Futures Market - Food Highlight #1
Exact day of 1998 high in coffee identified through use of weekly/monthly "Inversion Cycle" and "Linear Time Cycle" ALIGNMENTS.
(COMMENT #s 44, 53, 54)
UPDATED 19980121
COMMENT 1998-44
1. Note on page 389 of "The 1997 $upertrader's Book of Linear Time Cycles" how both the weekly "Window Index" and "Cycle Index" are both projecting a high in this market soon.
2. Note on the same page in the "Cycle Lineups" section that the monthly indexes are also ALIGNING this month.
3. Can you grab a daily chart of the March contract and observe the clear "5 Elliott Waves" down from the December high to the December low and subsequent "A-B-C" correction to today's high?
4. Traders should be particularly sensitive to market reversals to the downside in this market and should employ approaches that provide short entry with tight stops against recent highs in the March contract.
5. The very short term trading system presented on pages 96-101 of "The $upertrader's Almanac - Reference Manual" is such a "system" and should be employed on hourly and smaller time frames if such data is available to the trader.
6. A close below the open over the next few days will cause a "white" candlestick which should be sufficient to provide a short term entry signal.
7. The system presented in pages 205-209 of "The $upertrader's Almanac - Reference Manual" is particularly suitable for this market at this time as is the "ALMANAC II" trading system presented in "The 1996 $upertrader's Almanac - 2nd Half Edition. Note that the same pattern applies to the hourly chart which reduces risk and provides for tighter stops.
8. The reader should observe that trading is simply the process of identifying a number of situations such as this one that have a chance of working out quite well if the analysis is correct but which involve very little risk to capital if wrong.
UPDATED 19980202
COMMENT 1998-53
Don't overlook COMMENT # 44.
1. 39 trading hours down (3 X FIB # 13).
2. 33 trading hours up to the "A" wave (34 = FIB #).
3. 20 trading hours down to the "B" wave (21 = FIB #).
4. 65 trading hours up to the "C - 2" wave (64 = SQ FIB # 8).
5. 118 total corrective trading hours.
6. RATIO 118 / 39 = 3.026 (trinity).
7. In trading days, 8 down (FIB #), 7 up, 4 down, 13 up (24 total = 8 X 3).
8. In calendar days, 12 down, 15 up, 6 down, 18 up.
UPDATED 19980205
COMMENT 1998-54
More on COMMENT #s 44 and 53.
1. The 980130 decline required 55 (FIB # = 55) 4 minute periods and covered 1200 points.
2. The assumed "a wave" from the 980130 low to the 980202 high required 55 (FIB # = 55) 4 minute periods and covered 800 points (FIB # 8 X SQ (FIB # 5 X FIB # 2) = 800).
3. The assumed "b wave" from the 980202 high to the 980204 low required either 102 or 110 (FIB # 8 X FIB # 13 = 104) 4 minute periods and declined 500 points (FIB # 5 X SQ (FIB # 5 X FIB # 2) = 500).
4. The assumed "c wave" from the 980204 low to the 980205 high required either 110 or 102 (FIB # 8 X FIB # 13 = 104) 4 minute periods and rose 750 points (FIB # 8 X SQ (FIB # 5 X FIB # 2) = 800).
5. This setup is ideal for short positions so long as the 980130 high is not broken.
6. Can you see that the trading technique presented on pages 205-209 of "The $upertrader's Almanac - Reference Manual" is ideal for this situation?
7. The question you should be asking with regard to this COMMENT is "Why were 4 minute periods used"?
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