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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Weekly Newsletter should be used in conjunction with the Daily Recommendations, Weekly Recommendations and Monthly Recommendations.

ClearTrade's Archived Newsletters 2005
 

• TECH TALK - SUGAR - S&P 500 - SOYBEANS - GOLD - YEN - COTTON - COCOA - HEATING OIL
•  CHART WATCH  - FEEDER CATTLE - COFFEE
•  CURRENT 'MONTHLY' RECOMMENDATION
•  FUTURES WATCH
•  COMING EVENTS AND DATA RELEASES

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

OCTOBER SUGAR (SB5V)
On 8/08/05, October Sugar posted a daily sell signal at 10.06 and began its price pullback from highs of 10.35. This was not a surprising development as price pullbacks in a bull market are deemed healthy. 
The question I posed last week and - again this week - is how much of a pullback is necessary to weed out the weak longs and work off excess buying that has occurred over the last thirteen-weeks?
October Sugar, unlike the back months, had formed a bearish ‘head and shoulders’ top.
The left shoulder developed between lows of 9.76 and highs of 9.99.
The head was established between lows of 9.86 and highs of 10.35.
The development of the right shoulder developed between lows of 9.73 and highs of 9.92.
The all-important ‘neckline’ was not well defined last week but was defined on Monday.
The ‘neckline’ breakdown was at 9.72.
The all-important ‘shoulder line’ is at 9.90.
The potential projection from the current ‘head and shoulders’ top is 9.07.
The ‘Commitment of Traders’ report - published each Friday - indicated that the change in open interest decreased by 16,693 contracts, posting a total open interest of 472,883 contracts. 
Why is open interest decreasing?
Simple…too many longs.
For the last two weeks the feature on the Sugar board has been the commercial dealers rolling out of their long October contracts and buying March contracts. This rolling from October to March is done either by a ‘pure spread’ basis or by ‘legging’ the spread. If you notice, the October Sugar developed a bearish ‘head and shoulders’ top - however, the March contract has a downward flag formation. Within this downward flag, prices are pushing lower in a stepladder.  
Last week, I expressed my long-term view that it’s quite possible that Non-Commercial Funds and many Commercial Dealers believe that Sugar is not just an agricultural product anymore but an energy source, which maybe be influenced by Crude Oil.
As energy prices move higher, many believe the alternative to alleviate this problem is the use of Sugar Ethanol.
Many believe Brazil, the world’s largest sugar grower, will divert more sugar to ethanol production -thereby leaving a gap between raw sugar supply and demand. 
My belief technically is that sugar prices will go much higher - not only in the short-term but in years to come - based on two very bullish ’W’ formations. These ’W’ formations have developed on the daily, weekly and monthly charts.  In addition, Sugar in 2004 posted an ‘intra-yearly’ buy signal at 8.85.
WHAT ARE THE TECHNICALS OF SUGAR?
Each week I stress to traders that the Sugar ‘trading module’ I have developed is a long-term trade that may span a year or more to achieve. Because of the possible length of the trade, traders have been advised to establish long positions in March 2006 futures and options.
The positions in the March contract are based originally on daily, weekly, and monthly trade signals from the July contract and now, October trade signals. Soon I will be able to write and base our trade signals on the March contract.
On 9/9/05, October Sugar options expire.
On 9/22/05, the all-important Sugar and Sweeteners Outlook Summary will be released.
On 9/30/05 is the last trading day for October Sugar futures.
October Sugar has been in a multi-year price advance which began from lows of 6.12 (2/13/04) to recent highs of 10.35 (8/04/05).
Recently, Sugar has traded from highs of 10.35 to lows of 9.60 (8/16/05).
Sugar closed Friday at 9.68, which is above its 100-day moving average of 9.09 and its 200-day moving average of 9.04.
Sugar attempted all last week to close below its 40-day moving average - which as of Friday was at 9.67.
The 50-day moving average is at 9.54.
Sugar has eight unfilled price gaps above the current market price. The first unfilled price gap above the current market price is between 11.72 and 11.80 (1/09/98).
Sugar has no unfilled price gaps below the current market price.
On 5/18/05, Sugar posted a weekly buy signal at 8.54.
On 6/17/05, Sugar posted an ‘intra-weekly’ buy signal at 9.04.
On 7/07/05, Sugar posted a major price breakout by posting a weekly close above past contract highs of 9.45 from 3/17/05.
On 7/13/05, Sugar posted a daily buy signal at 9.55.
On 7/15/05, Sugar posted its second weekly close above the major price breakout of 9.45 from 3/17/05.
On 7/21/05, Sugar posted an ‘intra-day’ buy signal at 9.55.
On 7/22/05, Sugar posted an ‘intra-week’ buy signal at 9.60.
On 7/22/05, Sugar posted its third weekly close above the major price breakout of 9.45 from 3/17/05.
On 7/25/05, Sugar posted a daily buy signal at 9.74.
On 7/29/05, Sugar posted its fourth weekly close above the major price breakout of 9.45 from 3/17/05.
On 8/01/05, Sugar posted an ‘intra-day’ buy signal at 10.00.
On 8/02/05, Sugar posted an ‘intra-week’ buy signal at 10.00.
On 8/08/05, Sugar posted a daily sell signal at 10.06.
On 8/15/05, Sugar posted a weekly sell signal at 9.76.
Last week's high was 9.92.
Last week's low was 9.60.
Last month's high was 9.99.
Last month's low was 9.10.
WHAT WERE TRADERS ADVISED TO DO LAST WEEK?
Sugar had a daily recommendation for last Monday: buy when traded 9.91 - sell when traded 9.81.
Sugar had a weekly recommendation for last week: buy when traded 10.20 - sell when traded 9.76.
Aggressive traders who either added to their existing long position or established long positions for the last several weeks below 9.45 were advised to move their stops below 9.60.
Options traders who purchased either March 1100 calls or March 1200 calls were advised to continue risking 100% of purchase price.
Aggressive traders who either added to their existing long position or established long positions on a higher weekly and monthly high of 10.00 were advised to place stops for this position only at 9.70. (This position should have been liquidated).
Aggressive traders who either added to their existing long position or established long positions on a price pullback to support at 9.75 were advised to place stops for this position only below 9.60.
If Sugar first posted a daily buy signal at 9.91, aggressive traders were advised to either add to their existing long position or establish a long position, placing stops for this position only at 9.76. (This position should have been liquidated).
Our short-term upside objective was 10.66.
On the flipside….
If Sugar first posted a daily sell signal at 9.81, traders were not advised to establish a short position.
If Sugar posted a weekly sell signal at 9.76, traders were to prepare for an assault on the unfilled price gap between 9.73 and 9.77.
WHAT SHOULD TRADERS DO NEXT WEEK?
Aggressive traders who either added to their existing long position or established long positions for the last several weeks below 9.45 are advised to leave their stops below 9.60.
Options traders who purchased either March 1100 calls or March 1200 calls are advised to continue risking 100% of purchase price. (The options purchased were designed for the long-term trader). 
Aggressive traders who either added to their existing long position or established long positions on a price pullback to support at 9.75 are advised to leave their stops below 9.60.
If Sugar first posts a higher high than last week’s high of 9.92, traders are advised to move all stops to 9.59.
If Sugar posts a close above 10.04, traders are advised to either add to their existing long position or establish a long position, placing all stops at 9.59.
If Sugar posts multiple closes above 10.35, traders are advised to either add to their existing long position or establish a long position, placing all stops below 9.73.
If Sugar first posts a lower low than last week’s low of 9.60 yet reverses, traders are to place resting buy stop orders at 9.93 to either add to their existing long position or establish a long position, placing all stops at 9.59.
On the flipside…
If Sugar first posts a lower low than last week’s low of 9.60, traders are to prepare for an assault on the 50-day moving average of 9.54.
If Sugar posts a close below 9.54, traders are to prepare for an all out assault on the contract high breakout at 9.45 (long futures traders will have been liquidated).
If long futures traders are stopped out of the market, they are advised to sit and wait for the next progression of buy signals before re-entering the Sugar market.
Normally, I would suggest the short or long side of any market when it reverses and posts signals.  However, I am reluctant to establish any short positions in Sugar because of the bullish ‘W’ formations on the daily, weekly and monthly charts.
If Sugar posts a close below 9.45, traders are to prepare for an assault on the original breakout at 9.30.
If Sugar were to post a weekly close below the original breakout at 9.30, traders are to prepare for an assault of the monthly sell signal at 9.10 and possibly the 100-day and 200-day moving average at 9.06 and 9.02, respectively.
If Sugar were to post a monthly close at or below 9.10, traders are still advised to sit on the sidelines and wait for another trading opportunity.
Each week I will continue to post Sugar’s past unfilled price gaps above the current market price so we can reference them quickly if the need presents itself.
1) Price gap between 11.72 and 11.80 (1/09/98).
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).
For several weeks, I’ve described some Sugar option facts and will continue to provide updated information:
Last week Sugar options for a two-year ‘implied volatility’ average were ranked number 21 out of 45 - this week 31 out of 45 .
31) Sugar (SB) High 42.12% - Low 18.90% - Current 21.26%
Last week Sugar options for a one-year ‘implied volatility’ average were ranked number 10out of 45 - this week 28 out of 45
28) Sugar (SB) High 33.54% - Low 18.90% - Current 21.26%
Sugar options for a six-month ‘implied volatility’ average were ranked number 7 out of 45 - this week 24 out of 45 .
24) Sugar (SB) High 27.18% - Low 18.90% - 21.26%
Options are getting cheap again.
DAILY CHART:
http://bohl.minot.com/d_Chart.cgi?SB05V
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WEEKLY CHART:
http://bohl.minot.com/w_Chart.cgi?SB
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S&P 500 (SP5U)
For several weeks I’ve written in my newsletter that I am not convinced that the S&P was in the right hands. Many indicators are showing divergences that are inconsistent with the new highs that were posted three weeks ago at 1248.00 and two week‘s ago at 1248.40.
Last week, several traders called asking me to elaborate on my observation that ‘the S&P was not in the right hands.’
When I was on the floor at the CBOT, Smith Barney used to call to inquire about the technical graph of the 30-year bond.
Bonds in the 1980’s were traded very differently than today’s 10-year note and 30-year Bond.
The swings were very dramatic.
The Bond point and figure charts at that particular moment in time indicated the 30-year Bond should move higher in price.
Therefore, my first response was that Bonds were going higher and had not yet met their objective.
Several of the head traders from New York paused and again asked the same question ….only with a different twist.
How do the Bonds feel?
I set the phone down and just observed.
Traders hands, face in, were buying at a frenzied pace.
The noise level was like a symphony, growing with every price movement upward. Then came the crescendo and I realized the upward momentum was ending.
I immediately picked up the phone and said ‘this is the top.’
Prices were moving up but Bonds were in the wrong hands. The small speculator, which included the pit traders, were all long. The commercial hedger, such as Smith Barney, had stopped buying long before this point.
Bond prices were being held up by traders that did not have any real purpose to be long… other than greed; they were speculators not hedgers. Hedgers (Commercials) have a purpose to buy or sell because they are always trying to neutralize their portfolio and risk.   
So the term ‘not in the right hands’ means the small speculator has tried to take control of a product without the help of the Commercial hedger.
In this case, it is my belief that the S&P is not in safe hands. The indicators are warning me that the hedgers are taking profits and/or neutralizing their positions. 
Traders need to continue to remain cautious and on high alert for a possible price failure in case a ‘spread double top’ has been posted.
The September S&P has been in a four-week price advance that began from lows of 1186.50 (7/07/05) to highs of 1248.40 (8/03/05).
Currently, the S&P has been in a downward price decline that began from highs of 1248.40 to recent lows of 1217.40.
The S&P has three unfilled price gaps above the current market price. The most recent unfilled price gap is between 1249.30 and 1250.80.
The S&P has four unfilled price gaps below the current market price. The most recent gap is between 1180.50 and 1184.50.
On 7/07/05, the S&P posted an ‘intra-week’ buy signal at 1208.60.
On 7/12/05, the S&P posted an ‘intra-month’ buy signal at 1225.20.
On 7/20/05, the S&P posted an ’intra-day’ buy signal at 1233.90.
On 7/25/05, the S&P posted a ‘daily’ buy signal at 1238.10.
On 7/27/05, the S&P posted a ‘daily’ buy signal at 1237.60.
On 8/05/05, the S&P posted a ‘weekly’ sell signal at 1230.80.
On 8/12/05, the S&P posted a daily sell signal at 1229.90.
 
Last week’s high was 1238.50.
Last week’s low was 1217.40.
Last month’s high was 1248.00.
Last month’s low was 1186.50.
WHAT DO THE CHARTS LOOK LIKE?
Major support for the S&P is at the recently posted ‘intra-week’ buy signal at 1208.60.
Minor resistance for the S&P is at the recently posted ‘intra-month’ buy signal of 1225.20, which Friday the S&P closed below.
A weekly close above 1248.40 is needed for a continuation of higher prices and a weekly close below 1225.20 is needed for further price erosion.
Last week the S&P posted its first weekly close below 1225.20 by closing at 1223.80.
As I previously mentioned, many technical indicators have divergences with the highs posted at 1248.40 and 1248.00. This continues to disturb me.
On 8/05/05, the S&P posted a weekly sell signal at 1230.80.
Adding some significance to this weekly sell signal at 1230.80 is the fact that it was posted after establishing new contract highs at 1248.40.
This could be a precursor to a trend change and a price failure in the weeks and months ahead.
One indicator that stood out was the VIX index.
During periods of market turmoil, the VIX spikes higher, largely reflecting the panic demand for OEX puts as a hedge against further declines in stock portfolios. During bullish periods, there is less fear and therefore less need for portfolio managers to purchase puts.
The VIX has been in an approx. two-year downturn, beginning from highs of 23.26 (9/30/03) to recent lows of 9.88 (7/20/05).
Currently, the VIX has moved from lows of 9.88 to highs of 13.89 (8/16/05), which has not been visited since 5/19/05.
WHAT WERE TRADERS ADVISED TO DO LAST WEEK?
Aggressive traders who established a short position at the weekly sell signal of 1230.80 were advised to leave stops at 1248.50.
Conservative traders who established a short position in the Emini S&P at the weekly sell signal of 1231.00 were advised to leave stops at 1248.50.
If the S&P posted a close below 1224.30, traders were to prepare for a possible price failure.
WHAT ARE TRADERS ADVISED TO DO NEXT WEEK?
Aggressive traders who established a short position at the weekly sell signal of 1230.80 are advised to leave stops at 1248.50 for now.
Conservative traders who established a short position in the Emini S&P at the weekly sell signal of 1231.00 were advised to leave stops at 1248.50 for now.
If the S&P first posts a lower low than last week’s low of 1217.40, traders are advised to move their stops to 1238.60.
If the S&P posts multiple closes below 1216.70, aggressive traders are advised to either add to their existing short position or establish a short position, placing stops for this position only above 1230.80.
Conservative traders are advised to use the Emini S&P as their trading vehicle.
If the S&P posts a close below 1208.50, traders are advised to either add to their existing short position or establish a short position and prepare for an all out attack on the 1200.70 support level.
If this were to occur, traders are advised to move all stops above 1224.30.
Conservative traders are advised to use the Emini S&P as their trading vehicle.
If the S&P were to post a monthly close below 1186.50, traders are advised to either add to their existing short position or establish a short position, placing all stops above 1216.70.
Our objective will be the unfilled price gap below the current market price between 1180.50 and 1184.50.
On the flipside…
If the S&P were to first post a lower low than last week’s low of 1217.40 yet reverse and post a higher high than last week’s high of 1238.50, traders are to prepare for an assault on the monthly highs and contract highs of 1248.40.
If this were to occur, traders are advised to sit on the sidelines and wait for another trading opportunity.
DAILY CHART:
http://bohl.minot.com/d_Chart.cgi?SP05U
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WEEKLY CHART:
http://bohl.minot.com/w_Chart.cgi?SP
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NOVEMBER SOYBEANS (S5X)
Several weeks ago I began developing a ‘trading module’ for November Soybeans.
November Soybeans had been in an eighteen-week price advance from lows of 519.50 (2/09/05) to highs of 770.00 (6/22/05).
Soybeans had been in a volatile trading range between 751.00 highs and 666.00 lows.
Note: This product is extremely volatile and should only be traded by aggressive traders. This is not for the inexperienced trader or the faint of heart.
Clients were cautioned that they must have an equity to risk ratio of no more than 10% to trade this product.
At the conception of this ‘trading module,’ that meant if the risk in Beans was $4,275 - you must have an account size of $42,000 per contract.
If you did not fit this profile, I suggested that traders consult their account executive and consider an options strategy.
Traders that either exited this trade because it met their personal objective or did not enter the trade at the weekly and monthly sell signals are to note the additional risk associated with re-entering or establishing a short position.
The risk to enter the trade at this level is now $7,175 from Friday’s close at 607.50.
How did I calculate that risk?
The monthly buy signal is at 751.00 and Beans settled Friday at 607.50... So do the math.
Does that mean traders shouldn’t establish a short position or add to their short positions?
No, but traders need to be cautioned that they must have an equity to risk ratio of no more than 9% to trade this product.
 
Therefore, what began as a $4,275 risk and a $39,000 account size per contract is now a $7,175 risk and a $69,000 account size per contract to either add or establish a short position. However, if aggressive traders insist on entering on the short side at these levels, place your stops above 666.00. By doing this, traders can now risk $2,925 and have an account size of $30,000.
Soybeans confirmed a breakout on the downside by closing below 660.50.
Soybean’s 100-day moving average is at 662.25 and 200-day moving average is at 615.75.
Soybeans have two unfilled price gaps below the current market price. The most recent gap is between 547.00 and 551.50.
Soybeans have two unfilled price gaps above the current market price. The first gap is between 664.00 and 644.25. The second gap is between 662.50 and 669.50.
Soybeans had - and still have a monthly recommendation for August: buy when trades 751.25 - sell when trades 665.75.
The monthly recommendation will not be confirmed until the close of business August 31st.
On 8/05/05, Beans posted a weekly sell signal at 669.75.
On 8/05/05, Beans posted an unconfirmed monthly sell signal at 665.75.
On 8/12/05, Beans posted an ‘intra-day’ sell signal at 649.00.
On 8/19/05, Beans posted a daily sell signal at 619.25.
 
Last week’s high was 640.00.
Last week’s low was 604.25.
Last month’s high was 751.00.
Last month’s low was 666.00.
WHAT WERE TRADERS ADVISED TO DO LAST WEEK?
Aggressive traders who established a short position at the weekly sell signal of 669.75 were advised to leave their stops above 711.25.
Aggressive traders who either added to their existing short position or established a short position at the unconfirmed monthly sell signal of 665.75 were advised to leave their stops for this position only above 687.50.
Aggressive traders who either added to their existing short position or established a short position at the second posting of the unconfirmed monthly sell signal of 665.75 were advised to leave their stops for this position only above 680.00.
Conservative traders who purchased November 620 puts were advised to continue risking 70% of purchase value.
If Beans first posted a lower low than last week’s low of 642.00, aggressive traders were advised to either add to their existing short position or establish a short position, placing for this position at 680.25.
If Soybeans posted a weekly close below 634.75, aggressive traders were advised to either add to their existing short position or establish a short position, placing all stops above 666.00.
Our next objective was the unfilled price gap between 618.00 and 621.00. (This objective was met on 8/15/05).
Our long-term objective is still 581.00
WHAT ARE TRADERS ADVISED TO DO NEXT WEEK?
Aggressive traders who established a short position at the weekly sell signal of 669.75 are advised to move their stops above 666.00.
Aggressive traders who either added to their existing short position or established a short position at the unconfirmed monthly sell signal of 665.75 are advised to move their stops above 666.00.
Aggressive traders who either added to their existing short position or established a short position at the second posting of the unconfirmed monthly sell signal of 665.75 are advised to move their stops above 666.00.
Conservative traders who purchased November 620 puts are advised to risk 30% of current market value.
If Beans first post a lower low than last week’s low of 604.25, aggressive traders are advised to either add to their existing short position or establish a short position, placing stops for this position only at 655.50.
If Beans first post a higher high than last week’s high of 640.00, traders are advised to either add to their existing short position or establish a short position, placing stops above 666.00.
If Beans first post a higher high than last week’s high of 640.00 yet reverse, traders are to place resting sell stop orders at 604.00 to either add to their existing short position or establish a short position, placing stops for this position at 640.25.
Our next objective will be 581.00.
If Soybeans were to close on a monthly basis at or below 581.00, traders are to prepare for an all out assault on the unfilled price gap between 547.00 and 551.50.
On the flipside…
If Beans were to post a close above 670.00, aggressive traders are to sit on the sidelines and wait for another trading opportunity.
DAILY CHART:
http://bohl.minot.com/d_Chart.cgi?SP05U
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WEEKLY CHART:
http://bohl.minot.com/w_Chart.cgi?SP
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DECEMBER COTTON (CT5Z)
Last week I brought Cotton to the attention of traders.
It appeared December Cotton had posted the opposite of the Yen formation.
Cotton had and still has a bearish ‘double reversal’ formation to go lower.
Cotton has been in an eight-week price decline that began from highs of 57.20 (7/05/05) to recent lows of 47.76 (8/19/05).
Cotton has recently posted lows of 47.80 on 8/15/05 and 47.76 on Friday.
Will Cotton try to use these lows as a stopping point and post a mini ‘spread double’ bottom?
On 8/04/05, Cotton posted a daily sell signal at 52.19.
On 8/10/05, Cotton posted a close below the ‘M’ or middle of the ‘double reversal’ at 51.09.
Cotton’s 100-day moving average is at 53.57.
Cotton’s 200-day moving average is at 52.14.
Last week’s high was 49.25.
Last week’s low was 47.76.
Last month’s high was 57.20.
Last month’s low was 49.36.
WHAT WERE TRADERS ADVISED TO DO LAST WEEK?
Aggressive traders that established a short position at the daily sell signal 52.19 were advised to move stops above 49.90.
Aggressive trader’s that established a short position at 51.09 or lower were advised to move stops above 49.70.
Our first objective was met at 48.90.
WHAT ARE TRADERS ADVISED TO DO NEXT WEEK?
Aggressive traders that established a short position at the daily sell signal 52.19 are advised to leave stops above 49.90.
Aggressive traders that established a short position at 51.09 or lower are advised to leave stops above 49.70.
If Cotton first posts a higher high than last week’s high of 49.25 yet reverses, traders are advised to place resting sell stop orders at 47.75.
If this were to occur, traders are advised to place stops for this position only at 49.26.
If Cotton first posts a lower low than last week’s low of 47.76, traders are advised to either add to their existing short position or establish a short position, placing stops at 49.40.
Our next downside objective will be 46.27.
On the flipside…
If Cotton first posts a lower low than last week’s low yet reverses, traders are to move all existing stops above 49.40.
If Cotton posts a close above 49.36 by the close of business August 31st, traders are to wait for another trading opportunity.
DAILY CHART:
http://www.bohl.minot.com/d_Chart.cgi?CT05Z
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WEEKLY CHART:
http://www.bohl.minot.com/w_Chart.cgi?CT
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DECEMBER COCOA (CC5Z)
On 8/11/05, December Cocoa posted a potential ‘intra-monthly’ sell signal at 1377, which will not be confirmed until the close of business on August 31st.
If Cocoa posts a monthly close at or below 1377 by August 31st, this will constitute a major trend reversal.
WHY A TREND REVERSAL?
Cocoa posted higher highs in August at 1537 than July’s high of 1515 - and then Cocoa posted lower lows in August at 1370 than July’s low of 1413. If Cocoa posts a close at or below 1413 by the close of trading August 31st, that would constitute an ‘intra-monthly’ sell signal and a trend change.
In addition, Cocoa has the potential to post an ‘intra-yearly’ sell signal at 1297, which were last year’s low.
If Cocoa posts a close below 1296, traders may see a dramatic collapse.
Our objective would be 858.
Note: Clients must have an equity to risk ratio of no more than 10% to trade this product.
That means the risk trading the ‘intra-monthly’ sell signal (from 1413) in Cocoa is $1,020; you must have an account size of $10,000 per contract.
If you do not fit this profile, I suggested that traders consult their account executive and consider an options strategy.
On 8/11/05, Cocoa posted an unconfirmed ‘intra-monthly’ sell signal at 1413, which will not be revealed until the close of business August 31st.
Cocoa’s 100-day moving average is at 1509.
Cocoa’s 200-day moving average is at 1576.
Last week’s high was 1410.
Last week’s low was 1370.
Last month’s high was 1515.
Last month’s low was 1413.
WHAT WERE TRADERS ADVISED TO DO LAST WEEK?
Aggressive traders were advised to establish a short position against the 1413 ‘intra-monthly’ sell signal, placing stops at 1516.
Conservative traders were advised to purchase March 130 puts, risking 100% of purchase price.
WHAT ARE TRADERS ADVISED TO DO NEXT WEEK?
Aggressive traders who established a short position against the 1413 ‘intra-monthly’ sell signal are advised to leave stops at 1516.
Conservative traders who purchased March 130 puts are advised to continue risking 100% of purchase price.
If Cocoa first posts a higher high than last week’s high of 1410, traders are advised to wait and sell against the 1450 resistance.
If this should occur, traders are advised to place stops at 1516.
If Cocoa first posts a higher high than last week’s high at 1410 yet reverses, traders are advised to place resting sell stops at 1369.
If this were to occur, traders are advised to place stops for this trade only above 1465.
If Cocoa posts a close below 1298, traders are advised to either add to their existing short position or establish a short position, placing all stops above 1413.
Conservative traders are advised to purchase March 120 puts, risking 100% of purchase price.
On the flipside….
If Cocoa were to post a monthly close above 1515, traders are advised to establish a long position, placing stops below 1413.
DAILY CHART:
http://www.bohl.minot.com/d_Chart.cgi?CC05Z
------------
WEEKLY CHART:
http://www.bohl.minot.com/w_Chart.cgi?CC
----------------------------------------------------
OCTOBER HEATING OIL (HO5V)
October Heating Oil has been in a three-month price advance that began from lows of 1.3950 (5/16/05) to recent highs of 1.9600 (8/12/05).
Currently, Heating Oil has traded from highs of 1.9600 to lows of 1.7930 (8/18/05).
Heating Oil has no unfilled price gaps above the current market price.
Heating Oil has several unfilled price gaps below the current market price. The first unfilled gap is between 1.8380 and 1.8440. The second unfilled price gap is between 1.7750 and 1.7900.
On 7/25/05, Heating Oil posted a daily buy signal at 1.6605.
On 8/05/05, Heating Oil posted a daily buy signal at 1.7595.
For next week, Heating Oil has a weekly recommendation: buy when trades 1.9395 - sell when trades 1.7925.
Note: Heating Oil is a volatile product and is for aggressive traders only - not for the faint of heart.
Clients must have an equity to risk ratio of no more than 10% to trade this product.
That means the risk trading the ‘weekly’ recommendation in Heating Oil is $6,174; you must have an account size of $61,000 per contract.
If you do not fit this profile, I suggest that traders consult their account executive and consider an options strategy.
Last month’s high was 1.8316.
Last month’s low was 1.6250.
WHAT DO THE CHARTS LOOK LIKE?
Heating Oil has a well-defined upward parallel channel.
The bottom of the channel began from lows of 1.3990 through lows of 1.6250 and if touched today would intersect at 1.7330.
Some indicators are posting a divergence from highs set on 7/06/05 at 1.8316 and highs posted on 8/12/05 at 1.9600.
This could be disturbing.
Heating Oil must maintain a foothold above 1.7980 to continue its upward momentum.
WHAT SHOULD TRADERS DO NEXT WEEK?
Next week Heating Oil has a weekly recommendation: buy when trades 1.9395 - sell when trades 1.7925.
If Heating Oil first pulls back in price to support at 1.7980, aggressive traders are advised to establish a long position, placing resting stop and reverse sell orders at 1.7925.
If this stop and reverse order were to be filled, traders would in effect be short and are advised to place a stop and reverse resting order at 1.9395.
If Heating Oil first were to trade in price to resistance at 1.9300, aggressive traders are advised to establish a short position, placing resting stop and reverse buy orders at 1.9395.
If this stop and reverse order were to be filled, traders would in effect be long and are advised to place a stop and reverse resting order at 1.7925.
If Heating Oil posts its weekly buy signal at 1.9395, our upside objective will be 2.0865.
If Heating Oil posts its weekly sell signal at 1.7925, our downside objective will be 1.6455.
DAILY CHART:
http://www.bohl.minot.com/d_Chart.cgi?HO05V
------------
WEEKLY CHART:
http://www.bohl.minot.com/w_Chart.cgi?HO
----------------------------------------------------
SEPTEMBER JAPANESE YEN (JY5U)
Last week I begin developing a ‘trading module’ for the Yen.
The Yen had been in a ten-week down trend from highs of .9710 to lows of .8844.
Recently, the Yen has traded from lows of .8844 to highs of .9181.
The Yen for six-weeks had been in a wide trading range waiting for the Chinese to re-value their currency, the Yuan.
This new re-weighting of their currency, which occurred on 7/21/05, appears to be 30-40% US Dollar; 20-25% Euro-Currency; 20% Yen; 10% South Korea.
On 7/20/05, the Yen posted lows of .8844.
On 7/22/05, the Yen posted highs of .9152.
On 8/10/05, the Yen posted a daily buy signal at .8992.
The Yen has two unfilled price gaps above the current market price. The most recent is between .9523 and .9560.
The Yen has no unfilled price gaps below the current market price.
The Yen appeared to have made a bullish ‘double reversal’ from lows of .8923.
The formation almost looks like a ’W’ formation.
The left side of the reversal was developed between highs of .9158 and lows of .8844.
The middle of the reversal was established from lows of .8844 and highs of .9152.
The right side of the reversal was developed between lows of .8844 and highs of .9160.
The all-important breakout was at .9152.
The projection from this formation is .9460. 
The Yen’s 100-day moving average is at .9275.
The Yen’s 200-day moving average is at .9521.
Last week’s high was .9201.
Last week’s low was .9048.
Last month’s high was .9152.
Last month’s low was .8884.
WHAT WERE TRADERS ADVISED TO DO LAST WEEK?
Aggressive traders who established a long position at the daily buy signal of .8992 were advised to move their stops to .8992.
Aggressive traders who either added to their existing long position or established a long position on a close above .9152 were advised to leave their stops below .9068 (this position should have been liquidated in night trading on 8/18/05).
If the Yen first pulled back to support at .9152, aggressive traders were advised to either add to their existing long position or establish a long position, placing stops for this position below .9068 (this position should have been liquidated in night trading on 8/18/05).
If the Yen first posted a higher high than the previous week’s high of .9181, aggressive traders were advised to either add to their existing long position or establish a long position, placing stops for this position only below .9115 (this position should have been liquidated on 8/17/05).
WHAT SHOULD TRADERS DO NEXT WEEK?
Aggressive traders who established a long position at the daily buy signal of .8992 are advised to move their stops below .9023.
If the Yen first posts a lower low than last week’s low of .9048 yet reverses, traders are advised to place resting buy stop orders at .9202
If the Yen posts a close above .9236, aggressive traders are advised to either add to their existing long position or establish a long position, placing stops for all positions below .9152.
If the Yen posts a close above .9312, aggressive traders are advised to either add to their existing long position or establish a long position, placing stops for all positions below .9236.
Our first projection is .9460. 
On the flipside…
If the Yen first posts a higher weekly high than last week’s high of .9201 yet reverses and posts a close below .9048, aggressive traders should prepare for a price failure.
If the Yen posts a weekly close below .8915, aggressive traders are advised to establish a short position, placing stops above .9152.
If the Yen posts a monthly close at or below .8844, aggressive traders are advised to either add to their existing short position or establish a short position, placing stops for all positions above .8915.
If this were to occur, our downside objective would be .8436.
DAILY CHART:
http://www.bohl.minot.com/d_Chart.cgi?JY05U
------------
WEEKLY CHART:
http://www.bohl.minot.com/w_Chart.cgi?JY
----------------------------------------------------
DECEMBER GOLD (GC5Z)
In my July 31st newsletter I began developing several ‘trading modules’ because Gold had developed a monthly recommendation for August.
The monthly recommendation for August was: buy when trades 444.10 - sell when trades 424.10.
I had hoped for a ‘coil month’ in August so that September would post a monthly recommendation … but that hope ended on 8/04/05 when Gold posted its monthly buy signal at 444.10.
December Gold had two unfilled price gaps above the current market price. The most recent between 452.80 and 453.50 was partially filled two weeks ago when gold posted highs of 453.40. Gold has a second unfilled price gap above the current market price between 459.00 and 465.00.
Gold has two unfilled price gaps below the current market price. The first unfilled gap is between 440.00 and 440.90. The second is between 442.60 and 443.80.
On 7/25/05, Gold posted a weekly buy signal at 432.10.
On 7/27/05, Gold posted an ‘intra-day’ buy signal at 430.50.
On 7/28/05, Gold posted a buy signal at 431.60, which was the ‘neckline’ breakout of a ‘head and shoulders’ bottom.
On 8/04/05, Gold posted a monthly buy signal at 444.10.
Next week Gold has a weekly recommendation: buy when trades 451.90 - sell when trades 440.90.
Gold’s 100-day moving average is at 436.30.
Gold’s 200-day moving average is at 441.10.
Last month’s high was 444.00.
Last month’s low was 424.20.
WHAT DO THE CHARTS LOOK LIKE?
The daily December Gold chart had formed a bullish ‘head and shoulders’ bottom.
The ‘left’ shoulder was established between 428.00 lows and 434.00 highs.
The ‘head’ developed between 431.00 highs and 424.20 lows.
The ‘right’ shoulder developed between 430.00 highs and 427.70 lows.
The all-important ‘neckline’ was at 431.60.
The projection from this mini ‘head and shoulders’ bottom, was 441.80.
The December daily Gold chart had a well-defined downward trendline that began from highs of 471.00 through highs of 450.00. The all-important breakout occurred at 445.30 and today this breakout intersects at 444.30.
The December weekly continuation Gold chart developed a pennant formation by posting higher lows and lower highs.
The downward trendline of the weekly pennant began from highs of 456.00 through highs of 442.50 and 439.00.
The upward trendline of the pennant began from contract lows of 255.00 through lows of 413.20 and 418.20.
Gold had been trading in a six-month range between 415.50 lows and 442.50 highs.
Friday, Gold posted a close at 442.20.
WHAT WERE TRADERS ADVISED TO DO LAST WEEK?
Aggressive traders who established a long position at the daily buy signal at 431.90 were advised to move stops below 444.10 (this position should have been liquidated on 8/17/05).
Aggressive traders who established a long position at the ‘intra-day’ daily buy signal at 430.50 were advised to move stops below 444.10 (this position should have been liquidated on 8/17/05).
Aggressive traders who established a long position at the weekly buy signal at 432.10 were advised to move stops below 444.10 (this position should have been liquidated on 8/17/05).
Aggressive traders who established a long position on a close above 434.00 were advised to move stops below 444.10. (This position should have been liquidated on 8/17/05).
Aggressive traders who established a long position on the monthly buy signal of 444.10 were advised to move stops below 444.10 (this position should have been liquidated on 8/17/05).
Conservative traders who purchased either December 450 calls or 460 calls were advised to risk 50% of purchase price.
If Gold first pulled back to support at 447.50, aggressive traders were advised to either add to their existing long position or establish a long position, placing stops below 444.10 (this position should have been liquidated on 8/17/05).
WHAT ARE TRADERS ADVISED TO DO NEXT WEEK?
This next week may be confusing for traders if the weekly sell signal is posted.
WHY CONFUSING?
Because Gold posted a monthly buy signal at 444.10 on 8/04/05 and if a weekly sell signal is posted next week at 440.90, we will have conflicting data.
Just like in Bridge, a monthly recommendation trumps a weekly or daily recommendation.
I will have to recommend to traders that they sit this one out until we see how Gold closes on August 31st.
If Gold posts a close at or above 444.10 on the last business day of the month, I will advise traders via email.
DAILY CHART:
http://www.bohl.minot.com/d_Chart.cgi?GO05Z
------------
WEEKLY CHART:
http://www.bohl.minot.com/w_Chart.cgi?GO

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.'

OCTOBER FEEDER CATTLE (FC5V)
Clients know that 99% of the time I will not trade the meats or write about meat products because of low volume and their weak technical relationship.
However, this week Feeder Cattle will be placed on ‘Chart Watch’ because of a weekly recommendation for next week and a potential monthly recommendation developing for September.
October Feeder Cattle has been in a three-month price decline that appears to be moving in a stepladder that began from highs of 111.300 (5/17/05) to recent lows of 102.950 (7/15/05).
The price decline has moved in three separate segments.
The first segment began from lows of 108.200 to highs of 111.050.
The second segment began from lows of 104.800 to highs of 109.800.
The most recent and third segment began from lows of 102.950 to highs of 108.800.
Feeder Cattle has no unfilled price gaps above the current market price.
Feeder Cattle has several unfilled price gaps below the current market price. The first unfilled gap is between 107.150 and 107.500. The second unfilled price gap is between 100.000 and 100.500.
Feeders have a weekly recommendation for next week: buy when trades 108.270 - sell when trades 105.670.
Feeders are developing a potential monthly recommendation for September that will not be revealed until the close of business August 31st.
WHAT SHOULD TRADERS DO NEXT WEEK?
Sit on the sidelines and wait for a potential trading opportunity.
Note: Feeder Cattle is a volatile product and is for aggressive traders only.
Clients must have an equity to risk ratio of no more than 9% to trade this product.
That means the risk trading the potential ‘monthly’ recommendation in Feeder Cattle suggests it will be $3,425; you must have an account size of $32,000 per contract.
Because of the lack of volume in Feeder Cattle options, I cannot suggest an option trading strategy.
DAILY CHART:
http://www.bohl.minot.com/d_Chart.cgi?FC05V
------------
WEEKLY CHART:
http://www.bohl.minot.com/w_Chart.cgi?FC
----------------------------------------------------
DECEMBER COFFEE (KC5Z)
Two weeks ago I began developing a ‘trading module’ for December Coffee because of a pending weekly recommendation and a potential monthly recommendation for September.
Coffee was to remain on ‘Chart Watch’ until the last trading day of August because of this potential monthly recommendation for September. However, last week’s trading has damaged the monthly recommendation.
WHAT SHOULD TRADERS DO NEXT WEEK?
Traders are advised to sit on the sidelines and wait for another trading opportunity.
DAILY CHART:
http://www.bohl.minot.com/d_Chart.cgi?KC05Z
------------
WEEKLY CHART:
http://www.bohl.minot.com/w_Chart.cgi?KC

CURRENT 'MONTHLY' RECOMMENDATIONS
FOR AUGUST:

- U.S. 30-YEAR BOND (US5U)
- SOYBEANS (S5X)
- WHEAT (W5U)
- SOYBEAN MEAL (SM5Z)
- SOYBEAN OIL (BO5Z)
- GOLD (GC5Z)
- LEAN HOGS (LH5V)
- COFFEE (KC5Z)
 

FUTURE WATCH

Future watch will list developing 'monthly' recommendations to watch in August for September. 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 August 31 and sent via email for September.

- DOW JONES
- EMINI S&P
- FEEDER CATTLE

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 recieving this report from any other source than S.R. Joss Inc or ClearTrade Inc. please call us at 1-800- 493-4444.

NOTE:

If you do not completely understand this information, you are advised to take NO action until speaking with your Account Executive.

ClearTrade, Inc. may be reached at 800-493-4444

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

* 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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