Futures Market - Soybean Highlight #2
ALIGNMENTS combine to signal long positions in soybean meal at the low for the first half of the year and prior to sharp rally.
(COMMENT # 428)
UPDATED 19980610
COMMENT 1998-428
We've got to move on. So here's another e-mail;
"This is the first time I have sent anything to your e-mail. I have purchased some of your books over the past few years. In particular I like the cycles book. I have just recently begun using your updates on the internet. Very interesting.
I wanted to inquire concerning how I am reading something relating to soybean meal. It seems to me that this market has one of the strongest set-ups being formed right now due to the following;
1. monthly linear cycle bottom in May 2. highest monthly inversion index for the year in June 3. weekly linear cycle bottom middle of June 4. yearly high for cycle inversion index at the same time, middle of June 5. price action consistenly down since last November, down about $80 so far
Is this a reasonable way to look at this market in light of your information and is there anything significant that I have missed or wrongly interpreted?
Thanks for your informative works.
RG"
1. The spot contract low in meal was 15200.
2. This low was attained 980511, 1 day before the major "A Point" listed on page 398 of "The 1998 $upertrader's Almanac - 1st Half Edition".
3. The most liquid contracts right now are July and December.
4. Astonishingly, both daily RSI and Slow Stochastics have been trading UP over the last several weeks since the late February low.
5. The oscillator/price DIVERGENCES (see pages 171-184 of "The $upertrader's Reference Manual) have occurred as price has moved sideways so lower.
6. See Tuesday's information on page 246 of "The 1998 $upertrader's Almanac - 1st Half Edition" which is likely to prove important to this market.
7. See also the bottom of page 250.
8. Now look at the "Anniversary Index" information for this market on page 242.
9. To gain perspective regarding the relative importance of these "Anniversary Dates" to this market, turn to page 376.
10. To see how the linear cycles ALIGN, see the "Cyclic Trends" section in the middle of page 409 of "The 1998-99 $upertrader's Book of Linear Time Cycles".
11. Note the dotted ("Weekly Inversion Cycle Index") and solid ("Linear Cycle Index") lines at the bottom of the page.
12. Turn to page 407 and view the same for the monthly information.
13. Good work, RG!
14. We've obviously got a "set up".
15. Plus, we're sitting RIGHT ON the early 1995 lows of 15110.
16. We're 56 weeks down from the May, 1997 peak in this market (FIBONACCI # = 55).
17. The 1995 to 1997 advance required 115 weeks.
18. Hence, a 50 percent TIME correction is next week/the week after.
19. A break of the 1995 low would mean 10 year or so lows in this market and would turn participants universally bearish.
20. This type set up is one of my favorites - especially if it breaks the 1995 lows.
21. For an example, see COMMENT # 9, Point # 5 in the gold market earlier this year.
22. Individual contracts are not holding recent lows as the spot contract is doing (potentially a negative).
23. All that's left and the key component needed now is a pattern recognition set up and entry.
24. Traders should be particularly sensitive to market reversals to the upside in this market and should employ approaches that provide long entry with tight stops against recent lows.
25. The very short term trading system presented on pages 96-101 of "The $upertrader's Almanac - Reference Manual" is such a "system" and can be used on either daily or intra-day charts.
26. A close above the open over the next few days will cause a "white" candlestick which should be sufficient to provide a short term entry signal.
27. 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.
28. 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.
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