Futures Market - Energy Highlight #4
Market entry trading technique presented in "The
$upertrader's Reference Manual" is used with the "Cyclic Trend" information
from "The 1998-99 $upertrader's Book of Linear Time Cycles" to provide entry in
crude oil just off the third quarter, 1998
lows.
(COMMENT #s 588, 623)
UPDATED 19980818
COMMENT 1998-588
1. Note that there will be times when you will be dead wrong and the market won't turn as
expected.
2. When such is the case, you have to realize that the downside of this approach is not to
chase a market that's not doing what it's supposed to do.
3. Hence, there are times when you'll almost look foolish for having even considered the
possibility that a market might go up.
4. During such times, if our pattern are working correctly, we either experience only very
small losses or never enter the position and, thus, experience no losses at all.
5. Our only concern is to repeatedly (as in over and over and over and over) use these
tools to identify minimum risk/high reward situations.
6. Then put the orders in and go to the beach.
7. It's that easy!
UPDATED 19980831
COMMENT 1998-623
1. Sometimes trendlines take on a little bit added importance.
2. As an example, let's turn to page 310 in "The 1998 $upertrader's Almanac - 2nd
Half Edition".
3. As can be seen, this is a strong seasonal period of the year for this market.
4. What is surprising is that the low in the spot contract was made in June.
5. Individual contracts, such as December, have continued lower, however, as the futures
CONVERGE on the cash and remove the futures' premium.
6. Nevertheless, the market is showing us a DIVERGENCE (see pages 171-184 of "The
$upertrader's Reference Manual").
7. Can you now turn to pages 363 and 365 in "The 1998-99 $upertrader's Book of Linear
Time Cycles"?
8. Note that the cycle indexes on these pages are also up over the next few weeks.
9. This is the 37th week of the year.
10. We can see this monthly/weekly cycle ALIGNMENT by simply glancing in the "Cyclic
Trends" section of page 365.
11. Here we see a series of "B" (buy signals) over the next few weeks.
12. We can also see the effect of the "Cyclic Trend" cycle ALIGNMENTS throughout
the weeks of the year by simply turning to the weekly pages.
13. This week, for instance, they're summarized on page 173.
14. Look under the "Cyclic Trends" section and you'll see the "B"
signal for this week in this market.
15. Now draw a simple down trendline in the December contract off the June and July highs.
16. Can you see that this trendline is just above today's high?
17. Of course, one could also use the trading technique on pages 205-9 of "The
$upertrader's Reference Manual" which is also "set up" for long entry.
18. One should also note that the lows of the last few days are not being CONFIRMED by
momentum oscillators such as RSI and Slow Stochastics.
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