a monthly recommendation for October. My belief is that traders will need to center on the December contract because of the upcoming last trading day for November Crude Oil on 10/20/05.
In October, December Crude has a monthly recommendation: buy when trades 70.31 - sell when trades 63.44.
I will not center on the possible ‘head and shoulders’ top because it appears too skewed at this point - however, I will center on the monthly recommendation. 
December Crude has been in a multi-year price advance, which began from lows of 20.14 (2/22/02) to recent highs of 70.80 (8/30/05).
Crude began its current price advance from lows of 58.30 (7/21/05) to recent highs of 70.80.
Currently, Crude has been in a trading range between lows of 63.00 and highs of 70.80.
December Crude has one unfilled price gap above the current market price on a 60-minute chart between 69.85 and 69.95 - and no price gaps above the current market price on the daily chart.
December Crude has many unfilled price gaps below the current market price. The first unfilled price gap is between 64.15 and 64.65. The second unfilled price gap is between 62.85 and 63.00. The third unfilled price gap is between 53.60 and 53.85.
On Friday, Crude closed below its 40-day moving average at 66.65 - and above its 50-day moving average of 65.78.
December Crude closed Friday at 66.23, which is above its 100-day moving average of 61.67 and its 200-day moving average of 55.77.
Until Crude posts a close below 63.00 or above 70.80, aggressive traders are advised to sit on the sidelines.
This product is not for the inexperienced trader or the faint of heart.
Traders are not to exceed the rule of thumb - 9% of equity to risk ratio. The proposed risk for the Crude contract will be $6,870 - and $3,680 for the mini crude contract.
That means traders should have an account size of $65,000 for the big Crude contract and $35,000 for the mini contract.
Below are possible ‘trading modules’ for futures traders to consider next week.
# 1) If Crude first posts a higher high than last week’s high of 67.40, aggressive traders are advised to place resting sell stop orders at 63.44.
If trading module #1 were activated, aggressive traders will have established a short position. Traders are advised to place stops at 70.31. (Traders and their account executives need to discuss this suggested stop).
Conservative futures traders are advised to use the electronic mini crude contract as their trading vehicle.
Options traders are advised to purchase December 6000 puts, risking 70% of purchase value. (Traders and their account executives need to discuss this suggested risk).
# 2) If Crude activates trading module # 1 and posts a close below 63.00, aggressive traders are advised to either add to their existing short position or establish a short position.
If trading module # 2 were activated, aggressive traders are advised to place stops for this position only above 67.40. (Traders and their account executives need to discuss this suggested stop).
Conservative futures traders are advised to use the electronic mini crude contract as their trading vehicle.
Options traders are advised to purchase December 6000 puts, risking 70% of purchase value. (Traders and their account executives need to discuss this suggested risk).
# 3) If Crude posts a weekly close below 62.35, which were highs in June, aggressive traders are advised to either add to their existing short position or establish a short position.
If trading module # 3 were activated, aggressive traders are advised to move all stops above 67.40. (Traders and their account executives need to discuss this suggested stop).
Conservative futures traders are advised to use the electronic mini crude contract as their trading vehicle.
Options traders are advised to purchase December 5800 puts, risking 70% of purchase value. (Traders and their account executives need to discuss this suggested risk).
# 4) If Crude posts a close below 59.55, which were lows for Crude in July, aggressive traders are advised to either add to their existing short position or establish a short position.
If trading module # 4 were activated, aggressive traders are advised to move all stops above 63.44. (Traders and their account executives need to discuss this suggested stop).
Conservative futures traders are advised to use the electronic mini crude contract as their trading vehicle.
Options traders are advised to purchase December 5600 puts, risking 70% of purchase value. (Traders and their account executives need to discuss this suggested risk).
# 5) If Crude first posts a monthly sell signal at 63.44, aggressive traders are advised to wait for a close below 63.00 before establishing a short position.
If trading module # 5 were activated, aggressive traders are advised to place stops above 67.40. (Traders and their account executives need to discuss this suggested stop).
Conservative futures traders are advised to use the electronic mini crude contract as their trading vehicle.
Options traders are advised to purchase December 6000 puts, risking 70% of purchase value. (Traders and their account executives need to discuss this suggested risk).
Traders are to continue to follow trading modules # 3 and # 4.
Our objective will be 56.57.
# 6) If Crude Oil first posts a monthly sell signal at 63.44 - yet reverses, aggressive traders are advised to place resting buy stop orders above the market at 67.41. 
If trading module # 6 were activated, aggressive traders will have established a long position. Traders are advised to place stops at 63.44. (Traders and their account executives need to discuss this suggested stop).
Conservative futures traders are advised to use the electronic mini crude contract as their trading vehicle.
Options traders are advised to purchase December 7200 calls, risking 70% of purchase value. (Traders and their account executives need to discuss this suggested risk).
# 7)  If Crude activates trading module # 6, aggressive traders are advised to place resting buy orders at the monthly buy signal at 70.31.
If trading module # 7 were activated, aggressive traders will have either added to their existing long position or established a long position. Traders are advised to place stops at 63.44. (Traders and their account executives need to discuss this suggested stop).
Conservative futures traders are advised to use the electronic mini crude contract as their trading vehicle.
Options traders are advised to purchase December 7400 calls, risking 70% of purchase value. (Traders and their account executives need to discuss this suggested risk).
# 8) If Crude posts a weekly close above 70.80, aggressive traders are advised to either add to their existing long position or establish a long position.
If trading module # 8 were activated, aggressive traders will have either added to their existing long position or established a long position. Traders are advised to place stops all stops below at 67.40. (Traders and their account executives need to discuss this suggested stop).
Conservative futures traders are advised to use the electronic mini crude contract as their trading vehicle.
Options traders are advised to not purchase more option calls but should only risk 50% of current market value. (Traders and their account executives need to discuss this suggested risk).
# 9) If Crude first posts a monthly buy signal at 70.31, aggressive traders are advised to wait for a close above 70.80 before establishing a long position.
If trading module # 9 were activated, aggressive traders are advised to place stops at 63.44. (Traders and their account executives need to discuss this suggested stop).
Conservative futures traders are advised to use the electronic mini crude contract as their trading vehicle.
Options traders are advised to purchase December 7200 calls, risking 70% of purchase value. (Traders and their account executives need to discuss this suggested risk).
Our objective will be 77.18.
DAILY CHART:
http://www.bohl.minot.com/d_Chart.cgi?CL05Z
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WEEKLY CHART:
http://bohl.minot.com/w_Chart.cgi?CL
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CASH U.S. DOLLAR (DXY$Y)
In the August 28th Joss Report, I added the U.S. Dollar and Cash U.S. Dollar to ‘Chart Watch’.
This week U.S. Dollar will move to ‘Tech Talk' because of a possible bullish ‘head and shoulders’ bottom formation on the long-term weekly, monthly charts and an 'intra-monthly' buy signal that was posted at 89.50 on Friday's close.
The Euro-Currency has been added at the end of the U.S. Dollar piece because of a confirmed 'intra-monthly' sell signal at 1.2195 on Friday's close.
Several week's ago, I wrote that traders should focus on the Cash Dollar chart because the rollovers that occur in the futures Dollar chart every three-months might confuse traders. The Cash Dollar is one continuous chart that makes it easier to identify with over a long period of time.
Last week I stated that if the Cash U.S. Dollar could post a monthly close at or above 89.44, this would constitute a continuation pattern conducive with higher prices.
Conversely, I noted to currency traders that the Euro-Currency (FX) and the Swiss Franc had already posted ’intra-monthly’ sell signals.
Friday, the Cash U.S. Dollar closed the month with an ‘intra-weekly’ buy signal that should constitute a resumption of the current up trend and further the development of the bullish ‘head and shoulders‘ bottom formation.
WHAT DOES THE U.S. DOLLAR CHART LOOK LIKE?
The U.S. Dollar futures and the Cash U.S. Dollar may be forming a ‘head and shoulders’ bottom on the daily, weekly and monthly charts.
THE DAILY CHART:
The Cash U.S. Dollar daily chart shows the ‘left’ shoulder was developed between 92.25 highs (5/13/04) to lows of 87.00 (7/19/04).
The daily chart shows the ‘head’ with a ‘W’ formation was established between 80.42 lows and 86.93 highs, with the middle of the ‘W’ at 85.44.
The daily chart shows the current development of the ‘right’ shoulder between highs of 90.77 and lows of 86.02.
THE WEEKLY CHART:
The weekly chart gives support to the daily cash chart.
The weekly chart shows the ‘left’ shoulder developed between 87.02 lows and 92.29 highs.
The ‘head’ with a ‘W’ formation was established between 80.39 lows and 86.93 highs.
The ‘right’ shoulder is developing between 90.77 highs and 86.02 lows.
The all-important ‘neckline’ breakout is at 90.48 if touched today.
THE MONTHLY CHART:
The monthly cash Dollar chart supports the daily and weekly charts.
The monthly chart shows the ‘left’ shoulder developed between 87.02 lows and 92.29 highs.
The ‘head’ with a ‘W’ formation was established between 80.39 lows and 87.82 highs.
The ‘right’ shoulder is developing between 90.77 highs and 86.02 lows.
The all-important ‘neckline’ breakout is at 90.66 if touched today.
WHAT DOES ALL OF THIS MEAN?
It appears that the U.S. Dollar may be forming a long-term bottom, which may take between two to four- months to develop.
Once the formation is complete, our objective will be 102.16.
On the close of business September 30th the Euro-Currency (FX) (EC5Z) posted an ‘intra-monthly’ sell signal at 1.2195. This constitutes a continuation pattern to the downside.
WHAT SHOULD EURO-CURRENCY TRADERS DO NEXT WEEK?
This product is extremely volatile and should only be traded by aggressive traders.
This was not for the inexperienced trader or the faint of heart.
Traders should have an equity to risk ratio of no more than 10% to trade this product. The proposed risk to trade this product is $1,487.50.
That means traders should have an account size of $14,000 per contract to trade this product.
If you do not fit this profile, I suggest that traders consult their account executive and consider an options strategy.
Below are possible ‘trading modules’ for futures traders to consider next week:
# 1) If the Euro-Currency first posts a lower low than last week’s low and last month’s low at 1.2023, aggressive traders are advised to establish a short position.
If this were to occur, aggressive traders are advised to place stops above 1.2142, which was last week’s high. (Traders and their account executives need to discuss this suggested stop).
# 2) If the Euro posts multiple closes below recent lows of 1.1944, aggressive traders are advised to either add to their existing short position or establish a short position.
 If this were to occur, aggressive traders are advised to place all stops above 1.2023. (Traders and their account executives need to discuss this suggested stop).
# 3) If the Euro-Currency first posts a higher high than last week’s high at 1.2142, aggressive traders are advised to establish a long position.
If this were to occur, aggressive traders are advised to place stop and reverse orders at 1.2023, which was last week’s and last month’s low. (Traders and their account executives need to discuss this suggested stop).
# 4) If the Euro posts multiple closes above recent highs of 1.2322, aggressive traders are advised to either add to their existing long position or establish a long position.
 If this were to occur, aggressive traders are advised to place all stops below 1.2224. (Traders and their account executives need to discuss this suggested stop).
WHAT SHOULD OPTION CURRENCY TRADERS DO NEXT WEEK?
# 1) If the Euro-Currency first posts a lower low than last week’s low and last month’s low at 1.2023, option traders are advised to purchase December 116 puts.
If this were to occur, option traders are advised to risk 100% of purchase price. (Traders and their account executives need to discuss this suggested stop).
# 2) If the Euro posts multiple closes below recent lows of 1.1944, option traders are advised to either add to their existing December 116 puts or purchase December 116 puts.
 If this were to occur, options traders are advised to risk 70% of purchase price. (Traders and their account executives need to discuss this suggested stop).
Our first objective will be 1.1926.
# 3) If the Euro-Currency first posts a higher high than last week’s high at 1.2142, option traders are advised to purchase December 125 calls.
If this were to occur, option traders are advised to risk 100% of purchase price. (Traders and their account executives need to discuss this suggested stop).
Our first objective will be 1.2239.
# 4) If the Euro posts multiple closes above recent highs of 1.2322, option traders are advised to either add to their existing 125 calls or purchase 125 December calls.
 If this were to occur, option traders are advised to risk 70% of purchase price. (Traders and their account executives need to discuss this suggested stop).
DAILY CHART:
http://www.bohl.minot.com/d_Chart.cgi?DX05Z
------------
WEEKLY CHART:
http://bohl.minot.com/w_Chart.cgi?DX
----------------------------------------------------
DECEMBER US 30-YEAR BOND (US5Z)
This week I will begin developing a ‘trading module’ for the December U.S. 30-year Bond because of a weekly recommendation for next week.
December Bonds have been in a multi-year price advance between lows of 89-01 (1/31/01) and highs of 124-10 (6/30/03).
Recently, Bonds have been in a two and a half year trading range between lows of 103-02 and highs of 119-30.
Currently, Bonds have been in a five-month trading range between lows of 113-11 and highs of 119-00.
Bond’s 40-day moving average and 50-day moving average is at 115-22 and 115-16, respectively.
Bond’s 100-day moving average and 200-day moving average is at 116-01 and 113-27, respectively.
Note: This product is extremely volatile and should only be traded by aggressive traders. This is not for the inexperienced trader or the faint of heart.
Clients are being cautioned that they should have an equity to risk ratio of no more than 9% to trade this product.
The weekly recommendation for December 30-year Bonds next week: buy when trades 115-14 - sell when trades 114-06.
The weekly recommendation has a risk of $1,250. That means traders should have an account size of $11,000 per contract to trade this product.
If you do not fit this profile, I suggest that traders consult their account executive and consider an options strategy.
Bonds have one unfilled price gap above the current market price between 116-31 and 117-01.
Bonds have several unfilled price gaps below the current market price. The most recent is between 113-12 and 113-06.
WHAT DOES THE 30-YEAR BOND CHART LOOK LIKE?
Recently, December Bonds have been in an extended trading range between lows of 113-11 and highs of 118-10.
The Bond chart may be forming a bearish ‘M’ formation.
The middle of the ‘M’ or breakdown is at 113-11.
Until Bonds post a weekly close below 113-11 or above 118-10, this trading range may continue.
WHAT DOES THE 30-YEAR BOND YIELD CHART LOOK LIKE?
Remember, Bond prices move inverse to yields.
The 30-year Bond yield chart appears to be breaking out to the upside.
If yields move up, then Bond prices drop.
The 30-year yield chart has been in a seventeen-month decline that began from high yields of 5.597 (5/14/04) to low yields of 4.351 (2/08/05).  
Currently, yields are at 4.581.
WHAT ARE FUTURES TRADERS ADVISED TO DO NEXT WEEK?
Below are possible ‘trading modules’ for futures traders to consider next week:
# 1) If Bonds first post the weekly sell signal of 114-06, aggressive traders are advised to establish a short position.
If trading module # 1 is activated, aggressive traders are advised to place resting stop and reverse orders at the weekly buy signal of 115-14. (Traders and their account executives need to discuss this suggested stop).
# 2) If Bonds posts a close below recent lows of 114-00 - which were last month’s lows, aggressive traders are advised to either add to their existing short position or establish a short position.
If trading module # 2 is activated, aggressive traders are advised to place stops for this position only above 114-31. (Traders and their account executives need to discuss this suggested stop).
# 3) If Bonds post multiple closes below 113-11, aggressive traders are advised to either add to their existing short position or establish a short position.
If trading module # 3 is activated, aggressive traders are advised to move all stops above 114-06. (Traders and their account executives need to discuss this suggested stop).
Our first objective will be 112-30.
# 4) If Bonds first post a weekly sell signal at 114-06 - yet reverse, aggressive traders are advised to place resting buy stop and reverse orders at the weekly buy signal of 115-14.
If trading module # 4 were activated, aggressive traders will be out of their established short position and will have an established long position.
If this were to occur, aggressive traders are advised to place stops for their long position at 114-06. (Traders and their account executives need to discuss this suggested stop).
# 5) If Bonds first post a weekly buy signal at 115-14, aggressive traders are advised to establish a long position.
If trading module # 5 were activated, aggressive traders are advised to place resting stop and reverse resting sell orders at 114-06. (Traders and their account executives need to discuss this suggested stop).
# 6) If Bonds post a close above 116-10, aggressive traders are advised to either add to their existing long position or establish a long position.
If trading module # 6 was activated, aggressive traders are advised to move all stops below 115-14. (Traders and their account executives need to discuss this suggested stop).
Our first objective will be 116-22.
# 7) If Bonds first post a weekly buy signal at 115-14 - yet reverse, aggressive traders are advised to place resting sell stop and reverse orders at the weekly sell signal of 114-06.
If trading module # 7 were activated, aggressive traders will be out of their established long position and will have an established short position.
If this were to occur, aggressive traders are advised to place stops for their short position at 115-14. (Traders and their account executives need to discuss this suggested stop).
WHAT ARE OPTION TRADERS ADVISED TO DO NEXT WEEK?
# 8) If Bonds first post the weekly sell signal of 114-06, option traders are advised to purchase December 113 puts.
If trading module # 8 is activated, option traders are advised to risk 70% of purchase price. (Traders and their account executives need to discuss this suggested risk).
# 9) If Bonds posts a close below recent lows of 114-00, which were last month’s lows, option traders are advised to either add to their existing December 113 puts or purchase December 113 puts.
If trading module # 9 is activated, options traders are advised to risk 70% of purchase price. (Traders and their account executives need to discuss this suggested risk).
# 10) If Bonds post multiple closes below 113-11, options traders are advised to purchase December 112 puts.
If trading module # 10 is activated, option traders are advised to risk 50% of current market value. (Traders and their account executives need to discuss this suggested risk).
Our first objective will be 112-30.
# 11) If Bonds first post a weekly sell signal at 114-06 - yet reverse, option traders are advised to use the 70% risk strategy.
If trading module # 11 were activated, option traders will have exited their existing put positions and are advised to purchase December 115 calls. 
If this were to occur, option traders are advised to risk 70% of purchase price. (Traders and their account executives need to discuss this suggested risk).
If this were to occur, option traders would continue to follow trading modules # 12 and # 13.
# 12) If Bonds first post a weekly buy signal at 115-14, option traders are advised to purchase December 115 calls.
If trading module # 12 were activated, option traders are advised to risk 70% of purchase price. (Traders and their account executives need to discuss this suggested risk).
# 13) If Bonds post a close above 116-10, option traders are advised to add to their existing December 115 calls.
If trading module # 13 was activated, option traders are advised risk 50% of current market value. (Traders and their account executives need to discuss this suggested risk).
Our first objective will be 116-22.
# 14) If Bonds first post a weekly buy signal at 115-14 - yet reverse, option traders will have exited their existing call positions and are advised to purchase December 113 puts. 
If this were to occur, option traders are advised to risk 70% of purchase price. (Traders and their account executives need to discuss this suggested risk).
If this were to occur, option traders would continue to follow trading modules # 8, # 9 and # 10.
Our first objective will be 112-30.
DAILY CHART:
http://www.bohl.minot.com/d_Chart.cgi?US05Z
------------
WEEKLY CHART:
http://www.bohl.minot.com/w_Chart.cgi?US
----------------------------------------------------
DECEMBER S&P 500 (SP5Z)
This week I will begin developing a ‘trading module’ for the December S&P 500 because of a weekly recommendation for next week and a monthly recommendation for October.
The December S&P has been in a twenty-week price advance that began from lows of 1171.40 (4/20/05) to recent highs of 1254.50 (8/03/05).
Currently, The S&P has been in an eleven-week trading range between lows of 1208.50 (8/30/05) and highs of 1250.30 (9/09/05).
The S&P 40-day moving average and 50-day moving average is at 1231.00 and 1234.00, respectively.
The S&P 100-day moving average and 200-day moving average is at 1223.50 and 1211.50, respectively.
Note: This product is extremely volatile and should only be traded by aggressive traders. This is not for the inexperienced trader or the faint of heart.
Clients are being cautioned that they should have an equity to risk ratio of no more than 9% to trade this product.
The weekly recommendation for the December S&P next week: buy when trades 1235.90 - sell when trades 1216.10.
The monthly recommendation for the December S&P in October: buy when trades 1250.40 - sell when trades 1210.90.
The weekly recommendation has a risk of $4,950.
The monthly recommendation has a risk of $9,875.
That means traders should have an account size of $95,000 per contract to trade this product.
If you do not fit this profile, I suggest that traders consult their account executive and consider trading the electronic EMINI S&P.
If traders consider the EMINI S&P, they should have an account size of $19,000 per contract to trade this product.
The December S&P has one unfilled price gap above the current market price between 1236.50 and 1236.70.
The December S&P has several unfilled price gaps below the current market price.
WHAT DOES THE S&P CHART LOOK LIKE?
Recently, the December S&P has been in an extended trading range between lows of 1208.50 and highs of 1250.30.
The S&P remains in good hands as long as it maintains a foothold above last year’s high of 1219.70.
WHAT ARE FUTURES TRADERS ADVISED TO DO NEXT WEEK?
Below are possible ‘trading modules’ for futures traders to consider next week:
# 1) If the S&P first posts its weekly buy signal at 1235.90, aggressive traders are advised to establish a long position.
If trading module # 1 is activated, aggressive traders are advised to place resting sell stop orders at the weekly sell signal of 1216.10 and resting sell stop orders at the monthly sell signal of 1210.90. (Traders and their account executives need to discuss this suggested stop).
# 2) If the S&P posts a close above recent highs of 1244.70, aggressive traders are to prepare for an assault on the monthly buy signal at 1250.40.
If trading module # 2 is activated, aggressive traders are advised to place resting buy stop orders at the monthly buy signal of 1250.40. (Traders and their account executives need to discuss this suggested stop).
# 3) If the S&P posts its monthly buy signal at 1250.40, aggressive traders are advised to either add to their existing long position or establish a long position.
If trading module # 3 is activated, aggressive traders are advised to move all stops below 1235.90. (Traders and their account executives need to discuss this suggested stop).
Our first objective will be 1255.70.
# 4) If the S&P were to post multiple closes above contract highs of 1254.50, aggressive traders are advised to either add to their existing long position or establish a long position.
If trading module # 4 is activated, aggressive traders are advised to move all stops below 1242.30. (Traders and their account executives need to discuss this suggested stop).
Our second objective will be 1289.90.
# 5) If the S&P first posts a weekly buy signal at 1235.90 - yet reverses, aggressive traders are advised to place resting sell stop orders at the weekly sell signal of 1216.10. (Traders and their account executives need to discuss this suggested stop).
If trading module # 5 were activated, aggressive traders will be out of their established long position.
If trading module #5 were activated, aggressive traders are advised to place resting sell stop orders at the monthly sell signal of 1210.90. (Traders and their account executives need to discuss this suggested stop).
If this were to occur, aggressive traders will have established a short position and are advised to place stops for this short position at 1235.90. (Traders and their account executives need to discuss this suggested stop).
If trading module # 5 were activated, traders will refer to trading module # 8.
# 6) If the S&P first posts a weekly sell signal at 1216.10, aggressive traders are advised to establish a short position.
If trading module # 6 were activated, aggressive traders are advised to place resting stop and reverse buy orders at 1235.90. (Traders and their account executives need to discuss this suggested stop).
# 7) If the S&P posts a monthly sell signal at 1210.90, aggressive traders are advised to either add to their existing short position or establish a short position.
If trading module # 7 were activated, aggressive traders are advised to move all stops above 1235.90. (Traders and their account executives need to discuss this suggested stop).
# 8) If the S&P posts multiple closes below 1208.50, aggressive traders are advised to either add to their existing short position or establish a short position.
If this were to occur, aggressive traders are to move all their existing stops above 1216.10. (Traders and their account executives need to discuss this suggested stop).
Our first objective will be 1196.30.
# 9) If the S&P first posts a weekly sell signal at 1216.10 - yet reverses, aggressive traders are advised to place resting buy stop and reverse orders at the weekly buy signal of 1235.90. (Traders and their account executives need to discuss this suggested stop).
If trading module # 9 were activated, aggressive traders will be out of their established short positions and will have an established long position.
If this were to occur, aggressive traders are advised to place stops for their long positions at 1210.90. (Traders and their account executives need to discuss this suggested stop).
If trading module # 9 were activated, traders will refer to trading modules # 2, # 3 and # 4.
DAILY CHART:
http://www.bohl.minot.com/d_Chart.cgi?SP05Z
------------
WEEKLY CHART:
http://www.bohl.minot.com/w_Chart.cgi?SP
----------------------------------------------------
NOVEMBER SOYBEANS (S5X)
In the July 31st Joss Report I began developing a ‘trading module’ for November Soybeans.
I noted at the inception of the trade that Soybeans were an extremely volatile product and should only be traded by aggressive traders. This was not for the inexperienced trader or the faint of heart.
Clients were cautioned that they should have an equity to risk ratio of no more than 9% to trade this product.
If you did not fit this profile, I suggested that traders consult their account executive and consider an options strategy.
Two weeks ago - and last week, traders were warned to liquidate their short positions in an orderly fashion for the following reasons:
1) Volatility was low. The six-month volatility is at 22.48% indicating a possible bottom may be near.
2) A seasonal trend reversal was to be posted on September 29th.
Soybeans have two unfilled price gaps above the current market price - the most recent is between 587.00 and 589.00.
Below was the trade signals posted over the last seven weeks.
On 8/05/05, Beans posted a weekly sell signal at 669.75.
On 8/05/05, Beans posted a monthly sell signal at 665.75.
On 8/09/05, Soybeans confirmed a breakout on the downside by closing below 660.50.
On 8/12/05, Beans posted an ‘intra-day’ sell signal at 649.00.
On 8/19/05, Beans posted a daily sell signal at 619.25.
On 9/08/05, Beans posted a daily sell signal at 601.25.
On 9/09/05, Beans posted an intra-daily sell signal at 599.25.
On 9/23/05, Beans posted a daily sell signal at 577.25.
On 9/29/05, Beans posted a daily buy signal at 564.75.
 
WHAT WERE TRADERS ADVISED TO DO LAST WEEK?
Aggressive traders who established a short position at the weekly sell signal of 669.75 were advised to move their stops to 586.25.
Aggressive traders who either added to their existing short position or established a short position at the monthly sell signal of 665.75 were advised to move their stops to 586.25.
Aggressive traders who either added to their existing short position or established a short position at the second posting of the monthly sell signal of 665.75 were advised to move their stops to 586.25.
Below were possible ‘trading modules’ for futures traders to consider last week.
# 1) If November Soybeans first posted a lower low than the previous week’s low of 569.25, traders were advised to not add to their existing short position.
If trading module # 1 was enacted, aggressive traders were advised to either liquidate 25% of their short positions.
# 2) If Soybeans posted a close below 564.00; traders were advised to not add to their existing short position.
If trading module # 2 was enacted, aggressive traders were advised to liquidate another 25% of their short positions.
In the Joss Report two weeks ago, traders were advised to exit all short positions by 9/28/05 because of a potential seasonal trend reversal. Traders should now sit on the sidelines and wait for another trading opportunity.
 
DAILY CHART:
http://www.bohl.minot.com/d_Chart.cgi?S05X
------------
WEEKLY CHART:
http://www.bohl.minot.com/w_Chart.cgi?S
----------------------------------------------------
DECEMBER SILVER (SI5Z)
Last week I began writing a ‘trading module’ for December Silver because of an ‘intra-weekly’ buy signal that was posted at 7.175 on 9/08/05 and a bullish ‘head and shoulders‘ bottom formation.
December Silver has been in a yearly trade range between 6.490 lows and 7.810 highs.
Silver’s 40-day moving average and 50-day moving average is at 7.150 and 7.170, respectively.
Silver’s 100-day moving average and 200-day moving average is at 7.210 and 7.190, respectively.
I Noted last week that this product was extremely volatile and should only be traded by aggressive traders.
This was not for the inexperienced trader or the faint of heart.
Traders were being cautioned that they should have an equity to risk ratio of no more than 9% to trade this product.
At the inception of this trade, Silver’s ‘intra-week’ trading risk was at $1,325. That meant traders should have an account size of $12,000 per contract to trade this product.
If you did not fit this profile, I suggested that traders consult their account executive and consider an options strategy.
Silver has several unfilled price gaps above the current market price. The largest unfilled price gap is between 7.810 and 8.000.
Silver has several unfilled price gaps below the current market price. The most recent unfilled price gap is between 6.865 and 6.890.
On 9/15/05, December Silver posted an ’intra-daily buy signal at 7.075.
On 9/16/05, December Silver posted a close above the all-important neckline.
On 9/16/05, December Silver posted an ‘intra-weekly’ buy signal at 7.175.
WHAT DOES THE SILVER CHART LOOK LIKE?
December Silver has a bullish ‘head and shoulders’ bottom formation.
The left shoulder was developed between highs of 7.400 (8/03/05) and lows of 7.000 (8/15/05).
The head was established between highs of 7.180 (8/22/05) and lows of 6.705 (8/30/05).
The right shoulder developed between highs of 7.170 (9/08/05) and lows of 6.910 (9/13/05).
The shoulder line support was at 6.910.
The neckline breakout occurred at 7.130 on 9/16/05.
In addition, the long-term weekly and monthly Silver chart has developed a pennant formation.
The pennant is based on a multi-year trading range between lows of 5.510 (5/14/04) and highs of 8.310 (4/02/04). 
The major upside breakout - if touched today - would occur at 8.070.
WHAT WERE FUTURES TRADERS ADVISED TO DO LAST WEEK?
Aggressive traders who established a long position at the ‘intra-day’ buy signal of 7.075 were advised to move stops below 7.130. (Traders and their account executives need to discuss this suggested stop).
Aggressive traders who either added to their existing long position or established a long position at the ‘intra-weekly’ buy signal of 7.175 were advised to move stops below 7.175. (Traders and their account executives need to discuss this suggested stop).
Aggressive traders who either added to their existing long position or established a long position on a higher high than 7.320 were advised to move stops below 7.175. (Traders and their account executives need to discuss this suggested stop).
Aggressive traders who either added to their existing long position or established a long position at a higher high than last month’s high of 7.400 were advised to move stops below 7.175. (Traders and their account executives need to discuss this suggested stop).
Aggressive traders who either added to their existing long position or established a long position at a higher high than last month’s high of 7.400 were advised to move stops below 7.175. (Traders and their account executives need to discuss this suggested stop).
Below were possible ‘trading modules’ for futures traders to consider last week:
# 1) If December Silver first posted a higher high than the previous week’s high of 7.500, aggressive traders were advised to either add to their existing long position or establish a long position.
If ‘trading module’ #1 was enacted, traders were advised to move all stops to 7.275.
Our objective would be 7.770.
WHAT WERE OPTIONS TRADERS ADVISED TO DO LAST WEEK?
Conservative traders who purchased either December 7.10 or 7.20 calls on 9/16/05 were advised to continue risking 50% of current market price.
Conservative traders who purchased either December 7.10 or 7.20 calls when Silver posted a higher high than 7.320 were advised to continue risking 50% of current market price.
Conservative traders who purchased either December 7.30 or 7.50 calls when Silver posted a higher high than last month’s high of 7.400 were advised to continue risking 50% of current market price.
WHAT ARE FUTURES TRADERS ADVISED TO DO NEXT WEEK?
Aggressive traders who established a long position at the ‘intra-day’ buy signal of 7.075 are advised to move stops below 7.240. (Traders and their account executives need to discuss this suggested stop).
Aggressive traders who either added to their existing long position or established a long position at the ‘intra-weekly’ buy signal of 7.175 are advised to move stops below 7.240. (Traders and their account executives need to discuss this suggested stop).
Aggressive traders who either added to their existing long position or established a long position on a higher high than 7.320 are advised to move stops below 7.240. (Traders and their account executives need to discuss this suggested stop).
Aggressive traders who either added to their existing long position or established a long position at a higher high than last month’s high of 7.400 were advised to move stops to 7.420. (Traders and their account executives need to discuss this suggested stop).
Below are possible ‘trading modules’ for futures traders to consider next week:
# 1) If December Silver first posts a higher high than last week’s high of 7.645, aggressive traders are not advised to add to their existing long position.
If trading module #1 is enacted, traders are advised to move all stops below 7.570. (Traders and their account executives need to discuss this suggested stop).
# 2) If Silver posts a high of 7.770, aggressive traders are advised to liquidate their existing long positions.
If trading module #2 is enacted, traders will be flat the December Silver and are advised to wait for another trading opportunity.
Our objective is 7.770.
WHAT ARE OPTION TRADERS ADVISED TO DO NEXT WEEK?
Conservative traders who purchased either December 7.10 or 7.20 calls on 9/16/05 are advised to risk 30% of current market price. (Traders and their account executives need to discuss this suggested risk).
Conservative traders who purchased either December 7.10 or 7.20 calls when Silver posted a higher high than 7.320 are advised to risk 30% of current market price. (Traders and their account executives need to discuss this suggested risk).
Conservative traders who purchased either December 7.30 or 7.50 calls when Silver posted a higher high last month’s high of 7.400 are advised to risk 30% of current market price. (Traders and their account executives need to discuss this suggested risk).
Our objective is 7.770.
# 3) If December Silver posts a close below 7.240, aggressive traders will have been stopped out of their long positions.
If trading module # 3 were to occur, aggressive traders are advised to sit on the sidelines and wait for another trading opportunity.
DAILY CHART:
http://www.bohl.minot.com/d_Chart.cgi?SV05Z
------------
WEEKLY CHART:
http://www.bohl.minot.com/w_Chart.cgi?SV

 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.'

DECEMBER JAPANESE YEN (JY5Z)
This week I will add the Yen to ‘Chart Watch’ because of a potential ‘intra-yearly’ sell signal that may occur in the future.
If the Yen can close at or below .8710 by December 30th, this would constitute an ‘intra-year’ sell signal.
If this were to occur, traders will be advised in the January 3rd Joss Report.
I will continue to update traders if a weekly and/or monthly sell signal develops that might push the Yen to its ‘intra-yearly’ sell signal before December 30th at .8710.
DAILY CHART:
http://www.bohl.minot.com/d_Chart.cgi?JY05Z
------------
WEEKLY CHART:
http://www.bohl.minot.com/w_Chart.cgi?JY
----------------------------------------------------
DECEMBER COTTON (CT5Z)
Last week, I added December Cotton to ‘Chart Watch’ because of a possible bullish ‘head and shoulders’ bottom and a potential monthly recommendation for October.
On September 30th, December Cotton did not close with a monthly recommendation. However, I will continue to watch and report on the future progress of the potentially bullish ‘head and shoulders’ bottom that appears to have formed.
WHAT WERE TRADERS ADVISED TO DO LAST WEEK?
1) Traders were advised to sit on the sidelines and wait for a possible monthly recommendation for October, which would not be revealed until the close of business September 30th. If this were to occur, traders would receive the monthly recommendations the evening of September 30th - via email.
DAILY CHART:
http://www.bohl.minot.com/d_Chart.cgi?CT05Z
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WEEKLY CHART:
http://www.bohl.minot.com/w_Chart.cgi?CT
----------------------------------------------------
DECEMBER COCOA (CC5Z)
Cocoa will move back to ‘Chart Watch’ until a close below 1297 or above 1575 occurs.
Last week, I explained that December Cocoa was in danger of not only posting an ‘intra-month’ sell signal but an ‘intra-year’ sell signal.
If Cocoa posted a close at or below 1370 by the close of trading September 30th, this would constitute an ‘intra-monthly’ sell signal and a continuation of the downtrend.
Furthermore, I explained that if Cocoa posted its ‘intra-month’ sell signal at 1370, this might send Cocoa into a tailspin. Any additional selling pressure would have the potential to send Cocoa to its ‘intra-yearly’ sell signal at 1297, which were last year’s low.
If Cocoa posted a close below 1296, traders might see a dramatic collapse.
Our objective would be 858.
Friday, Cocoa posted a monthly close above 1370 - negating for the second month in a row a major bearish trend reversal. This is now a reoccurring pattern…. that funds push Cocoa near last year lows early in the month and then cover their short positions the last two days of trading.
WHAT DOES THE COCOA CHART LOOK LIKE?
December Cocoa still has a bearish ‘island’ reversal top that formed between 9/02/05 and 9/09/05.
On 9/09/05, Cocoa posted an ‘intra-daily’ sell signal at 1542.
On 9/21/05, Cocoa posted an ‘intra-day’ sell signal at 1366.
Cocoa’s 40-day moving average and 50-day moving average is at 1422 and 1436, respectively.
Cocoa’s 100-day moving average and 200-day moving average is at 1464 and 1542, respectively.
WHAT WERE FUTURES TRADERS ADVISED TO DO LAST WEEK?
Aggressive traders who established a short position at the ‘intra-day’ sell signal of 1542 were advised to move stops above 1395.
On 9/29/05, aggressive traders were stopped out of their short positions at 1413.
WHAT ARE FUTURES TRADERS ADVISED TO DO NEXT WEEK?
# 1) If Cocoa posts a close below 1298, traders are advised to establish a short position.
If ‘trading module’ #1 is enacted, traders are advised to place stops above 1413.
Our long-term objective will be 858.
DAILY CHART:
http://www.bohl.minot.com/d_Chart.cgi?CC05Z
------------
WEEKLY CHART:
http://www.bohl.minot.com/w_Chart.cgi?CC

CURRENT 'MONTHLY' RECOMMENDATIONS
FOR OCTOBER:

- DECEMBER S&P 500 (SP5Z)
- DECEMBER EMINI S&P (ES5Z)
- DECEMBER CRUDE OIL (CL5Z)
- NOVEMBER ORANGE JUICE (OJ5X)

FUTURE WATCH

Future watch will list developing 'monthly' recommendations 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' recommendations will be revealed on the close of business October 31 and sent via email for November.

- Potential monthly recommendations for November will be listed in future weekly trade advisor issues.

COPYRIGHT WARNING AND NOTICE: It
is a violation of federal copyright law to
reproduce all or any part of this publication or
its contents by email, facsimile, xerography,
scanning or any other means, without
permission.
Copyright 2005, Joss Report - S.R. Joss Inc and ClearTrade Inc. All rights reserved.
If you are receiving this report from any other source than S.R. Joss Inc or ClearTrade Inc. please contact us at 1-800- 493-4444.

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 at 800-493-4444

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* The Joss Report trade recommendations and weekly trade advisor is prepared by Scott Joss, Non- Member C.T.A.

Scott Joss is a 'non member' CTA and is providing the Joss Report weekly trading advisor and trade 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 publication/newsletter are in no way affiliated with ClearTrade, Inc. Likewise, sites linked through ClearTrade's Joss Report weekly trade advisor 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.

REPRODUCTION OR REBROADCAST OF ANY PORTION OF THIS INFORMATION IS STRICTLY PROHIBITED WITHOUT THE WRITTEN PERMISSION OF S.R. JOSS INC./CLEARTRADE, INC.

The contents of this newsletter are copyright 1997-2005, Scott R. Joss/S.R. Joss Inc./ClearTrade, Inc. *TM. All Rights Reserved.

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