WELCOME TO CLEARTRADE'S NEWSLETTER
ClearTrade's trading recommendations and weekly commodity newsletter was first published in October 1998. Since that time, our research has continued to evolve into an important source of technical insight for many traders. Our goal is to provide traders with a 'game plan' to prepare for the trading day and week ahead.
ClearTrade's technical analyst, Scott Joss, is a veteran futures trader with twenty-eight years experience on and off the trading floor - as a pit trader, account executive handling arbitrage for Smith Barney, former member of the CBOT 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 our research and/or 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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- TECH TALK
- CHART WATCH
- CURRENT 'MONTHLY' RECOMMENDATION
- FUTURES WATCH
- WEEKLY FEATURE
- FED WATCH
- COMING EVENTS AND DATA RELEASES
TECH TALK by Scott R. Joss (Non member C.T.A)*
MARCH S&P 500 (SP5H)
Traders were advised that if the S&P 500 failed to close below 1175.70 by the close of business January 31st that the S&P would push upward, forcing traders to cover their short positions.
On January 31st, the S&P 500 closed at 1181.70. Since then prices have moved dramatically higher to 1209.80 (2/11/05).
On 2/1/05, the S&P filled a price gap that had been between 1183.00 and 1183.20.
The S&P has an unfilled price gap below the current market price between 1175.70 and 1177.30.
WHAT TRADERS WERE ADVISED TO DO LAST WEEK
Traders who established a long position at the 1183.20 price gap were advised to move their stops from 1175.70 to below 1191.50.
Furthermore, if the S&P fell back to support at 1195.10, traders were advised to either add to their existing long position or establish a long position, placing stops below 1191.50.
In addition, if the S&P posted a weekly close above last week's high of 1204.20, traders were advised to either add to their existing long position or establish a long position, placing stops for this position only below 1197.50.
WHAT SHOULD TRADERS DO NEXT WEEK?
Traders who established a long position at the 1183.20 price gap should move their stops from below 1191.50 to below 1197.50.
Traders who either added to their existing long position or established a long position on a weekly close above 1204.20 should place their stops below 1197.50.
If the S&P falls back to support at 1199.50, traders are advised to either add to their existing long position or establish a long position, placing stops below 1197.50.
If the S&P posts a weekly close above last week's high of 1209.80, traders are advised to either add to their existing long position or establish a long position, placing all stops below 1204.20, which was the previous week's high.
Our objective will be a challenge of contract highs at 1220.50.
If the S&P were to post a weekly close above contract highs at 1220.50, traders are advised to either add to their existing long position or establish a long position, placing all stops below 1209.80 - which was last week's highs.
Our objective will be 1276.50.
On the flip side....
If the S&P were to post a weekly settlement below 1199.50, traders are advised to use caution by either placing all stops below 1197.50 or exiting their long position.
If the S&P were to post a weekly close below 1191.80, traders are advised to establish a short position, placing stops above 1197.50.
Our objective, if this were to occur, would be the unfilled price gap left below the current market price at 1175.70.
Conservative traders are advised to use the E-mini S&P as their primary trading vehicle.
DAILY CHART:
http://bohl.minot.com/d_Chart.cgi?SP05H
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WEEKLY CHART:
http://bohl.minot.com/w_Chart.cgi?SP
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MAY SOYBEANS (S5K)
Over the last several weeks I've discussed March soybeans. However, this week I'll begin technical analysis on May soybeans because rollover has begun.
May soybeans were in a four month price consolidation between 514.75 (1/21/05) lows and 571.00 (11/24/04) highs.
On 1/27/05, soybeans closed below the all-important 514.75 level.
There are three unfilled price gaps above the current market price - the first between 543.00 and 544.00, the second between 571.00 and 573.50, and the third between 609.50 and 624.50.
There is an unfilled price gap below the current market price between 511.50 and 512.25.
WHAT DO THE CHARTS LOOK LIKE?
On 1/27/05, a price breakout occurred with soybeans closing below their five month trading range of 514.75 to 571.00.
After last week's USDA report, soybeans moved dramatically higher from 501.00 lows to recent highs of 527.00.
In effect, it appears the old adage 'sell the rumor - buy the fact' was adhered to by traders.
On 2/9/05, soybeans posted a daily buy signal at 508.75.
Are soybeans back in their trading range between 514.75 to 571.00?
WHAT SHOULD TRADERS DO NEXT WEEK?
Traders who established long positions at the daily buy signal of 508.75 should move their stops below 514.75.
If soybeans prices pull back to support at 518.00, traders are advised to either add to their existing long position or establish a long position, placing stops below 514.75.
Conservative traders are advised to purchase May 540 calls, risking 50% of purchase price.
If soybeans post a weekly close above last week's highs of 527.00, traders are advised to either add to their existing long position or establish a long position, placing stops below 518.00.
Conservative traders are advised to purchase May 540 calls, risking 50% of purchase price.
Our objective, if this were to occur, would be 534.00.
If soybeans post a weekly close above 537.00, traders are advised to either add to their existing long position or establish a long position, placing all stops below 527.00.
If soybeans were to fill the price gap above the current market price between 543.00 and 544.00, traders are advised to either add to their existing long positions or establish a long position, placing all stops below 534.00.
Our objective, if this were to occur, would be 551.00.
If soybeans were to close above 554.00 on a monthly basis by the close of business February 28th, traders are advised to either add to their existing long position or establish a long position, placing all stops below 543.00.
Our objective, if this were to occur, would be a challenge of the top end of the soybeans four month price consolidation of 571.00.
On the flip side....
If soybeans were to post a weekly settlement below 514.75, traders are advised to use caution and prepare for an assault on the gap between 511.50 and 512.25.
If soybeans were to post a weekly close below 511.50, traders are advised to establish a short position, placing stops above 516.50.
If soybeans were ever to post a weekly close below contract lows of 501.00, traders are advised to either add to their existing short position or establish a short position, placing stops above 512.25.
Conservative traders are advised to purchase May 480 puts, risking 50% of purchase price.
If this were to occur, our price objective would be 484.50 - and possibly 475.00.
DAILY CHART:
http://bohl.minot.com/d_Chart.cgi?S05K
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WEEKLY CHART:
http://bohl.minot.com/w_Chart.cgi?S
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MAY WHEAT (W5K)
Over the last several weeks I've discussed March wheat. However, this week I will begin technical analysis on May wheat because rollover has begun.
May wheat has been in a nine month price decline which began from highs of 430.00 (4/12/04) to recent lows of 295.00 (1/31/05).
May wheat has an unfilled price gap above the current market price between 332.00 and 333.00.
WHAT DO THE CHARTS LOOK LIKE?
Wheat had been in a nine-week price consolidation between 300.25 and 319.00.
On 1/27/05, a price breakout occurred with wheat closing below their nine-week trading range of 300.25 and 319.00.
On 2/10/05, wheat posted an intra-day buy signal at 301.25.
Is wheat, like soybeans, back in their trading range between 300.25 and 319.00?
The daily and monthly chart show a possible bullish 'spread double' bottom has been formed.
On 1/31/05 and on 2/4/05, wheat posted lows of 295.00.
WHAT SHOULD TRADERS DO NEXT WEEK?
Traders who established long positions at the intra-day buy signal of 301.25 should leave their stops below 295.00.
May wheat has a daily recommendation for Monday: buy when trades 305.25 - sell when trades 302.00.
If wheat posts a daily sell signal at 302.00, traders are advised to NOT establish a short position.
If wheat prices pull back to support at 301.00, traders are advised to either add to their existing long position or establish a long position, placing stops below 295.00.
Conservative traders are advised to purchase May 310 calls, risking 50% of purchase price.
If wheat posts a daily buy signal at 305.25, traders are advised to either add to their existing long position or establish a long position, placing stops below 295.00.
If wheat posts a weekly close above last week's highs of 305.00, traders are advised to either add to their existing long position or establish a long position, placing stops for this position only below 302.00.
Conservative traders are advised to purchase May 310 calls, risking 50% of purchase price.
Our first price objective will be 309.00.
If wheat posts a weekly close above 312.25, traders are advised to either add to their existing long position or establish a long position, placing all stops below 302.00.
Our objective, if this were to occur, would be a challenge of the top end of wheat's nine-week price consolidation of 319.00.
On the flip side....
If wheat were to post a weekly settlement below 296.50, traders are advised to use caution and prepare for an assault on the 'spread double' bottom at 295.00.
If wheat were to post a weekly close below 295.00, traders are advised to establish a short position, placing stops above 297.00.
Conservative traders are advised to purchase May 290 puts, risking 50% of purchase price.
If this were to occur, our price objective would be 288.00 - add possibly 285.00.
DAILY CHART:
http://bohl.minot.com/d_Chart.cgi?W05K
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WEEKLY CHART:
http://bohl.minot.com/w_Chart.cgi?W
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MAY ORANGE JUICE (OJ5K)
Several weeks ago, I identified a 'weekly coil' in juice from the trading range the previous two weeks. Each previous weekly range had constricted... higher lows and lower highs. In effect - what ultimately should and did occur is an unleashing of the coil which violently propelled prices higher.
On 2/1/05, juice broke out of its 'weekly coil' posting a weekly buy signal at 85.55.
Juice has been in a nine-week trading range, which began from lows of 80.10 (1/7/05) to highs of 90.15 (12/07/04).
Juice has an unfilled price gap below the current market price between 76.95 and 77.10.
Juice has a monthly recommendation for February: buy when trades 90.00 - sell when trades 80.05.
WHAT TRADERS WERE ADVISED TO DO LAST WEEK
Traders who established long positions at the weekly buy signal 85.55 should place stops below 84.00.
If juice trades 87.45, traders were advised to either add to their existing long position or establish a long position, placing all stops below 84.00.
If juice posted a monthly buy signal at 90.00, traders were advised to either add to their existing long position or establish a long position, placing all stops below 87.45.
Our objective will be a challenge of contract highs of 96.00.
WHAT SHOULD TRADERS DO NEXT WEEK?
Traders who established long positions at the weekly buy signal 85.55 should move their stops from 84.00 to below 85.25.
Traders who established long positions at 87.45 should move their stops from 84.00 to below 85.25.
If juice posts a monthly buy signal at 90.00, traders are advised to either add to their existing long position or establish a long position, placing all stops below 87.45.
Our objective will be a challenge of contract highs of 96.00.
On the flip-side...
If juice posts a close below last week's lows 85.60, traders are advised to use caution and prepare for an assault on the 'coil' weekly buy signal at 85.25.
If juice posts a weekly close below 85.25, traders are advised to establish a short position, placing stops above 86.00.
If juice posts a close below 82.30, traders are advised to either add to their existing short position or establish a short position, placing all stops above 85.25.
Our objective will be a challenge of 81.30 lows.
If juice posts a month sell signal at 80.00, traders are advised to either add to their existing short position or establish a short position, placing all stops above 81.30.
Our objective will be a challenge of lows at 79.25.
If juice posts a close below 78.50, traders are advised to either add to their existing short position or establish a short position, placing all stops above 80.10.
Our objective will be the unfilled price gap between 76.95 and 77.10.
DAILY CHART:
http://bohl.minot.com/d_Chart.cgi?OJ05K
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WEEKLY CHART:
http://bohl.minot.com/w_Chart.cgi?OJ
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MARCH JAPANESE YEN (JY5H)
Last week, I moved the yen from 'chart watch' to 'Tech Talk' because of a monthly recommendation for February.
The yen had been in a six-week trading range, which began from lows of .9476 (12/10/04) to highs of .9885 (12/02/04).
The monthly recommendation for February was: buy when trades .9874 - sell when trades .9548.
WHAT TRADERS WERE ADVISED TO DO LAST WEEK
If the yen rallied to .9587, traders were advised to establish a short position, placing stops above .9622.
If the yen posted a monthly sell signal at .9548, traders were to either add to their existing short position or establish a short position, placing stops above .9622.
If the yen posted a close below .9476, traders were advised to either add to their existing short position or establish a short position, placing all stops above the monthly sell signal of .9548.
Our objective was the unfilled gap between .9445 and .9454.
On 2/10/05, the yen met our objective and concluded our trading objective.
Cheers...
DAILY CHART:
http://bohl.minot.com/d_Chart.cgi?JY05H
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WEEKLY CHART:
http://bohl.minot.com/w_Chart.cgi?JY
CHART WATCH by Scott R. Joss (Non member C.T.A)*
Readers and clients call during the week and ask: What are you watching?
Watching can mean that the markets are developing a 'recommendation' or a chart pattern that has not yet fully developed - or may never develop.
During the course of the week or month it is not uncommon to find an `intra-day, intra-week or intra-month' recommendation that was previously not revealed when this newsletter was written.
Products that currently fit into this 'watch' category are listed below and should be 'watched.'
===========================
MAY SUGAR (SB5K)
This week sugar is on 'Chart Watch' because of a daily and weekly recommendation for next week.
Also, sugar maybe developing a 'monthly' recommendation for March, which will not be revealed until the close of business February 28th.
However, sugar might not be as forthcoming with its direction as I would like for next week. Until the technical indicators line up more conclusively, only aggressive traders should initiate trade signals.
If sugar can stay in its current trading range between 9.12 and 9.58 for two more weeks, the more reliable our trading signals will be.
Can sugar tread water for two more weeks? If it does, then a monthly recommendation is assured for March.
The monthly recommendation, the most powerful trading signal, would add to the direction and momentum of sugar. Also, our risk would be much more defined.
Sugar has been in a twelve month price advance that began from lows of 6.18 (2/13/04) to recent highs of 9.58 (1/26/05).
Recently, sugar has been in a price consolidation between 9.12 lows and 9.58 highs.
Sugar has a daily recommendation for Monday: buy when trades 9.54 - sell when trades 9.37.
Sugar has a weekly recommendation for next week: buy when trades 9.54 - sell when trades 9.28.
WHAT DO THE CHARTS LOOK LIKE?
Sugar has a long-term upward trendline that began from lows of 6.18 through lows of 6.52, lows of 8.85, and if touched today would intersect at 9.12.
On the daily chart, sugar has developed a pattern of posting new highs and then pulling back from those highs. These price pullbacks can range anywhere between 45-cents to 58-cents. This pattern has occurred six times in the last five-months.
Recently, sugar posted a high of 9.58 and a price pullback of 46-cents to lows of 9.12.
The weekly and monthly charts appear to have developed a 'W' formation. The middle of the 'W' on both the weekly and monthly charts is at 9.13.
For traders that follow Ken Roberts, this 'W' would represent a 'one-two-three bottom' formation.
WHAT SHOULD TRADERS DO NEXT WEEK?
If sugar posts a daily and weekly buy signal at 9.54, traders are advised to establish a long position, placing all stops at the weekly sell signal at 9.12.
If sugar posts a close above 9.58, traders are advised to either add to their existing long position or establish a long position, placing stops below 9.12.
If sugar posts a close above 10.15, traders are advised to either add to their existing long position or establish a long position, placing all stops below 9.58.
If sugar posts a close above 10.51, traders are advised to either add to their existing long position or establish a long position, placing all stops below 10.15.
If sugar posts a close above 11.40, traders are advised to either add to their existing long position or establish a long position, placing all stops below 11.15.
Our first objective will be 12.16.
Our second objective will be 12.88.
Our long-term objective will be a challenge of major resistance at 14.40.
On the flip-side...
If sugar posts a daily sell signal at 9.37, traders are advised to use caution and prepare for an assault on the weekly sell signal at 9.28.
If sugar posts a weekly sell signal at 9.28, traders are advised to use caution and prepare for an assault on the monthly lows for February, which is also the middle of the 'W' formation at 9.12.
If sugar posts a weekly close below 9.11, traders are advised to establish a short position, placing stops above 9.28.
If sugar posts a monthly close below 8.85, traders are advised to either add to their existing short position or establish a short position, placing stops above 9.12.
If sugar posts a close below 8.51, traders are advised to either add to their existing short position or establish a short position, placing stops above 8.85.
Our first objective will be 8.66.
If sugar posts a close below 8.27, traders are advised to either add to their existing short position or establish a short position, placing stops above 8.51.
Our second objective will be 7.89.
DAILY CHART:
http://bohl.minot.com/d_Chart.cgi?SB05K
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WEEKLY CHART:
http://bohl.minot.com/w_Chart.cgi?SB
CURRENT 'MONTHLY' RECOMMENDATIONS
FOR FEBRUARY:
- MARCH TEN YEAR NOTES (TY5H)
- MAY ORANGE JUICE (OJ5K)
- MAY COFFEE (KC5K)
- MARCH JAPANESE YEN (JY5H)
- MARCH CANADIAN DOLLAR (CD5H)
FUTURE WATCH
Future watch will list developing 'monthly' recommendations to watch in February for March use. By listing these products, traders can `feed-forward' with anticipation and focus - centering on products that will provide direction and hopefully, opportunity.
Traders should begin studying the 'daily', 'weekly' and 'monthly' charts for the products listed below. Don't forget between now and the end of the month, some or all of these products may be de-listed.
'Monthly' recommendations will be revealed on the close of business February 28th and sent via email for March use.
- Potential 'Monthly' recommendations for March will be posted as the month progresses.
WEEKLY FEATURE
The International Energy Agency said Friday that Russia's oil production has dropped from roughly 9.7 to 9.3 million barrels per day over the past four months, hurt by the breakup of Yukos. They also predict that Russia's oil production will increase 4% in 2005.
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July soybeans closed up Friday with talk of drier weather in southern Brazil.
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The rates on 30 year mortages fell again Friday for the sixth consecutive week, ending at 5.57%, down from 5.63% the previous week.
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BBC News reported that the Ivory Coast's army chief of staff has warned that he may be close to launching pre-emptive attacks against the rebels in the northern half of the country. Also, cocoa arrivals at Ivory Coast ports are down 17% so far this season compared to a year ago.
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There are freeze warnings in effect for the northern part of central Florida, but no significant damage to the citrus groves is expected to occur.
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U.S Treasury Notes May Fall; Fed's Greenspan Seen Optimistic on Economy
Feb. 14 (Bloomberg) -- U.S. Treasury notes may fall on speculation Federal Reserve Chairman Alan Greenspan will provide an optimistic assessment of the economy in his semiannual testimony to Congress this week.
Ried, Thunberg & Co.'s weekly index on the outlook for government securities fell to 40 from an 11-week high of 42. Readings below 50 mean those surveyed expect the 10-year note's price will be lower by the end of March. The 40 international money managers polled by the Jersey City, New Jersey-based bond- research firm oversee $1.28 trillion.
Greenspan is likely to say a combination of job growth, economic expansion, and rising corporate profits may lead to faster inflation, underpinning the need for the Fed to continue raising interest rates. The central bank boosted its interest- rate target for overnight loans between banks six times since June, to 2.5 percent from 1 percent. A government report on Feb. 10 showed weekly jobless claims fell to a four-year low.
``He'll be quite optimistic on the economy and may indicate some caution or concern on inflation,'' said Paul O'Brien, part of a group that manages $70 billion in bonds at Morgan Stanley Asset Management in West Conshohocken, Pennsylvania. Such comments would prompt investors to price in additional Fed rate increases, ``a negative for bond prices,'' he said.
The funds O'Brien manages have a smaller percentage of Treasury debt maturing in two to five years than their benchmarks, as he expects those yields will increase the most as the Fed raises rates. O'Brien isn't a Ried Thunberg survey participant.
The yield on the 4 percent note maturing in February 2015, which was auctioned by the Treasury Feb. 10, ended last week at 4.08 percent, unchanged from where the yield on the old 10-year security, a 4 1/4 percent note due in November 2014, closed a week earlier. Yields move inversely to bond prices.
CLICK HERE FOR MORE
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Weather Market Commentary
Friday, February 11, 2005
Soybean traders are still expressing some apprehension about growing conditions in southern Brazil. Though it has been far from completely dry, we have now gone about two months since a general soaking rain has fallen in Rio Grande do Sul of Brazil. I track rainfall at four stations that are located in or near the soybean growing areas of that state, and I show that two of them have recorded less than half of their normal rainfall since January 1. It's probably again worth noting that this dryness in recent weeks has been expanding. Southern parts of Mato Grosso do Sul have not had a real good rain since January 30, and for a state like Parana or a neighboring country like Paraguay one has to go back to January 25 to find the last big rain. I show rainfall totals in Paraguayan soybean areas as uniformly below normal since the beginning of the year. With Paraguayan soybean production forecast to reach five million metric tons this year, that's an area that is worth paying attention to. For all of the above-mentioned areas, it is very difficult to determine when a good soaking rain will again fall; I would not expect such rains before February 21. Maybe it is too late in the year to inflict big losses on the South American crop, but the market may desire a good soaker for southern Brazil before it again entertains ideas of taking nearby soybean futures back to fresh contract lows.
Weather and market report
by Craig Solberg
CLICK HERE FOR MORE
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USDA Drought Monitor
CLICK HERE FOR MORE
FED WATCH
Fed's Bernanke Says Price Targeting Helped Latin America Reduce Inflation
Feb. 11 (Bloomberg) -- Inflation targets and flexible exchange rate policies helped reduce inflation in Latin America, Federal Reserve Governor Ben Bernanke said.
Together those ``serve to reduce the conflict between domestic economic stability and the free movement of capital,'' Bernanke said in the text of his remarks at the Stanford Institute for Economic Policy Research in Palo Alto, California.
The Fed governor didn't mention the U.S. economy or the state of monetary policy in the text of his remarks.
Bernanke said earlier experiments in the region with exchange-rate bands or direct links to the dollar helped lower prices.
``However, a key lesson of the recent experience is that fixed exchange rates are generally not a long-run solution, at least not in a world of high capital mobility,'' he said.
To preserve low inflation, estimated at about 6.5 percent on average for the region in 2004, Bernanke said Latin America must continue to focus on fiscal restraint as well as an overhaul of financial markets and assure central bank independence.
Bernanke voted to lift the Fed's overnight lending rate to 2.5 percent on Feb. 2. The Fed's Open Market Committee next meets March 22.
CLICK HERE FOR MORE
February 2005 |
15 - U.S. retail sales.
16 - U.S. industrial production. Housing starts.
17 - U.S. leading indicators.
18 - Producer prices. Cattle on feed.
21 - Presidents' day. U.S. markets closed.
22 - Cold storage.
23 - Consumer price index.
24 - Durable goods.
25 - U.S. GDP Q4. Existing home sales.
28 - U.S. personal incomes. New home sales.
|
NOTE:
If you do not completely understand this information, you are advised to take NO action until speaking with your Account Executive.
ClearTrade, Inc. may be reached, toll free, at 800-493-4444
====================================
* Recommendations and Newsletter prepared by Scott Joss, Non Member C.T.A.
Scott Joss is a 'non member' CTA and is providing recommendations to ClearTrade, Inc. clients. Scott Joss 'is a principal' of ClearTrade, Inc. and 'is a registered IB member' with the NFA.
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* COMING EVENTS AND DATA RELEASES:
Calendar provided by Briefing.com, Inc. Data is provided for informational purposes only, and is not intended for trading purposes. Neither ClearTrade, Inc. nor any of its data or content providers (such as Reuters, CSI, and Briefing.com) shall be liable for any errors or delays in the content, or for any actions taken in reliance thereon.
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Past results are no indication of future performance. Information provided in this newsletter is intended solely for informative purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.
Scott Joss is a 'non member' CTA and is providing recommendations to ClearTrade, Inc. clients. Scott Joss 'is a principal' of ClearTrade, Inc. and 'is a registered IB member' with the NFA.
NOTE: Past results are no indication of future performance. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.
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