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
•  COMING EVENTS AND DATA RELEASES

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

Although there has been no announcement emanating from the White House or any U.S regulatory agency,  the fact that the U.S. Dollar has broken out of its three-year downtrend suggests that either there may be some type of policy change around the corner or we may be looking at a long overdue market correction of the Dollar. Therefore, it’s especially important that traders understand the big picture as it pertains to the Dollar - which is why the bulk of this week’s newsletter focuses on the Dollar’s technical  ‘timeline’ from 1989 to present.
Because of the upcoming Memorial Day holiday, there will be no newsletter next weekend. Therefore, it is especially important that our clients contact us over the next few weeks to monitor market conditions.
Traders should also note that some markets will be closing early on Friday - and that all markets are closed Monday.
JUNE US DOLLAR (DXM5)
For the last six weeks I have been relaying to my clients that the Dollar was developing a bullish formation that may soon break out on the upside.
Some were resistant to the thought that the Dollar would reverse its three-year downward trend.
Is there a policy change around the corner or is this just a long over due correction in the Dollar?
Traders who have been long-term readers may remember my 2001-2002 newsletters discussing the impending top of the Dollar at the 121.00 level.
How did I arrive at the 121.00 level?
The Dollar had been in a bottoming formation between 1989 and 1997 before its upward price breakout.
The Dollar had posted highs of 106.52 (6/30/89), traded back to its lows of 78.95 (8/31/92).
From the lows of 78.95 the Dollar once again had a price advance to 97.85 (1/31/94).
From the 97.85 highs the Dollar again tried to assault the 78.95 lows but couldn’t quite approach that level before buyers stepped in at 80.14 (4/30/95).
The formation that was revealed after six-years of a weak Dollar was a bullish ‘head and shoulders bottom.’
The ‘left shoulder’ was established between 106.52 highs through 80.60 lows (2/28/91).
The ‘head’ formed between 93.53 highs and 78.95 lows.
The ‘right shoulder’ developed between 80.14 lows and 93.45.
The all-important ‘neck line’ breakout occurred at 93.45.
Simply put, I subtracted the highs at 106.52 from the lows of 78.95 and added the difference to the ‘neckline’ breakout of 93.45.
106.52 - 78.95 = 27.57.
93.45 + 27.57 = 121.02
On 7/31/01, the Dollar posted highs of 121.29 - our long-term objective was met.
Now let’s find where true value should have been established for the Dollar after the 2000 - 2002 highs. 
Between 2000 and 2001 the Dollar again developed a ‘head and shoulders’ formation, only this time it was a top.
The ‘left’ shoulder was established between 105.12 (6/30/00) lows and 118.90 (10/31/00) highs.
The ‘head’ formed between 108.04 (1/31/01) lows and 121.29 highs.
The ‘right’ shoulder developed between 120.80 (1/31/02) highs and 104.12 (7/31/02) lows.
The all-important ‘neckline’ breakout occurred at 104.12.
Let us use our previously discussed method to find our objective - or fair value of the Dollar.
I subtracted the highs at 121.29 from the lows of 104.12 and subtracted the difference from the ’neckline’ breakout of 104.12.
121.29 - 104.12 = 17.17.
104.12 - 17.17 = 86.95.
On 12/03, the Dollar posted lows of 86.70 - our long-term objective was met. 
So maybe you are wondering why the Dollar recently posted lows of 80.48.….
Was the 6 point price difference in our long-term objective 86.70 and recent lows at 80.48 attributed to an all out assault on the lows first mentioned in this article at 80.14 (4/30/95)?
Or is history again repeating itself - coming full circle?
Currently the Dollar posted a close Friday at 86.67.
WHY IS THIS TIMELINE OF THE U.S. DOLLAR SO IMPORTANT?
Because the U.S. Dollar is king and therefore has the ability to influence all products and markets.
For several weeks I have developed ‘trading modules’ for the British Pound, Crude Oil, Gold, Yen, S&P 500 and each have one common denominator…. the U.S. Dollar.
How will each of these products react to a Dollar price advance?
A known factor is that the Swiss Franc and Euro-Currency (FX) always move opposite the Dollar.
The Pound, Canadian and Yen can move with the dollar or opposite the Dollar depending on their government policies. However, for the last several years they have moved opposite the Dollar.
The metals generally move opposite the Dollar.
The S&P 500 tends to move with the Dollar.  However, for the past two years it has moved opposite the Dollar.
Energies more often than not have moved opposite the Dollar.
Grains have a life of their own - depending more on weather, supply and demand.
WHAT DOES THE DOLLAR CHART SHOW?
The Dollar has possibly posted a spread double bottom, a low equal to the lows posted in 1995.
The daily Dollar chart had a downward trendline that began from highs of 120.94 (3/01/02) through highs of 90.95 (9/08/04) and was penetrated on 4/04/05 at 84.75.
After the initial penetration at 84.75, the Dollar traded to 85.14 before falling to retest the apparent major breakout. The subsequent price decline sent prices down to 88.31 on 4/22/05.

The Dollar needed a close above 85.14 to confirm a bottom for the dollar.
The confirmation of a breakout occurred on 5/12/05 when the dollar posted a close above 85.14.
The weekly and monthly charts also support the daily charts.
WHAT DOES THE CASH DOLLAR CHART SHOW?
The cash Dollar is what I watch because the price movement is fluid.
The cash Dollar chart, just as the futures Dollar chart, broke out on the upside of its major downward trendline.
The cash Dollar has recently developed a bullish ‘cup’ with a ‘handle’ formation.
The cup formation started with the first high the cash Dollar posted at 85.39 following the initial breakout.
After posting highs of 85.39, the cash Dollars price fell to 81.28 before finding major support at 81.28.
From 81.28 lows the cash Dollar again advanced with a second assault on the 85.39 highs - yet only reaching 85.32 highs.
The Dollar price movement from 85.39 highs to 81.28 lows back to 85.32 highs formed the ‘cup.’
The most important feature of this cup formation is the ‘handle’ because when the breakout occurs above the cup, a major move is imminent.
The ‘handle’ was formed from 85.32 highs to 83.36 lows.
On 5/12/05, the cash Dollar advanced, breaching the cups highs of 85.39.
Once the cash Dollar posted a close above 85.39 highs, the buy signal was given.
WHAT IS THE TRADING OBJECTIVE OF THE U.S. DOLLAR?
Our short-term objective will be 87.21
Our intermediate objective will be 89.60
Our long-term objective will be 90.46.

If the U.S. Dollar posts a close above 1994 high’s of 92.29 would suggest a policy change has occurred.
WHAT WERE TRADERS ADVISED TO DO?
Traders were advised to not trade the Dollar because of low volume. However, they were advised to establish various positions based on the Dollars direction and influence.
Positions established could be products that move opposite the Dollar - such as currencies ranging from the Euro, Swiss, Pound, Yen, Gold, Silver or products that move in tandem with the Dollar - such as the Nasdaq 100, S&P 500, and Dow Jones.
WHAT SHOULD TRADERS DO NEXT WEEK?
Next week will be volatile and compact because of the upcoming Memorial Day holiday.
Markets will close early Friday and are closed on Monday.
GOLD:
On 5/12/05, traders were advised to establish a short position in Gold based on a ‘broadening’ formation sell signal at 423.40.
Traders are advised to remain short unless Gold posts a weekly close above 423.50.
Our objective is 407.90.
SILVER:
On 5/20/05, traders were advised to establish a short position in Silver based on a daily sell signal at 709.50.
Traders are advised to remain short, placing stops at 721.50.
Our objective is 640.00.
EURO-CURRENCY:
On 5/20/05, traders were advised to establish a short position in the Euro-currency based on a daily sell signal at 1.2610.
Traders are advised to remain short, placing stops at 1.2700.
Our objective is 118.25.
JAPANESE YEN:
On 5/06/05, traders were advised to establish a short position in the Japanese Yen based on a daily sell signal at .9582.
On 5/20/05, traders were advised to either add to their existing short position or establish a short position in the Japanese Yen based on a daily sell signal at .9305.
Traders are advised to remain short, placing stops at .9405.
If the Yen were to post a monthly close below .9233, traders are advised to either add to their existing short position or establish a short position, placing all stops above .9370.
Our objective on a monthly close below .9233 is .8839.
BRITISH POUND:
On 5/02/05, traders were advised to establish a short position in the British Pound based on a weekly sell signal at 1.8944.
On 5/05/05, traders were advised to either add to their existing short position or establish a short position in the British Pound based on a .618 retracement at 1.9036.
On 5/12/05, traders were advised to either add to their existing short position or establish a short position in the British Pound based on an intra-monthly sell signal at 1.8612.
Traders are advised to remain short, placing stops at 1.8485.
Our objective is 1.7821.
CRUDE OIL:
On 4/29/05, traders were advised to establish a short position in Crude oil based on an intra-monthly sell signal at 51.54.
On 5/12/05, traders were advised to either add to their existing short position or establish a short position in Crude oil based on an intra-weekly sell signal at 50.39.
Traders are advised to remain short, placing stops at 50.99.
Our objective is 41.90.
S&P 500:
On 5/18/05, traders were advised to establish a long position in the S&P based on a weekly buy signal at 1181.00.
Traders are advised to remain long, placing stops below 1172.00.
Our objective is 1213.80.
COTTON:
On 5/17/05, traders were advised to establish a short position in Cotton based on a weekly sell signal at 51.79.
Traders are advised to remain short, placing stops at 53.15.
Our objective is 46.01.
COFFEE:
On 5/16/05, traders were advised to establish a short position in Coffee based on a weekly sell signal at 119.70.
Traders are advised to remain short, placing stops above 120.75.
Our objective on a monthly close below 112.75 is 83.75.
Our objective on a monthly close above 135.00 is 157.25.
  
COPPER:
On 5/12/05, traders were advised to establish a short position in Copper based on an intra-weekly sell signal at 140.80.
Traders are advised to remain short, placing stops above 140.50.
Our objective is 128.50.
SUGAR:
On 5/18/05, traders were advised to establish a long position in Sugar based on a weekly buy signal at 8.51.
Traders are advised to remain long, placing stops at 8.21.
Our objective on a monthly close above 8.98 is 10.67.
SOYBEAN OIL:
On 5/13/05, traders were advised to establish a short position in Soybean Oil based on an intra-weekly sell signal at 22.35.
Traders are advised to remain short, placing stop and reverse orders at 23.36.
Our objective is 20.41.
SOYBEANS:
For next week Soybeans have a weekly recommendation: buy when trades 640.75 - sell when trades 611.75.
On 5/13/05, traders were advised to establish a short position in Soybeans based on an intra-weekly sell signal at 615.75.
Traders are advised to remain short, placing stop and reverse orders at 640.75.
Our objective on a monthly close below 610.50 is 517.00.
Our objective on a monthly close above 656.75 is 707.00.
WHEAT:
For next week Wheat has a daily and weekly recommendation:
For Monday Wheat has a daily recommendation: buy when trades 314.75 - sell when trades 309.75.
For next week Wheat has a weekly recommendation: buy when trades 318.25 - sell when trades 303.75.
Our objective if the weekly buy signal is posted is 338.75.
Our objective if the weekly sell signal is posted is 283.25.
 

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.'

- There is no Chart Watch this week.

CURRENT 'MONTHLY' RECOMMENDATIONS
FOR MAY:

- SILVER (SI5N)
- ORANGE JUICE (OJ5N)
- LIVE CATTLE (LC5M)
- BRITISH POUND (BP5M)

FUTURE WATCH

Future watch will list developing 'monthly' recommendations to watch in May for June. 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 May 31st and sent via email for June.
 
- EMINI S&P
- S&P 500
- DOW JONES
- SUGAR
- COFFEE
- SOYBEAN MEAL

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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* Recommendations and Newsletter prepared by Scott Joss, Non- Member C.T.A.

Scott Joss is a 'non member' CTA and is providing recommendations to ClearTrade, Inc. clients. Scott Joss 'is a principal' of ClearTrade, Inc. and 'is a registered IB member' with the NFA.

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DISCLAIMER:

* COMING EVENTS AND DATA RELEASES:

Calendar provided by Briefing.com, Inc. Data is provided for informational purposes only, and is not intended for trading purposes. Neither ClearTrade, Inc. nor any of its data or content providers (such as Reuters, CSI, and Briefing.com) shall be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Market recommendations are strictly the opinion of the writer and are intended solely for informative purposes and are not to be construed, under any circumstances, by implication or otherwise, as an offer to sell or a solicitation to buy or trade in any commodities or securities herein named. No guarantee of any kind is implied or possible where projections of future conditions are attempted. Futures trading involve substantial risk. In no event should the content of a market letter be construed as a promise that you will profit or that losses can or will be limited in any manner whatsoever.

Unless otherwise indicated, the links presented in this newsletter are in no way affiliated with ClearTrade, Inc. Likewise, sites linked through ClearTrade's newsletter are not necessarily connected with ClearTrade, nor do any such links imply an endorsement by either party.

ClearTrade, Inc. does not necessarily promote or endorse the services or publications described herein. Unless otherwise indicated, ClearTrade Inc. has had no role in the production or review of these products or services and makes no warranty, either expressed or implied, as to their contents, accuracy or performance.

Past results are no indication of future performance. Information provided in this newsletter is intended solely for informative purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.
Scott Joss is a 'non member' CTA and is providing recommendations to ClearTrade, Inc. clients. Scott Joss 'is a principal' of ClearTrade, Inc. and 'is a registered IB member' with the NFA.

NOTE: Past results are no indication of future performance. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.

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

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

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