WELCOME TO THE JOSS REPORT - WEEKLY TRADE ADVISOR

ClearTrade®
 Clearing Man Financial
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 Archived Weekly Trade Advisor 2005
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• TECH TALK - ORANGE JUICE - SUGAR - GOLD - SILVER - S&P 500 - EMINI S&P
• CHART WATCH 
•  CURRENT 'MONTHLY' RECOMMENDATIONS 
•  FUTURES WATCH
• COMING EVENTS AND DATA RELEASES

 

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

MARCH Sugar (SB6H)

Twenty-six weeks ago, I began developing several ‘trading modules’ for Sugar.
Each week I stressed to traders that the Sugar ‘trading modules’ I developed were long-term trades that may span a year or more to achieve. Because of the possible length of the trade, traders were - and continue to be advised to establish long positions in March 2006 futures and options, then rolling forward as time approaches.
The long positions in Sugar were based originally on daily, weekly, and monthly trade signals from the July contract, then the October contract - and now, the March contract.
Fundamentally, my belief still stands that Sugar prices will move higher long-term based on the current supply/demand equation and world policy changes to cut subsidies.

The ‘Commitment of Traders’ report - published each Friday by the CFTC - indicated that the net change in open interest last week increased by 11,583, posting a total open interest of 500,572 contracts.  
Next week will be important fundamentally due to the USDA crop production and Supply/Demand report. In addition, the following week is the long-awaited December Doha Round talks in Hong Kong.
WHAT DO THE CHARTS LOOK LIKE?
Let’s review the technical analysis that is driving the Sugar market:
The Sugar chart had developed two bullish “W” formations.
The all-important middle of the first “W” was at 9.13 vs. the long-term monthly chart. 
The long-term weekly Sugar chart has the same formation as the daily chart, which is a bullish “W” formation.
The long-term monthly Sugar chart, which supports the daily and long-term weekly charts, has not only one but two “W” formations.
The all-important middle of the first monthly “W” was at 9.13.
The all-important middle of the second “W” was at 11.40.
Our short-term objectives were 12.99 to 13.29, which was effectively met last week, and 18.44 vs. the second bullish "W" formation.
A list of Sugar’s past unfilled price gaps above the current market price is provided below so that we can reference them quickly if the need presents itself.
1) Price gap between 11.72 and 11.80 (1/09/98). This price gap was met on 10/04/05.
2) Price gap between 13.50 and 13.61 (2/19/82).
3) Price gap between 19.80 and 19.85 (4/03/81).
4) Price gap between 25.85 and 26.20 (2/13/81).
5) Price gap between 31.25 and 31.30 (1/09/81).
6) Price gap between 33.85 and 35.05 (11/28/80).
7) Price gap between 51.20 and 53.20 (11/29/74).
8) Price gap between 59.20 and 61.10 (11/22/74).  
WHAT DOES THE MARCH SUGAR CHART LOOK LIKE?
March Sugar has been in a multi-year price advance, which began from lows of 6.12 (2/13/04) to recent highs of 13.05 (12/02/05).
March Sugar began its current price advance from lows of 11.13 (11/10/05) to recent highs of 13.05 (12/02/05).
Recently, March Sugar had been trapped between the price bar posted on 10/04/05 between lows of 11.13 and 11.91. When I last wrote on March Sugar, I advised traders that Sugar would test the bottom of the 11.13 price bar. 
Traders were advised to sit on the sidelines until March Sugar posted either a close below 11.13 or above 11.91 before re-establishing a position. Between 10/31/05 and 11/14/05 March Sugar developed a bullish mini "W" formation. The middle of the bullish "W" and buy signal was at 11.47.
Aggressive traders were advised to establish a long position on a close above 11.47, placing stops below 11.13.
Option traders were advised to purchase July 1200 calls on a close above 11.47, risking 100% of purchase price.
On 11/15/05, March Sugar posted a close above the all-important 11.91 price level. Aggressive traders were advised to either add to their existing long position or establish a long position, placing stops below 11.13.
Option traders were advised to purchase July 1200 calls, risking 100% of purchase price.
Our objective from the mini 'W' formation was 12.36, which was met on 11/28/05.
On 12/02/05, March Sugar -  in effect -  met our first long-term objective between 12.99 and 13.29, which was the projection from the first bullish "W" formation.
Aggressive traders were advised to either exit 50% of their established futures positions or move their stops below 12.17.
Option traders were advised to either exit 50% of their July 1200 calls or sell July 1600 calls, establishing a bull call spread. This spread will allow traders some price protection; yet will allow them to continue to participate in any possible price advances that may still occur.
March Sugar has seven unfilled price gaps above the current market price, which were listed above.
March Sugar has four unfilled price gaps below the current market price. The most recent unfilled price gap is between 12.17 and 12.28. 
For three weeks March Sugar has closed above its 40-day moving average and 50-day moving average - which as of Friday was at 11.81 and 11.68, respectively.
Sugar closed Friday at 12.86, which is above its 100-day moving average of 10.95 and its 200-day moving average of 9.94.
Listed below are the original signals that Sugar has posted in the last three weeks:
On 11/10/05, March Sugar posted an 'intra-day' buy signal at 11.36.
On 11/14/05, March Sugar posted a close above the mini "W", activating a buy signal at 11.48.
On 11/15/05, March Sugar posted a close above the all-important second major bullish "W" at 11.40 and activated a buy signal at the 11.92 price level.
On 11/22/05, March Sugar posted a daily buy signal at 12.11.
On 11/23/05, March Sugar posted an 'intra-day' buy signal at 12.16.
On 11/28/05, March Sugar posted a weekly buy signal at 12.18.
Sugar, due to high volatility, is not for the inexperienced trader.

Traders are not to exceed the rule of thumb - 10% of equity to risk ratio.
If you do not fit this risk profile, traders are advised to consult their account executive for an option trading strategy.
WHAT ARE TRADERS ADVISED TO DO NEXT WEEK?
Aggressive traders who established long positions below 12.19 are advised to either exit 50% of their positions or move their stops below 12.17.
Options traders who purchased July 1200 calls are advised to either exit 50% of their positions or sell July 1600 calls; this would establish a bull call spread that affords some protection, yet allows traders to still participate if a further price advance occurs.

When I first started developing a game plan for Sugar many months ago, my trading plan was as follows:

1) Sugar would first breach the original bullish "W" formation at 9.13

2) Sugar would breach the second bullish "W" formation at 11.85.

3) Sugar would trade to the price objective from the first "W" formation between 12.99 and 13.29.

4) Once Sugar met its first price objective between 12.99 and 13.29, it ! would have a price pull back to retest the middle of the second "W" formation at 11.40.

5) Sugar would consolidate for a period of time.

6) Sugar would begin its next leg up to 18.44.

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 high of 13.05:

Aggressive traders are not advised to add to their established long position.

Option traders are not advised to purchase calls.

# 2) If March Sugar posts a close over 1341:

Aggressive traders are advised to either add to their existing long position or establish a long position, placing stops for this position below 12.96*.

Option traders are advised to purchase July 1400 calls, risking 50% of purchase price**.

Our objective will be the unfilled price gap between 13.50 and 13.61 (2/19/82).

# 3) If March Sugar posts a close above 14.05:

Aggressive traders are advised to either add to their existing long position or establish a long position, placing all stops below 13.50*.

Option traders are advised to purchase July 1400 calls, risking 50% of purchase price**.

Our objective will be 14.56.

# 4) If March Sugar posts multiple closes above 14.95:

Aggressive traders are advised to either add to their existing long position or establish a long position, placing all stops below 13.50*.

Option traders are advised to purchase July 1500 calls, risking 50% of purchase price**.

Our objective will be an all out assault on old highs of 15.83 (1/31/95). ! (Sweet sixteen)

#5) If March Sugar first posts a close below last week's low of 12.28 and multiple closes below 12.17:

Aggressive traders will have exited their long positions and are advised to sit on the sidelines.

Option traders will have either exited their July calls or have hedged their calls by selling the July 1600 calls**.

Our objective will be a challenge of the middle of the second "W" formation at 11.40.

Below are possible reversal ‘trading modules’ to consider next week:

# 6) If March Sugar first posts a higher high than last week's high of 13.05 yet reverses, posting a lower low than last week’s  low of 12.28:

Aggressive futures traders are advised to exit their long positions and place resting buy stop orders at 1306.

If the resting buy stop order at 13.06 is activated, aggressive traders will reestablish their long positions.

If 13.06 is posted, aggressive traders are advised to place stops for this position below 12.17*.

Options traders are advised to prepare to hedge any portion of their naked option position by selling the July 1500 calls.

If 12.27 is posted, option traders are advised to sell July 1500 calls**.

Our objective will be an all out assault on the middle of the second "W" at 11.40.

# 7) If March Sugar first posts a lower low than last week's low of 12.28 yet reverses, posting a higher high than last week's high of 13.05:

Aggressive traders are advised to either add to their existing long position or establish a long position, placing stops for this position below 12.96*.

Option traders are advised to purchase July 1400 calls, risking 50% of purchase price**.

Our objective will be the unfilled price gap between 13.50 and 13.61 (2/19/82).

I have compiled some Sugar option facts for traders:

Sugar options for a two-year ‘implied volatility’ average are ranked number 7 out of 45.

7) Sugar (SB) High 42.12% - Low 18.90% - Current 29.13%.

Sugar options for a one-year ‘implied volatility’ average are ranked number 4 out of 45.

4) Sugar (SB) High 42.12% - Low 18.90% - 29.13%.

Sugar options for a six-month ‘implied volatility’ average are ranked number 6 out of 45.

6) Sugar (SB) High 32.40% - Low 18.90% - 29.13%.

DAILY CHART:
http://www.bohl.minot.com/d_Chart.cgi?SB06H
-----------------
WEEKLY CHART:
http://www.bohl.minot.com/w_Chart.cgi?SB

* (Futures traders and their account executives are advised to discuss this suggested stop).

** (Option traders and their account executives are advised to discuss the suggested risk).

----------------------------------------------------

JANUARY ORANGE JUICE (OJ6F)

Seven weeks ago I began developing ‘trading modules’ for January Orange Juice because of a ‘Coil’ day recommendation and weekly recommendation.

In the coming weeks I will begin developing 'trading modules' for March Orange Juice due to the fast approaching first notice day for January Orange Jui! ce on 1/03/06.

For the last several weeks I've mentioned that reports of damaged areas were beginning to filter out of Florida’s south central portion of the state - yet the true damage to citrus trees and crops has yet to be determined and may not be realized until the next forecast report due out in the USDA's December 9th report.

This USDA crop production and Supply/Demand report on December 9th will be key to Grains, Sugar and Orange Juice.

The ‘Commitment of Traders’ report - published each Friday by the CFTC - indicated that the net change in open interest last week decreased by - 233, posting a total open interest of 34,791 contracts.  

WHAT DO! ES THE JANUARY ORANGE JUICE CHART LOOK LIKE?

January Orange Juice has been in an eleven-week price advance from lows of 90.80 (8/23/05) to recent highs of 127.90 (12/02/05).

Recently, January Orange Juice traded from highs 124.90 to lows 115.40.

Currently, January Orange Juice has traded from lows of 115.40 to highs posted Friday at 127.90.

I explained to traders two weeks ago that Orange Juice may retrace to lower levels. My guess was that Juice would have a price pullback to between 114.00 and 115.00. What did occur was that Juice traded lower to 115.40, which developed into a bullish downward flag formation.

Our near-term objective from this bullish flag formation is 129.80.

Below are the most recent signals for January Orange Juice:

On 10/03/05, November Orange Juice posted a monthly buy signal at 102.45. Because of the sketchy chart prices, I equated this to January Orange Juice at approx. 104.80.

On 10/17/05, January Orange Juice posted a ‘Coil’ day buy signal at 105.85.

On 10/17/05, January Orange Juice posted a weekly buy signal at 106.45.

On 10/24/05, January Orange Juice posted a daily buy signal at 111.80.

On 10/27/05, January Orange Juice posted a daily buy signal at 117.55.

On 11/15/05, January Orange Juice posted a daily sell signal at 120.65.

On 11/18/05, January Orange Juice posted a daily sell signal at 120.15.

On 11/22/05, January Orange Juice posted a daily sell signal at 117.65.

On 11/30/05, January Orange Juice posted an 'intra-week' buy signal at 119.85.

January Orange Juice has no unfilled price gaps above the current market price. 

January Orange Juice has four unfilled price gaps below the current market price. The most recent unfilled price gap is between 120.30 and 122.50. The next unfilled price gap is between 108.60 and 108.90.

On 10/09/98, Orange Juice posted highs at 131.95.

January Orange Juice has closed ten-weeks above its 40-day moving average and 50-day moving average - which as of Friday was at 116.60 and 114.05, respectively.

January Orange Juice closed Friday at 126.50, which is above its 100-day moving average of 105.95 and its 200-day moving average of 102.55.

 Orange Juice, due to high volatility, is not for the inexperienced trader.
Traders are not to exceed the rule of thumb - 10% of equity to risk ratio.
This means the proposed risk for January Orange Juice futures from Friday's close to the underlying stop would be $1,665. Traders should have an account size of $17,000 per contract. 
If you do not fit this risk profile, traders are advised to consult their account executive for an option trading strategy.
WHAT WERE TRADERS ADVISED TO DO?

Please view Archived Weekly Trade Advisor for 11/20/05.

http://www.cleartrade.com/images/letter_11.20.05.html

WHAT ARE TRADERS ADVISED TO DO NEXT WEEK?

Aggressive traders who have established long positions below 119.90 are advised to move all stops below 115.40.

Option traders who either purchased January 100.00, 110.00 or 120.00 calls over the course of the last six-weeks are advised to either exit their option positions due to expiration 12/17/05 or are advised to exercise the option calls to futures.

If aggressive option traders decide to exercise their call options, traders are advised to place all stops below 115.40.

Below are possible ‘trading modules’ for futures traders to consider next week:

# 1) If January Orange Juice first posts a higher high than last week's high of 127.90:

Aggressive traders are not advised to add to their established long position.

Option traders are not advised to purchase calls.

Our short-term objective from the recent bullish flag is 129.80.

# 2) If January Orange Juice posts multiple closes over 131.95:

Aggressive traders are advised to either add to their existing long position or establish a ! long position, placing all stops below 124.90*.

Option traders are advised to purchase March 140.00 calls, risking 70% of purchase price**.

# 3) If January Orange Juice posts a close above 138.75:

Aggressive traders are advised to either add to their existing long position or establish a long position, placing all stop below 131.95*.

Option traders are advised to purchase March 140.00 calls, risking 70% of purchase price**.

Our next objective will be 149.50.

# 4) If January Orange Juice posts a close above 150.00:

Aggress! ive traders are advised to either add to their existing long position or establish a long position, placing all stop below 139.00*.

Option traders are advised to purchase March 160.00 calls, risking 70% of purchase price**.

Our next objective will be a challenge of old highs at 173.50 (1991).

Remember, Orange Juice has been above 200.00 in 1990 and 1988.

#5) If January Orange Juice first posts a close below last week's low and last month's low of 115.40:

Aggressive traders will have exited their long positions and are advised to sit on the sidelines and wait for another trading opportunity.

Option traders will have exited their January calls and are advised to sit on the sidelines and! Wait for another trading opportunity.

Our objective will be a challenge of the unfilled price gap between 108.60 and 108.90.

Below are possible reversal ‘trading modules’ to consider next week:

# 6) If January Orange Juice first posts a higher high than last week's high of 127.90 yet reverses, posting a lower low than last week’s and last month's lows of 115.40:

Aggressive futures traders are advised to exit their long positions and place resting buy stop orders at 127.95.

If the resting buy stop order at 127.95 is activated, aggressive traders will re-establish their long positions.

If 127.95 is posted, aggressive traders are advised to place stops for this position below 115.40*.

Options traders are advised to prepare to exit their January calls.

If 115.40 is posted, option traders are advised to exit their January calls.

Our objective will be a challenge of the unfilled price gap between 108.60 and 108.90.

# 7) If January Orange Juice first posts a lower low than last week's low of 115.40 yet reverses, posting a higher high than last week's high of 127.90:

Aggressive traders are advised to re-establish their long positions, placing stops for this position below 115.40*.

Option traders are advised to purchase March 140.00 calls, risking 70% of purchase price**.

Our short-term objective will be 129.80.

I have compiled some Orange Juice option facts:

Orange Juice options for a two-year ‘implied volatility’ average are ranked number 15 out of 45.

15) Orange Juice (OJ) High 55.83% - Low 21.50% - Current 30.22%.

Orange Juice options for a one-year ‘implied volatility’ average are ranked number 12 out of 45.

12) Orange Juice (OJ) High 43.93% - Low 21.50% - Current 30.22%.

Orange Juice options for a six-month ‘implied volatility’ average are ranked number 7 out of 45.

7) Orange Juice (OJ) High 32.62% - Low 25.44% - Current 30.22%.

DAILY CHART:
http://www.bohl.minot.com/d_Chart.cgi?OJ06F
-----------------
WEEKLY CHART:
http://www.bohl.minot.com/w_Chart.cgi?OJ

* (Futures traders and their account executives are advised to discuss this suggested stop).

** (Option traders and their account executives are advised to discuss the suggested risk).

----------------------------------------------------

FEBRUARY GOLD (GC6G)

Three weeks ago I began developing several 'trading modules' for February Gold because of a daily and weekly recommendation.

On 11/14/05, February Gold posted a daily buy s! ignal at 474.00.

On 11/16/05, February Gold posted a weekly buy signal at 478.30.

In addition, two weeks ago, I informed traders that if February Gold posted a close at or above 486.00 by the close of business November 30th; this would constitute an 'intra-month' buy signal and would suggest a continuation pattern conducive to higher prices.

On 11/30/05, February Gold posted a close at 498.70.
 
The ‘Commitment of Traders’ report for Gold  - published each Friday by the CFTC - indicated the net change in open interest last week decreased by -378, posting a total open interest of 350,225 contracts.  

Gold is not for the inexperienced trader due to high volatility.

Trader! s are not to exceed the rule of thumb - 10% of equity to risk ratio.

If you do not fit this risk profile, traders are advised to consult their account executive for an option trading strategy.

WHAT DOES THE FEBRUARY GOLD CHART LOOK LIKE?

February Gold has been in a multi-year price advance that began from lows of 255.00 (2/28/01) to recent highs of 508.90 (12/02/05).

Recently, February Gold traded from highs of 486.00 (10/12/05) to lows of 460.00 (11/04/05).

Currently, February Gold has traded from lows of 460.00 to highs of 508.90.

February Gold's 40-day moving average and 50-day moving average as of Friday were at 480.50 and 479.20, respectively.

February Gold closed Friday at 507.00, which is above its 100-day moving average of 463.30 and its 200-day moving average of 452.40.

I! feel compelled to share the views of both experienced and inexperienced traders as expressed to me over the past two weeks regarding the metals markets in general. Most believe that this price advance in Gold or Silver is not 'for real' and that a price retreat of twenty to thirty dollars will occur before the real breakout above 520.00 happens. I explained to these traders that this may or may not occur - however, until a sell signal is posted, this price advance is for real.

Several weeks ago in my 11/13/05 Weekly Trade Advisor, I shared my past experiences back in the late 1970's and early 1980's where I witnessed the 'Gold rush' first hand at the C.B.O.T.

Maybe these traders are correct in their thinking - but I'm not inclined to let go of the tail of this bull.

Most of these trader's reasons lay in technical 'mumbo jumbo' about Gold being 15% above the 200-day moving average or the charts look over-bought - or their father or uncle is in the Jewelry business and says that Gold is too high in price. All are frightened to be long, even some ClearTrade clients that began buying Gold five years ago looking for the 520 breakout. Now that the time is upon us, they can't commit.

This is just perfect - and somewhat ironic that some small investors of Gold are out and commercials as a whole are short (hedged) 251,219 contracts.

Think of the possibilities if the breakout occurs now.

Could $612.00 Gold be the next stop?
Gold, due to high volatility, is not for the inexperienced trader.

Traders are not to exceed the rule of thumb - 10% of equity to risk ratio.
If you do not fit this risk profile, traders are advised to consult their account executive for an option trading strategy.
WHAT WERE TRADERS ADVISED TO DO?

Please view Archived Weekly Trade Advisor for 11/20/05.

http://www.cleartrade.com/images/letter_11.20.05.html

WHAT ARE TRADERS ADVISED TO DO NEXT WEEK?

Aggressive traders who established a long position in February Gold at 474.00 are advised to move stops below 469.50*.

Option traders who purchased April 470 - 500 bull call spreads are to continue to risk 70% of market price**.

Aggressive traders who either added to their existing long position or established a long position on multiple closes above 474.50 are advised to move stops below 469.50*.

Option traders who purchased April 490 - 520 bull call spreads are to continue to risk 70% of market price**.

Aggressive traders who either added to their existing long position or established a long position on multiple closes above 482.00 are advised to leave stops below 469.50*.

Option traders who purchased April 510 - 530 bull call spreads are to continue to risk 70% of market price**.

Aggressive traders who either added to their existing long position or established a long position on a higher high than 493.50 are advised to leave stops below 469.50*.

Option traders who purchased April 510 - 530 bull call spreads are to continue to risk 70% of market price**.

Below are possible ‘trading modules’ f! or futures traders to consider next week:

# 1) If the February Gold first posts a higher high than last week's high of 508.90 and posts a close above 510.00:

Aggressive futures traders are advised to either add to their existing long position or establish a long position, placing stops for this position below 480.00*.

Option traders are advised to either purchase April 510 - 550 bull call spreads, risking 70% of purchase price** or roll their previously established short April 500, 520 and 530 calls to April 550 calls**.

Rolling the previously established short portion of the bull call spread will increase trader's profit potential yet will still offer them needed protection. 

Our first objective will be a challenge of old highs at 520.00 (2/28/83).

# 2) If the February Gold posts multiple closes above 520.00:

Aggressive futures traders are advised to either add to their existing long position or establish a long position, placing all stops below 480.00*.

Option traders are advised to purchase April 520 - 560 bull call spreads, risking 70% of purchase price** or roll their previously established short April calls to April 560 calls**.

Rolling the previously established short portion of the bull call spread will increase trader's profit potential yet will still offer them needed protection. 

Our next objective will be a challenge of 545.50 (4/30/81).

# 3) If the February Gold posts multiple closes above 554.00:

Aggressive futures traders are advised to either add to their existing long position or establish a long position, placing all stops below 505.00*.

Option traders are advised to purchase April 550 - 590 bull call spreads, risking 70% of purchase price** or roll their previously established short April calls to April 590 calls**.

Rolling the previously established short portion of the bull call spread will increase trader's profit potential yet will still offer them needed protection. 

Our next objective will be a challenge of 612.00 (1/31/81).

# 4) If the February Gold posts multiple closes above 612.00:

Aggressive futures traders are advised to either add to their existing long position or establish a long position, placing all stops below 550.00*.

Option traders are advised to purchase April 610 - 640 bull call spreads, risking 70% of purchase price** or roll their previously established short April calls to April 630 calls**.

Rolling the previously established short portion of the bull call spread will increase trader's profit potential yet will still offer them needed protection. 

Our next objective will be a challenge of 65! 8.00 (12/31/80).

# 5) If February Gold first posts a lower low than last week's low of 497.20:

Aggressive futures traders are not advised to establish a position. 

Options traders are advised to not purchase option spreads.

# 6) If February Gold posts a close at or below 460.00:

Aggressive traders will have exited their long positions and are advised to sit on the sidelines and wait for another trading opportunity.

Option traders will have exited their bull call spreads and are advised to sit on the sidelines and wait for another trading opportunity.

Below are possible reversal ‘trading modules’ to consider next week:

# 7) If February Gold first posts a higher high than last week's high of 508.90 yet reverses, posting a lower low than last week’s low of 497.20:

Aggressive futures traders are not advised to add to their existing long position or establish a short position but are advised to leave stops below 469.50*.

Options traders are not advised to purchase April bull call spreads or purchase bear put spreads but are to prepare to exit their established April bull calls spreads if either February Gold posts a close at or below 469.50 or 70% of the current purchased price of the bull call spreads is reached**.

# 8) If February Gold first posts a lower low than last week's low of 497.20 yet reverses, posting a higher high than last week’s high of 508.90:

Aggressive futures traders are advised to place resting buy stop orders at 509.00.

If the resting buy stop order at 509.00 is activated, aggressive traders will have either added to their existing long position or established a long position.

If 509.00 is posted, aggressive traders are advised to place stops for this position below 480.00*.

Options traders are advised to prepare to purchase April 510 - 550 bull call spreads.

If 509.00 is posted, option traders are advised to purchase April 510 - 550 bull call spreads, risking 70% of purchase price**.

Our first objective will be a challenge of old highs of 520.00.

I have compiled some Gold option facts:

Gold options for a two-year ‘implied volatility’ average are ranked number 5 out o! f 45.

5) Gold (GC) High 22.56% - Low 10.31% - Current 17.32%.

Gold options for a one-year ‘implied volatility’ average are ranked number 1 out of 45.

1) Gold (GC) High 17.32% - Low 10.31% - 17.32%.

Gold options for a six-month ‘implied volatility’ average are ranked number 1 out of 45.

1) Gold (GC) High 17.32% - Low 10.31% - 17.32%.

Options are expensive.

DAILY CHART:
http://www.bohl.minot.com/d_Chart.cgi?GO06G
-----------------
WEEKLY CHART: http://www.bohl.minot.com/w_Chart.cgi?GO

* (Futures traders and their account executives are advised to discuss this suggested stop).

** (Option traders and their account executives are advised to discuss the suggested risk).

----------------------------------------------------

MARCH SILVER (SI6H)

Three weeks ago I began developing 'trading modules' for March Silver because of a weekly recommendation.

On 11/14/05, March Silver posted a weekly buy signal at 7.910

I will remind traders: Silver is not for the inexperienced trader. Volatility is at extreme levels.

Traders are not to exceed the rule of thumb - 10% of equity to risk ratio.

The ‘Commitment of Traders’ report for the Silver - published each Friday by the CFTC -  indicated the net change in open interest last week decreased by -4,562, posting a total open interest of 145,136 contracts.  

WHAT DOES THE MARCH SILVER CHART LOOK LIKE?

March Silver has been in a multi-year price advance that began from lows of 5.685 (5/11/04) to recent highs of 8.675 (12/02/05).

Three weeks ago I discussed the probability that the daily and weekly Silver charts appeared to be coiling for a major breakout at 8.050 vs. December Silver.

The daily chart had congested for four-weeks and was poised for a 60-cent price move.

The long-term weekly chart had developed an 18-month ‘pennant formation’ that began from lows of 5.510 to highs of 8.310.

I explained that a ‘pennant’ generally represents a brief pause in a dynamic market move. Pennants are one of the most reliable of continuation patterns.

Pennants must always be preceded by a sharp and almost straight-line move that has gotten ahead of itself, needing time to congest and breathe before running off in the same direction.

A bullish pennant resembles a small symmetrical triangle whereupon the pattern is completed on the penetration of either trendline.

Traders three weeks ago were asked to review the long-term weekly Silver chart’s time line.

On 4/04/03, Silver began a dramatic price move that began from lows of 4.350 and advanced in twelve months to highs of 8.310 (4/02/04).

This would be our upward pole.

1) From highs of 8.310, Silver traded to lows of 5.510 (5/14/04).

2) From lows of 5.510, Silver traded to highs of 8.190 (12/03/04).

3) From highs of 8.190, Silver traded to lows of 6.350 (1/07/05).

4) From lows of 6.350, Silver traded to highs of 7.640 (3/11/05).

5) From highs of 7.640, Silver traded to lows of 6.630 (9/02/05).

6) From lows of 6.630, Silver traded to recent highs of 8.675 (12/02/05).

These highs and lows described above developed the pennant and the eventual breakout above 8.050.

The all-important 'pennant' breakout occurred on multiple closes above 8.050 on 11/16/05 and confirmation of the breakout to the upside was a close above 8.190 on 11/25/05 (vs. December contract), which is now major support.

Several weeks ago I shared my personal objective of where Silver prices might go once Silver confirmed its major breakout of the pennant.

By my calculations - to get the projection - included the top of the pennant at 8.310 and the bottom of the pennant at 4.500.

I subtracted the pennants highs at 8.310 from the pennants lows at 4.550 and arrived at a difference of 3.76-cents.

! I add the difference of 3.76-cents to the upside breakout of 8.050 and found the projection at 12.070.

March Silver's 40-day moving average and 50-day moving average as of Friday were at 7.960 and 7.865, respectively.

March Silver's closed Friday at 8.647, which is above its 100-day moving average of 7.520 and its 200-day moving average of  7.445.

There are several unfilled price gaps below the current market price. The most recent unfilled price gap is between 8.240 and 8.285.

There is one unfilled price gap above the current market price between 10.800 and 11.000.

WHAT WERE TRADERS ADVISED TO DO?

Please view Archived Weekly Trade Advisor for 11/20/05.

http://www.cleartrade.com/images/letter_11.20.05.html

WHAT ARE TRADER! S ADVISED TO DO NEXT WEEK?

Aggressive traders who established a long position at 7.875 are advised to place stops below 7.990*.

Option traders who purchased March 800 - 850 bull call spreads are advised to continue to risk 70% of market price**.

Aggressive traders who established a long position on a higher high than 8.245 are advised to place stops below 7.990*.

Option traders who purchased March 800 - 875 bull call spreads are advised to continue to risk 70% of market price**.

Aggressive traders who established a long position on multiple closes above 8.310 are advised to place stops below 7.990*.

Option traders who purchased March 850 - 950 bull call spreads are advised to continue to risk 70% of market price**.

Our first objective of 8.610 was met last week.
Below are possible ‘trading modules’ for futures traders to consider next week:

# 1) If  March Silver first posts a higher high than last week's high of 8.675:

Aggressive futures traders are advised to either add to their existing long position or establish a long position, placing stops for this position below 8.150*.

Option traders are advised to purchase March 850 - 950 bull call spreads, risking 70% of purchase price**.

# 2) If March Silver posts a close above 8.940:

Aggressive traders are advised to either add to their existing long position or establish a long position, placing all stops below 8.260*.

Option traders are advised to purchase March 900 - 1000 bull call spreads, risking 70% of purchase price**.

# 3) If March Silver posts a close above 9.795:

Aggressive traders are advised to either add to their existing long position or establish a long position, placing all stops below 8.945*.

Option tr! aders are advised to purchase March 1000 - 1100 bull call spreads, risking 70% of purchase price**.

Our objective will be the unfilled price gap above the current market price between 10.800 and 11.000.

# 4) If March Silver posts multiple closes above 11.000:

Aggressive traders are advised to either add to their existing long position or establish a long position, placing all stops below 9.795*.

Option traders are advised to purchase March 1100 - 1200 bull call spreads, risking 70% of purchase price**.

Our objective will be 12.050.

# 5) If March Silver first posts a lower low than last week's low of 8.285:

Aggressive futures traders are not advised to add to their exiting long positio! n or establish a short position. Traders are advised to leave their stops as advised below 7.990*.

Options traders are not advised to purchase March bull call spreads or purchase bear put spreads. Option traders are advised to prepare to exit their established March bull call spreads if a close below 7.990 is posted** or 70% of previously purchased bull call spread prices were reached.

Below are possible reversal ‘trading modules’ to consider next week:

# 6) If March Silver first posts a lower low than last week's low of 8.285 yet reverses, posting a higher high than last week’s high of 8.675:

Aggressive futures traders are advised to place resting buy stop orders at 8.680.

If the resting buy stop order at 8.680 is activated, aggressive traders will have either added to their existing long position or established a long position.

If 8.680 is posted, aggressive traders are advised to place stops below 7.990*.

Options traders are advised to prepare to purchase March 850 - 950 bull call spreads.

If 8.680 is posted, option traders are advised to purchase March 850 - 950 bull call spreads, risking 70% of purchase price**.

Our first objective will be 8.940

# 7) If March Silver first posts a higher high than last week's high of 8.675 yet reverses, posting a close below 7.990:

Aggressive futures traders are advised to sit on the sidelines and wait for another trading opportunity.

Options traders are advised to sit on the sidelines and wait for another trading opportunity.

I have compiled some Silver option facts:

Silver options for a two-year ‘implied volatility’ average are ranked number 6 out of 45.

6) Silver (SI) High 40.09% - Low 19.14% - Current 28.51%.

Silver options for a one-year ‘implied volatility’ average are ranked number 5 out of 45.

5) Silver (SI) High 32.43% - Low 19.14% - 28.51%.

Silver options for a six-month ‘implied volatility’ average are ranked number 3 out of 45.

3) Silver (SI) High 29.68% - Low 19.14% - 28.51%.

Options are expensive.

DAILY CHART:
http://www.bohl.minot.com/d_Chart.cgi?SV06H
-----------------
WEEKLY CHART:
http://www.bohl.minot.com/w_Chart.cgi?SV

* (Futures traders and their account executives are advised to discuss this suggested stop).

** (Option traders and their account executives are advised to discuss the suggested risk).

----------------------------------------------------

MARCH S&P 500 (SP6H) / MARCH EMINI S&P (ES6H)

This week I will begin developing several 'trading modules' for the March S&P 500 because of a weekly recommendation for ! next week.

I have chosen to develop trading modules for the March contract because of the fast approaching last trading day for the December contract on 12/15/05. I advise less aggressive traders to use the Emini S&P as their trading vehicle.

I will remind traders: the S&P 500 is not for the inexperienced trader. 

Traders are not to exceed the rule of thumb - 10% of equity to risk ratio.

The proposed S&P weekly recommendation risk is $5,050, which means traders should have an account size of $50,000 per contract.

The proposed Emini S&P weekly recommendation risk is $1,237.50, which means traders should have an account size of $12,500 per contract.

The ‘Commitment of Traders’ report for the S&P 500 - published each Friday by the CFTC -  indicated the net change in open interest last week increased by 4,215, posting a total open interest of 664,728 contracts.  

The ‘Commitment of Traders’ report for the Emini S&P - published each Friday by the CFTC -  indicated the net change in open interest last week increased by 36,164, posting a total open interest of 1,246,705 contracts.  

WHAT DOES THE MARCH S&P CHART LOOK LIKE?

The March S&P has been in a seven-week price advance that began from lows of 1180.50 (10/13/05) to recent highs of 1280.50 (11/23/05).

Recently, the S&P has traded from highs of 1280.50 to lows of 1259.00 (11/30/05).

Currently, the S&P has traded from lows of 1259.00 to highs of 1276.00 (12/02/05).

The long-term weekly and monthly charts show the S&P in a multi-year rally that began from lows of 767.50 (10/18/02) to recent highs of 1272.70 (vs. the December contract).

Both the weekly and monthly long-term charts have a distinct upward parallel channel. The bottom of the channel began from lows of 787.50 (3/14/03) through lows of 1172.00 (10/14/05) and if the trendline were touched today it would be at 1193.00.

For next week the March S&P 500 has a weekly recommendation: buy when trades 1279.10 - sell when trades 1258.90.

For next week the March Emini S&P has a weekly recommendation: buy when trades 1281.00 - sell when trades 1256.25.

Could this be the beginning of the year-end rally?

If this were the final push up for the year end what would be our objective?

My conservative guess would be 1302.00. However, my aggressive guess would be 1327.40.

If there were a price failure, where would the S&P trade to?

My conservative guess would be 1237.50.

Last year's high for the March S&P 500 was 1219.70. I believe the S&P will continue to trade above this price level through the end of the year.

Major support is at 1219.70.

The highs, for the March S&P 500 in 2001 was 1390.00. I believe the S&P will not trade above the highs posted in 2001.

Major resistance is at 1390.00.

The mid-point between the highs for 2004 and 2001 is at 1304.85.

This most likely will be where the March S&P will gravitate to by year's end.

Below I have listed the trade signals posted for the last seven weeks:

On 10/19/05, The March S&P posted an 'intra-week' buy signal at 1203.00.

On 10/24/05, The March S&P posted a weekly buy signal at 1208.60.

On 11/02/05, The March S&P posted an 'intra-day' buy signal at 1217.10.

On 11/10/05, The March S&P posted an 'intra-day' buy signal at 1236.30.

On 11/17/05, The March S&P posted a daily buy signal at 1242.60.

On 11/28/05, The March S&P posted a daily sell signal at 1274.90.

On 11/30/05, The March S&P posted a daily sell signal at 1267.20.

WHAT ARE TRADERS ADVISED TO DO NEXT WEEK?

Below are possible ‘trading modules’ for futures traders to consider next week:

# 1) If the March S&P first posts a weekly buy signal at 1279.10:

Aggressive futures traders are advised to wait for a close above last month's high of 1280.50 before establishing a long position, placing stops at 1258.90*.

# 2) If the March S&P posts a close above 1288.50:

Aggressive traders are advised to either add to their existing long position or establish a long position, placing stops for this position below 1279.10*.

Our first objective will be a challenge of the middle of the previously mentioned middle ground (pivot) 1304.85.

# 3) If the March S&P posts a close above 1310.80:

Aggressive traders are advised to either add to their existing long position or establish a long position, placing all stops below 1280.50*.

Our objective will be a challenge of old highs at 1319.00, which were posted on 5/25/01.

# 4) If the March S&P posts multiple closes above 1319.00:

Aggressive traders are advised to either add to their existing long position or establish a long position, placing all stops below 1288.50*.

Our objective will be an all out assault on highs of 1342.00, which were posted on 2/16/01.

# 5) If the March S&P first posts a weekly sell signal at 1258.90:

Aggressive futures traders are not advised to establish a short position. Traders are advised to wait for another trading opportunity.

Below are possible reversal ‘trading modules’ to consider next week:

# 6) If the March S&P first posts a weekly sell signal at 1258.90 yet reverses, posting a weekly buy signal at 1279.10:

Aggressive futures traders are advised to place resting buy stop orders at 1279.10.

If the resting buy stop order at 1279.10 is activated, aggressive traders will have established a long position.

If 1279.10 is posted, aggressive traders are advised to place stops at 1256.25*.

Our first objective will be 8.940

# 7) If the March S&P first posts a weekly buy signal at 1279.10 and a higher high than last month's high of 1280.50 yet reverses, posting a close at or below 1210.70 on December 30th:

Aggressive futures traders are advised to establish a short position.

If the March S&P does post a monthly close at or below 1210.70 by the close of business December 30th, this would constitute an 'intra-month' sell signal and would suggest a continuation pattern conducive to lower prices.

If this 'trading module' were activated, aggressive traders are advised to place stops above 1258.90.

Our first objective will be 1168.90.

DAILY CHART:
http://www.bohl.minot.com/d_Chart.cgi?SP05Z
-----------------
WEEKLY CHART:
http://www.bohl.minot.com/w_Chart.cgi?SP 

* (Futures traders and their account executives are advised to discuss this suggested stop).

** (Option traders and their account executives are advised to discuss the suggested risk).  

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 DECEMBER:

 - FEBRUARY LEAN HOGS LH6G)

- FEBRUARY PORK BELLIES (PB6G)

FUTURE WATCH

Future watch will list developing 'monthly' recommendations to watch in December for January. 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 December 30 and sent via email for January.

 - Potential monthly recommendations will be published in future Weekly Trade Advisors.

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 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

* 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.

ClearTrade® Inc.
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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.

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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