WELCOME TO THE JOSS REPORT - WEEKLY TRADE ADVISOR

ClearTrade®
 Clearing Man Financial
The Joss Report trading recommendations and weekly trade advisor was first published in October 1998. Since that time, the Joss Report research has continued to evolve into an important source of technical insight for many traders. Our goal is to provide traders with a 'trading plan' to prepare for the trading day and week ahead.
ClearTrade's own technical analyst, Scott Joss*, is a veteran futures trader with twenty-eight years experience on and off the trading floor - as a technical analyst, pit trader, account executive handling arbitrage for Smith Barney, former member of the CBOT, non-member CTA and presently an IB. Scott prepares technical analysis in selected market groups when an opportunity presents itself and not only develops 'trading modules' on selected trading opportunities but 'feeds-forward', advising traders what to expect and how to react.
  At ClearTrade, we think it’s helpful to speak directly with traders who have requested The Joss Report research and may be interested in establishing an account with us. Understanding your trading needs and goals is important. And we think you should have an opportunity to get to know who we are and what we offer on a one to one basis.
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The Joss Report Archived Weekly Trade Advisor 2005

 

· TECH TALK - EURO - CRUDE - COTTON - DOW
· CHART WATCH - SILVER
· CURRENT 'MONTHLY' RECOMMENDATIONS 
· FUTURES WATCH
· COMING EVENTS AND DATA RELEASES

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

MARCH CRUDE OIL (CL6H)

Two weeks ago I began developing several 'trading modules' for March Crude Oil because of a monthly buy recommendation in February Crude Oil at 62.86.

Traders were advised to establish long positions in the March Crude Oil contract because of the approaching first notice day in the February contract. 

March Crude Oil had been in an eight-week price decline that began from highs of 70.70 (9/01/05) to lows of 57.50 (11/30/05).

Currently, March Crude Oil has been in a 27-day price advance from lows of 57.95 to highs posted Friday at 69.15.

The ‘Commitment of Traders’ report - published each Friday by the CFTC - indicated that the net change in open interest last week increased by 16,624, posting a total open interest of 909,573 contracts.  

WHAT DOES THE MARCH CRUDE OIL CHART LOOK LIKE?

March Crude Oil has been in a multi-year price advance which began from lows of 24.27 (9/02/03) to recent highs of 70.70 (9/01/05).

March Crude Oil began its current price advance from lows posted on 11/18/05 and 11/30/05 at 57.50 to recent highs of 69.15 (1/20/06).

March Crude Oil has posted a bullish spread 'double bottom' at 57.50.

Confirmation of the spread 'double bottom' was multiple closes above 63.45.

March Crude Oil also developed a bullish 'W' formation.

The left side of the 'W' formation developed between highs of 63.75 to lows of 57.50.

The middle of the 'W' formed between lows of 57.50 and highs of 63.45.

The right side of the 'W' formation began from lows of 57.95 and posted a close above the middle of the 'W' (63.45) on 1/03/06.

This bullish 'W' formation indicates that our objective would be 69.40.

March Crude Oil has no unfilled price gaps above the current market price.  

March Crude Oil has several unfilled price gaps below the current market price. The most recent unfilled price gap is between 64.75 and 65.75. The second unfilled price gap is between 62.00 and 62.50. The third unfilled price gap below the current market price is between 58.75 and 58.90.

For twenty-five days March Crude has closed above its 40-day moving average at 61.86 and for twenty-seven days has closed above its 50-day moving average - which as of Friday was at 61.47.

March Crude Oil closed Friday at 68.48, which is above its 100-day moving average of 63.19 and its 200-day moving average of 60.91.

Listed below are the original trade signals that March Crude Oil has recently posted:

On 11/18/05 and 11/30/05, March Crude posted a potential spread 'double bottom' at 57.50.

On 12/28/05, March Crude posted an 'intra-week' buy signal at 59.91.

On 1/03/06, March Crude posted a monthly buy signal at 63.46.

On 1/03/05, March Crude posted a close above the middle of the potential 'W' formation at 63.45.

On 1/20/06, March Crude posted a daily buy signal at 67.31.

Crude Oil, due to extreme volatility, is not for the inexperienced trader.

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

If you do not fit this risk profile, traders are advised to consult their account executive for an option trading strategy or are advised to use the Mini Crude Oil contract as their trading vehicle.

WHAT WERE TRADERS ADVISED TO DO TWO WEEKS AGO?

http://www.cleartrade.com/images/letter_1_08_06.htm

WHAT ARE TRADERS ADVISED TO DO NEXT WEEK?

Aggressive traders who established long positions at the 'intra-week' buy signal at 59.91 are advised to move their stops below 64.75*.

Aggressive traders who either added to their existing long positions or established a long position at the monthly buy signal of 63.46 are advised to move stops for this position below 64.75*.

Aggressive traders who either added to their existing long positions or established a long position at the daily buy signal of 67.31 or above are advised to move stops for this position below 67.30*.

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

# 1) If March Crude Oil first posts a higher high than last week's high of 69.15:

Aggressive traders are advised to either add to their established long position or establish a long position, placing stops for this position only below 67.30*.

Our first objective will be 69.40.

Our second objective will be an all out assault on contract highs of 70.70.

# 2) If March Crude Oil posts multiple closes above 70.70:

Aggressive traders are advised to either add to their established long position or establish a long position, placing stops for all positions below 69.15*.

Our long-term objective will be 83.90.

#3) If March Crude first posts a lower low than last week's low of 65.75:

Aggressive traders are advised to leave their stops in place as recommended above.

# 4) If March Crude fills the unfilled price gap below the current market price between 64.75 and 65.75:

Aggressive traders are advised to prepare for a possible price decline that may retest the middle of the ‘W’ formation at 63.45.

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

# 5) If March Crude first posts a higher high than last week's high of 69.15 yet reverses, posting a lower low than last week’s low of 65.75:

Aggressive futures traders are advised to leave their existing stop orders below 64.75.

In addition, aggressive futures traders are advised to place resting buy stop orders at 69.16.

If the resting buy stop order at 69.16 is activated, aggressive traders are advised to add to their existing long positions, establish a long position, or reestablish their long positions.

If March Crude posted 69.15, aggressive traders are advised to place stops for their established long positions below 67.30*.

# 6) If March Crude first posts a lower low than last week's low of 65.75 - not filling the gap at 64.75, yet reverses, posting a higher high than last week's high of 69.15:

Aggressive traders are advised to place resting buy stop orders at 69.16.

If the resting buy stop order at 69.16 is activated, aggressive traders will either add to their existing long position or establish a long position.

If March Crude posted 69.16, aggressive traders are advised to place all stops below 67.30*.

Below are possible ‘monthly reversal trading modules’ to consider:

# 7) If March Crude posts a monthly close at or below 57.95:

Aggressive traders will have liquidated their long positions and are advised to establish a short position, placing stops above 60.46*.

Our first objective will be an all out assault on contract lows at 57.50.

I have compiled some Crude Oil option facts for traders:

Crude options for a two-year ‘implied volatility’ average are ranked number 23 out of 45.

23) Crude (CL) High 44.71% - Low 27.07% - Current 31.32%.

Crude options for a one-year ‘implied volatility’ average are ranked number 27 out of 45.

27) Crude (CL) High 40.11% - Low 28.79% - Current 31.32%.

Crude options for a six-month ‘implied volatility’ average are ranked number 32 out of 45.

32) Crude (CL) High 40.11% - Low 28.79% - Current 31.32%.

DAILY CHART:
http://www.bohl.minot.com/d_Chart.cgi?CL06H
-----------------
WEEKLY CHART:
http://www.bohl.minot.com/w_Chart.cgi?CL

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

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

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

MARCH EURO-CURRENCY (FX) (EC6H)

Two weeks ago I began developing several 'trading modules' for the March Euro-Currency because of a monthly buy signal that was posted at 1.2123 on 1/04/06 and a weekly buy signal posted at 1.2205 on 1/17/05 (night trading).

The March Euro-Currency had been in a five-week price decline that began from highs of 1.2691 (9/02/05) to lows of 1.1719 (11/15/05).

Recently, the March Euro-Currency has been in a twenty-four day price advance from lows of 1.1825 to highs posted at 1.2227 (1/06/06).

Currently, the March Euro-Currency has been in a three-week trading range between lows of 1.2046 and highs of 1.2227.

A price consolidation will continue until the March Euro-Currency posts a close below 1.2046 or posts a close above 1.2227.
The ‘Commitment of Traders’ report - published each Friday by the CFTC - indicated that the net change in open interest last week increased by 2,179, posting a total open interest of 129,565 contracts.  

WHAT DOES THE MARCH EURO-CURRENCY CHART LOOK LIKE?

The March Euro-Currency has been in a multi-year price decline which began from highs of 1.3780 (12/30/04) to recent lows of 1.1719 (11/15/05).

The March Euro-Currency began its current price advance from lows posted at 1.1719 (11/15/05) and 1.1720 (11/17/05) to recent highs of 1.2227 (1/06/06).

The March Euro-Currency may have posted a bullish spread 'double bottom' at the 1.1719 - 1.1720 price level.

Confirmation of a spread 'double bottom' was multiple closes above 1.2122.

The March Euro-Currency has multiple unfilled price gaps above the current market price. The most recent unfilled price gap is between 1.2477 and 1.2500.  

The March Euro-Currency has two unfilled price gaps below the current market price. The first unfilled price gap is between 1.1961 and 1.1962. The second unfilled price gap is between 1.1875 and 1.1876. 

For twenty days the March Euro-Currency has closed above its 40-day moving average and 50-day moving average - which as of Friday was at was at 1.1982 and 1.1971, respectively.

The March Euro-Currency closed Friday at 1.2174 - which is above its 100-day moving average of 1.2084 yet below its 200-day moving average of 1.2323.

Two weeks ago I discussed that there is a longer-term possibility of a bearish 'head and shoulders' top forming. Over the next three to four months it will be important to monitor this potential development. Resistance will be at the 1.2595 level.

Listed below are the original trade signals that the March Euro-Currency has recently posted:

On 11/15/06 and 11/17/05, the March Euro-Currency posted a potential spread 'double bottom' at 1.1719 and 1.1720, respectively.

On 12/12/05, the March Euro-Currency posted a weekly buy signal at 1.1912.

On 12/30/05, the March Euro-Currency posted a weekly sell signal at 1.1853.

On 1/04/06, the March Euro-Currency posted a monthly buy signal at 1.2123.

On 1/06/06, the March Euro-Currency posted a daily buy signal at 1.2167.

On 1/17/06, the March Euro-Currency posted a weekly buy signal at 1.2205.

On 1/20/06, the March Euro-Currency posted an ‘intra-day’ buy signal at 1.2163.

The March Euro-Currency, due to extreme volatility, is not for the inexperienced trader.

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

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

WHAT WERE TRADERS ADVISED TO DO TWO WEEKS AGO?

http://www.cleartrade.com/images/letter_1_08_06.htm

WHAT ARE TRADERS ADVISED TO DO NEXT WEEK?

Aggressive traders who established long positions at the 'monthly' buy signal at 1.2123 are advised to move their stops below 1.2046*.

Aggressive traders who either added to their existing long positions or established a long position at the daily buy signal at 1.2167 are advised to move their stops for this position below 1.2046*.

Aggressive traders who either added to their existing long positions or established a long position at the ‘intra-day’ buy signal at 1.2163 are advised to move their stops for this position below 1.2046*.

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

# 1) If the March Euro-Currency first posts a higher high than last week's high of 1.2214:

Aggressive traders are advised to wait for multiple closes above 1.2227 to either add to their established long position or establish a long position.

If the March Euro-Currency posts multiple closes above 1.2227, aggressive traders are advised to move all stops below 1.2122.

# 2) If the March Euro-Currency posts multiple closes over 1.2263:

Aggressive traders are advised to either add to their established long position or establish a long position, placing stops for this position only below 1.2227*.

Aggressive traders are advised to leave all stops below 1.2122*.

Our objective will be to challenge old highs at 1.2311 and the 200-day moving average at 1.2323.

# 3) If the March Euro-Currency posts multiple closes above the 200-day moving average at 1.2323:

Aggressive traders are advised to either add to their established long position or establish a long position, placing all stops below 1.2227*.

Our objective will be the unfilled price gap between 1.2477 and 1.2500.

#4) If the March Euro-Currency first posts a lower low than last week's low of 1.2075:

Aggressive traders are advised to leave their stops below 1.2046.

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

# 5) If the March Euro-Currency first posts a higher high than last week's high of 1.2214 yet reverses, posting a lower low than last week’s low of 1.2075:

Aggressive futures traders are advised to leave all stops below 1.2046.

In addition, traders are advised to place resting buy stop orders at 1.2228.

If the resting buy stop order at 1.2228 is activated, aggressive traders are advised to add to their existing long positions, establish a long position, or reestablish their long positions.

If 1.2228 is posted, aggressive traders are advised to place stops below 1.2122*.

# 6) If the March Euro-Currency first posts a lower low than last week's low of 1.2075 yet reverses, posting a higher high than last week's high of 1.2214:

Aggressive traders are advised to place resting buy stop orders at 1.2228 to add to their existing long positions, establish a long position, or reestablish their long positions.

If 1.2228 is posted, aggressive traders are advised to place all stops below 1.2122*.

Below are possible ‘monthly reversal trading modules’ to consider:

# 7) If the March Euro-Currency posts a monthly close at or below 1.1726:

Aggressive traders will have liquidated their long positions and are advised to establish a short position, placing stops above 1.1857*.

Our first objective will be an all out assault on contract lows at 1.1719.

I have compiled some Euro-Currency option facts for traders:

Euro options for a two-year ‘implied volatility’ average are ranked number 26 out of 45.

26) Euro (EC) High 13.02% - Low 8.01% - Current 8.96%.

Euro options for a one-year ‘implied volatility’ average are ranked number 13 out of 45.

13) Euro (EC) High 9.94% - Low 8.01% - Current 8.96%.

Euro options for a six-month ‘implied volatility’ average are ranked number 11 out of 45.

11) Euro (EC) High 9.53% - Low 8.37% - Current 8.96%.

DAILY CHART:
http://www.bohl.minot.com/d_Chart.cgi?EC06H
-----------------
WEEKLY CHART:
http://www.bohl.minot.com/w_Chart.cgi?EC

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

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

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

MARCH DOW JONES (DJ6H)

Two weeks ago I began developing several 'trading modules' for the March Dow Jones because of an 'intra-week' buy signal at 10986 and monthly buy signal that was posted at 11001.

In addition, I warned traders that the trade signals listed above looked perfect for a further price advance ... however, the charts indicated some negative 'feedback.'

The most negative indicator was that each trade signal posted since January 3rd were all 'intra-day', 'intra-week' and 'intra-month' buy signals. This indicated a counter-trend, which could be a bull trap. I advised traders to be careful and not fall asleep on this one. 

The March Dow Jones had been in a five-week price decline that began from highs of 1.2691 (9/02/05) to lows of 1.1719 (11/15/05).

Recently, the March Dow Jones has been in an eleven-week price advance from lows of 10257 (10/13/05) to highs of 11085 (1/11/06).

Currently, the March Dow Jones has had a price decline from posted highs of 11085 to lows Friday of 10680.

The ‘Commitment of Traders’ report - published each Friday by the CFTC - indicated that the net change in open interest last week decreased by -1,042, posting a total open interest of 40,565 contracts.  

WHAT DOES THE MARCH DOW JONES CHART LOOK LIKE?

The March Dow Jones has been in a multi-year price advance, which began from lows of 7180 (10/11/02) to recent highs of 11085 (1/11/06).

The March Dow Jones began its current price advance from lows posted at 10257 (10/13/05) to recent highs of 11085.

The March Dow Jones had been in an eleven-week trading range between lows of 10715 and highs of 11027.

Until the Dow can post multiple closes above 11027 (4-days minimum) or multiple closes below 10715 (4-days minimum), the Dow Jones may be in a price consolidation coiling for an eventual explosive breakout.

The March Dow has two unfilled price gaps above the current market price. The first unfilled price gap is between 10958 and 10973. The second unfilled price gap is between 11066 and 11070.   

The March Dow has several unfilled price gaps below the current market price. The first unfilled price gap is between 10595 and 10600. The second unfilled price gap is between 10500 and 10531.   

The March Dow is below its 40-day moving average and 50-day moving average - which as of Friday was at was at 10915 and 10883, respectively.

The March Dow closed Friday at 10684 which is below its 100-day moving average of 10696 and above its 200-day moving average of 10665.

The March Dow's high in 2005 was at 11027 and this year's high is at 11085. 

The March Dow’s low in 2005 was 10000 and this year’s low is 10680.

If the March Dow Jones or subsequent months in the Dow Jones futures can post a close below 10000, this would constitute a possible yearly sell signal and would suggest a continuation pattern conducive to lower prices.

Listed below are the original trade signals that the March Dow has recently posted:

On 1/03/06, the March Dow posted an 'intra-day' buy signal at 10806.

On 1/06/06, the March Dow posted an 'intra- week' buy signal at 10986.

On 1/06/06, the March Dow posted an 'intra-month' buy signal at 11001.

On 1/20/06, the March Dow posted an ‘intra-month’ sell signal at 10730.

The March Dow, due to extreme volatility, is not for the inexperienced trader.

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

If you do not fit this risk profile, traders are advised to use the Mini Dow Jones contract as their trading vehicle.

WHAT WERE TRADERS ADVISED TO DO TWO WEEKS AGO?

http://www.cleartrade.com/images/letter_1_08_06.htm

WHAT ARE TRADERS ADVISED TO DO NEXT WEEK?

Aggressive traders who established a short position at the 'intra-month' sell signal of 10729 are advised to move their stops above 10880*.

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

# 1) If the March Dow first posts a lower low than last week's low of 10680:

Aggressive traders are advised to wait for multiple closes below the 200-day moving average of 10665 before either adding to their existing short position or establishing a short position.

If the March Dow posts multiple closes below 10665, aggressive traders are advised to either add to their existing short positions or establish a short position, placing stops for this position above 10730.

Our first objective will be 10595.

# 2) If the March Dow posts multiple closes below 10595:

Aggressive traders are advised to either add to their established short positions or establish a short position, placing all stops above 10730*.

Our second objective will be 10500.

Our next objective will be 10425.

# 3) If the March Dow first posts a price advance to the ‘intra-month’ sell signal 10730:

Aggressive traders are advised to either add to their existing short positions or establish a short position, placing stops above 10880*.

Below are possible ‘monthly and yearly reversal trading modules’ to consider:

# 4) If the March Dow posts a higher high than last month's high of 11000:

Aggressive traders will have liquidated their short positions and are advised to establish a long position, placing stops below 10945*.

Our first objective will be the unfilled price gap between 11066 and 11070.

# 5) If the March Dow ever posts multiple closes below 10000:

Aggressive traders are advised to either add to their existing short position or establish a short position.

I have compiled some Dow option facts for traders:

Dow options for a two-year ‘implied volatility’ average are ranked number 17 out of 45.

17) Dow (DJ) High 18.17% - Low 9.84% - Current 12.24%.

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

43) Dow (DJ) High 14.60% - Low 9.84% - Current 12.24%.

Dow options for a six-month ‘implied volatility’ average are ranked number 12 out of 45.

12) Dow (DJ) High 14.60% - Low 9.85% - Current 12.24%.

DAILY CHART:
http://www.bohl.minot.com/d_Chart.cgi?DJ06H
-----------------
WEEKLY CHART:
http://www.bohl.minot.com/w_Chart.cgi?DJ

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

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

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

MARCH COTTON (CT6H)

In The Joss Report’s last newsletter for 2005 I began developing several 'trading modules' for March Cotton because of a weekly buy recommendation and a daily buy recommendation.

On 12/12/05, March Cotton posted a weekly buy signal at 53.26.

On 12/16/05, March Cotton posted an 'intra-day' buy signal at 53.36.

Since the beginning of December 2005 I've mentioned in my newsletters that the WTO would try to tackle cutting Cotton subsidies.

Traders need to take note that the text version of subsidy cuts for Cotton is fast approaching.

The WTO had set a time frame of the end of April to complete what may be the beginning of the end for worldwide subsidies. The primary focus will be on Cotton for subsidy cuts and may pave the way for future subsidy cuts to all Ag products.

The ‘Commitment of Traders’ report - published each Friday by the CFTC - indicated that the net change in open interest last week increased by 4,602, posting a total open interest of 116,552 contracts.  

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

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

WHAT DOES THE COTTON AND MARCH COTTON CHART LOOK LIKE?

Below is a quick overview of Cotton prices:

Cotton has been in a multi-year price decline that began from highs of 1.1720 (4/30/95) (near old highs from the civil war) to lows of 28.20 (10/31/01).

Recently, Cotton had a price advance from lows of 28.20 to highs of 84.80 (10/31/03).

Currently, Cotton has been in a price decline from highs of 84.80 to lows of 42.00 (8/31/04).

Cotton prices are currently at 56.57.

Below is an overview of March Cotton:

March Cotton had been in a six-week price decline that began from highs of 59.25 (10/13/05) to lows of 51.38 (12/02/05).

March Cotton began its current seven-week price advance from lows posted at 51.40 (12/01/05) and 51.38 (12/02/05) to recent highs of 56.65 (1/20/06).

March Cotton may have posted a bullish spread 'double bottom' at the 51.40 – 51.38 price level.

Confirmation of a spread 'double bottom' was a close above 55.40.

March Cotton has multiple unfilled price gaps above the current market price. The most recent unfilled price gap is between 57.45 and 57.50.  

March Cotton has three unfilled price gaps below the current market price. The first unfilled price gap is between 54.25 and 54.35. The second unfilled price gap is between 52.90 and 53.00. The third unfilled price gap is between 51.80 and 51.95.

For twenty-four days March Cotton has closed above its 40-day moving average and 50-day moving average - which as of Friday was at was at 53.80 and 53.70, respectively.

March Cotton closed Friday at 56.57 - which is above its 100-day moving average of 54.07 and its 200-day moving average of 54.57.

March Cotton has developed a symmetrical bullish ‘V’ bottom formation or a rounded saucer bottom formation.

The upward ‘V’ trendline begins at lows of 51.38 through lows of 53.07 and if touched today would intersect at 54.25.

The rounded saucer bottom is more visual when you look at the daily March Cotton chart.

Both formations are very bullish.

Listed below are the original trade signals that the March Cotton has recently posted:

On 12/01/05 and 12/02/05, March Cotton posted a potential spread 'double bottom' at 51.40 and 51.38, respectively.

On 12/12/05, March Cotton posted a weekly buy signal at 53.26.

On 12/16/05, March Cotton posted an 'intra-day' buy signal at 53.36.

On 12/19/06, March Cotton confirmed its spread double bottom by posting a close above 55.40.

On 1/16/06, March Cotton posted an ‘intra-week’ buy signal at 56.01.

On 1/20/06, March Cotton again posted an ‘intra-week’ buy signal at 56.01.

WHAT WERE TRADERS ADVISED TO DO ON 12/18/05?

http://www.cleartrade.com/images/letter_12_18_05.htm

WHAT ARE TRADERS ADVISED TO DO NEXT WEEK?

Aggressive traders who established a long position in March Cotton at 53.26 are advised to move stops below 54.50*.

Option traders who purchased March 54 calls are advised to roll their positions to May 58 calls, risking 70% of purchased price**. There are only nineteen days left on these options.

Aggressive traders who either added to their existing long position or established a long position on the 'intra-day' buy signal at 53.36 are advised to move stops below  54.50*.

Aggressive traders who either added to their existing long position or established a long position on the 'intra-week' buy signal at 56.01 are advised to leave stops below 54.50*.

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

# 1) If March Cotton first posts a higher high than last week's high of 56.65:

Aggressive traders are advised to either add to there existing long positions or establish a long position, placing stops below 54.50*.

Option traders are advised to purchase May 60 calls, risking 70% of purchase price**.

Longer-term option traders are advised to purchase multiple July 70 calls, risking 100% of purchase price**.

# 2) If March Cotton posts multiple closes over 57.20:

Aggressive traders are advised to either add to their established long position or establish a long position, placing stops for this position only below 56.01*.

Option traders are advised to purchase May 62 calls, risking 70% of purchase price**.

Our first objective will be the unfilled gap at 57.50.

Our intermediate-term objective will be 59.42.

# 3) If March Cotton posts multiple closes above 58.40:

Aggressive traders are advised to either add to their established long position or establish a long position, placing all stops below 56.65*.

Option traders are advised to purchase May 64 calls, risking 70% of purchase price**.

Our intermediate-term objective will be 59.42.

#4) If March Cotton first posts a price decline to 55.40:

Aggressive traders are advised to either add to their existing long position or establish a long position, placing stops below 54.50*.

Option traders are advised to either purchase May 58 calls or longer-term traders are advised to purchase July 65 calls, risking 70% and 100% of purchase price**, respectively.

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

# 5) If March Cotton first posts a higher high than last week's high of 56.65 yet  reverses, posting a lower low than last week’s low of 54.50:

Aggressive futures traders will have liquidated their long positions and are advised to place resting buy stop orders at 56.66.

If March Cotton posted 56.66, aggressive traders will have reestablished their long positions, placing stops below 54.50*.

# 6) If March Cotton first posts a lower low than last week's low of 54.50 yet reverses, posting a higher high than last week's high of 56.65:

Aggressive futures traders will have liquidated their long positions and are advised to place resting buy stop orders at 56.66.

If March Cotton posted 56.66, aggressive traders will have reestablished their long positions, placing stops below 54.50*.

Below are possible ‘monthly reversal trading modules’ to consider:

# 7) If March Cotton posts a monthly close at or below 51.38:

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

I have compiled some Cotton option facts for traders:

Cotton options for a two-year ‘implied volatility’ average are ranked number 38 out of 45.

38) Cotton (CT) High 47.91% - Low 21.51% - Current 22.80%.

Cotton options for a one-year ‘implied volatility’ average are ranked number 39 out of 45.

39) Cotton (CT) High 38.90% - Low 21.51% - Current 22.80%.

Cotton options for a six-month ‘implied volatility’ average are ranked number 40 out of 45.

40) Cotton (CT) High 38.90% - Low 21.51% - Current 22.80%.

DAILY CHART:
http://www.bohl.minot.com/d_Chart.cgi?CT06H
-----------------
WEEKLY CHART:
http://www.bohl.minot.com/w_Chart.cgi?CT

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

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

 

CHART WATCH by Scott R. Joss (Non member C.T.A)*

 

Readers and clients call during the week and ask: What are you watching?

Watching can mean that the markets are developing a 'recommendation' or a chart pattern that has not yet fully developed - or may never develop.

During the course of the week or month it is not uncommon to find an `intra-day, intra-week or intra-month' recommendation that was previously not revealed when this newsletter was written.

Products that currently fit into this 'watch' category are listed below and should be 'watched.'

MARCH SILVER (SI6H)

March Silver will be placed in the ‘Chart Watch’ section this week because of a bullish ascending right triangle.

The ‘Commitment of Traders’ report for Silver - published each Friday by the CFTC - indicated the net change in open interest last week increased by 976, posting a total open interest of 131,701 contracts.  

Silver is not for the inexperienced trader or the faint of heart due to extreme volatility.

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

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

WHAT DOES THE MARCH SILVER CHART LOOK LIKE?

March Silver has been in a multi-year price advance that began from lows of 4.050 (11/30/01) to recent highs of 9.295 (1/09/06).

Recently, March Silver had traded from lows of 8.290 (12/21/05) to highs of 9.295.

Currently, March Silver has been in a seven-week trading range between lows of 8.285 and highs of 9.295.

A price consolidation will continue until March Silver posts a close below 8.285 or posts a close above 9.295.

March Silver for eleven-weeks has closed above its 40-day moving average and 50-day moving average as of Friday which were at 8.870 and 8.610, respectively.

March Silver closed Friday at 8.930 which is above its 100-day moving average of 8.060 and its 200-day moving average of 7.660.

March Silver is developing a bullish 'ascending’ right triangle.

The 'ascending’ right triangle’s upward trendline began from lows of 6.800 through lows of 7.500, 7.550 and if touched today would intersect at 8.320.

The ‘ascending’ right triangle’s horizontal trendline touches highs of 9.280, 9.295, 9.270 and 9.275.

If March Silver were to post multiple closes above contract highs at 9.295, this would suggest a continuation pattern that is conducive to higher prices.

Our immediate objective would be 10.305.

WHAT ARE TRADERS ADVISED TO DO NEXT WEEK?

Option traders who either purchased outright calls or purchased bull call spreads are advised to continue to risk 70% of the purchased price.

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

# 1) If the March Silver first posts a higher high than last week's high of 9.275:

Aggressive futures traders are advised to wait for multiple closes above 9.295 before  establishing a long position.

If March Silver posts multiple closes above 9.295, aggressive traders are advised to establish a long position, placing all stops below 8.790*.

Option traders are advised to purchase March 950 calls, risking 70% of purchase price**.

Our objective will be 9.850.

# 2) If the March Silver posts multiple closes above 9.880:

Aggressive futures traders are advised to either add to their existing long position or establish a long position, placing all stops below 9.270*.

Option traders are advised to purchase March 975 calls, risking 70% of purchased price**.

Our next objective will be a challenge of 10.170 (3/31/84).

# 3) If March Silver posts multiple closes above 10.170:

Aggressive futures traders are advised to either add to their existing long position or establish a long position, placing all stops below 9.295*.

Option traders are advised to purchase March 1000 calls, risking 70% of purchased price**. 

Our next objective will be 10.30.5.

# 4) If March Silver posts multiple closes above 10.500:

Aggressive futures traders are advised to add to their existing long position or establish a long position, placing all stops below 9.880*.

Option traders are advised to purchase 1050 calls risking 70% of purchased price**. 

Our next objective will be to fill the price gap at 10.720.

# 5) If March Silver first posts a price pullback:

Aggressive futures traders are advised to sit on the sidelines and wait for a possible breakout above 9.295.

Option traders are advised to not add to their existing option position but are advised to wait for a possible breakout above 9.295.

I have compiled some Silver option facts:

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

3) Silver (SI) High 42.12% - Low 18.90% - Current 39.86%.

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

3) Silver (SI) High 32.15% - Low 19.14% - Current 31.35%.

Silver options for a six-month ‘implied volatility’ average are ranked number 4 out of 45.

4) Silver (SI) High 32.15% - Low 19.14% - Current 31.35%.

DAILY CHART:
http://www.bohl.minot.com/w_Chart.cgi?SVO6H
-----------------
WEEKLY CHART:
http://www.bohl.minot.com/w_Chart.cgi?SV

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

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

CURRENT 'MONTHLY' RECOMMENDATIONS FOR JANUARY:

- MARCH DOW JONES (DJ5H)

- MARCH EURO-CURRENCY

- MARCH SWISS FRANC

- FEBRUARY CRUDE OIL

FUTURE WATCH

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

 

- Potential monthly recommendations will be listed next week.

 

 

NOTE:

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

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

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

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

ClearTrade®, Inc.
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Suite 2104
Chicago, IL 60640

(800) 493-4444
(773) 561-9777 Voice
(773) 561-9775 Fax

 

Mailto:research@cleartrade.com 
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DISCLAIMER:

* COMING EVENTS AND DATA RELEASES:

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

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

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

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

Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.
====================================

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

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

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