9/30/09 - The Crude oil is forming a bearish swing pattern on the sloping reaction line support. Mondayâ€™s higher close is the second consecutive higher close leading into Tuesdayâ€™s projected reversal swing date and is a strong confirmation of September 24th as the swing pivot low.Â Over the past three months, Crude oil has been trading in a very choppy, sideways pattern, so I have had to look for very short-term swing trades. However, the last breakout was out of a 3-wave continuation pattern and seems to be following the classic reaction cycle. This would suggest the current reaction swing is setting up another sell pattern and, if confirmed, a test of the July 13th low of 61.38.Â Â Sell November Crude oil at 64.97 stop, with the stop loss above the swing high.
9/29/09 - The Crude oil is forming a bearish swing pattern on the sloping reaction line support. Mondayâ€™s higher close is the second consecutive higher close leading into Tuesdayâ€™s projected reversal swing date and is a strong confirmation of September 24th as the swing pivot low.Â Over the past three months, Crude oil has been trading in a very choppy, sideways pattern, so I have had to look for very short-term swing trades. However, the last breakout was out of a 3-wave continuation pattern and seems to be following the classic reaction cycle. This would suggest the current reaction swing is setting up another sell pattern and, if confirmed, a test of the July 13th low of 61.38. Â Â Sell November Crude oil at 64.97 stop, with the stop loss above the swing high.
09/25/09 -10:10 am MST - Crude oil reached the reaction line target objective on a projected reversal swing date. A good example of time matching price. I look for a slight rebound in Crude oil. A two or three day bounce could form a new reaction swing pattern and another selling opportunity.
9/25/09 - 8:20 am MST - One of the biggest problems for any trader is where to exit a successful trade. Entering a trade is fairly easy and much less stressful that finding an exit. When it comes to looking at swing trading strategies, there are many different approaches. Some say use targets and others suggest letting the trade continue until it is exited with a stop. Both have pros and cons.Â Here is a swing trade just completed by the RT Swing Trader in the November RBOB gas (Unleaded gas). The sell was triggered 1.7310 on September 23. Two days later, RBOB reached the point where the lower descending parallel line and the sloping reaction line crossed. These are two high probability target objectives converging at 1.6475...835 points in two day!
9/18/09 - Crude oil is forming a tight reaction swing pattern above the 20-day SMA.Â Friday's retest of the 20-day SMA provided support that could act as the springboard for the next upward price swing. The market is also breaking out of a longer-term 5-wave continuation pattern that had formed from early August through the first week of September.Â This pattern typically appears in the center of a longer-term trend and projects out to a target objective of 81.00 or higher.
Every trader has experienced it and it is never fun. You find a pattern setup that looks good and you enter the trade on the break above the swing pivot. Everything looks good for awhile and then the market reverses and begins to fail. Then you realize you are looking at a swing pattern failure and a possible losing trade. The main characteristics of a swing pattern failure is the tendency to make a significant move in the opposite direction after the failure to carry through on the breakout direction.
Another thing that I have observed isÂ that a the swing pattern failure will usually (nothing happens all the time) occur at the center of the reaction cycle and form an A-B-C continuation pattern in the process.
In this example, the October N-gas had formed a bearish TR pattern during the mid part of June and signaled a drop into July 13. From this point, the N-gas staged a short-term rally before retracing to make a higher low inside the 60% buy window on July 29. The following day would break above the signal bar and trigger a buy at 3.927. Two days later the market staged a price surge above the previous pivot high and reached a high of 4.421. Now, we're sitting on a nice long position, with an open trade gain, thinking the market will continue to move higher over the next few days.
Didn't happen. Instead, the market failed and reversed two days later. Here is where it gets tough to make the next decision.Â Most traders would either getÂ stopped out with a small gain or loss and then stand aside. But, we do know that a failure swing pattern will usually lead to large price move in the opposite direction. The October N-gas is no exception. The swing pattern failure formed an A-B-C continuation pattern and signaled a resumption of the downward trend.Â Then the reverse/forward count is used to project future reversal dates and price target objectives. True to form, the market does make the next downward leg into the predicted date and just slightly beyond the projected target price.
The lesson learned here, don't get discouraged if the market fails on a breakout, it may be setting up for an even bigger move. You just have to know what to look for and not be
afraid to take action.
9/9/09 - 11:14 am MST - I am frequency asked if the reversal date swing trading strategy will work for daytrading.Â The answer is "yes", when the pattern setup is correct. Here is a great example in the Oct Crude oil. The A-B-C continuation pattern between 6:20 am and 7:40 am provided the foundation for a good trade. The market dipped into the 60% buy window at 7:40 am. The buy signal was triggered at 71.50 ( above the high of the price bar that entered the 60% buy window. This is called the signal bar). The reverse count was 6, 17 and 25. I have them marked on the chart. The forward count to 6 fell on the pivot high of 72.19, offering aÂ nice short-term swing trade, but the market did not reach the reaction line target objective until bar 17, allowing an exit at 72.40 for a very nice gain.
After a short-term correction, Crude rallied to a new high on the forward count bar "25" where it peaked and turned lower.
9/2/09 -7:15 am MST -In Monday the afternoon issue of the Traders Market Views Swing Trade report I said there was an opportunity for a short-term swing trade in the October Crude oil. I recommended selling a retest of the 20-day SMA at 69.75. The market reached the sell entry price on a early session rally, before turning and closing sharply lower on Tuesday.Â Wednesday morning,
Crude oil dipped below the target objective--set at the August 17 swing low of 67.42--and closed the short position for a very nice gain.
8/31/09 - 8:50 am MST - Oct Crude is set totrade through the (C) point trigger price a confirm the TR pattern ( Swing trade strategy pattern that typically appears at major tops ot bottoms) and the sell signal. The inital target objective is the downward sloping centerline.
8/31/09 - 8:35 am MST - Heating oil hit resistance on the retest of the 20-day SMA on Friday. This ended the three-day corrective rally and set up a bearish reaction swing pattern. The sell was triggered early Monday morning, followed by heavy selling. The next swing trade date (reversal date) is due on September 2 with an initial target objective of 1.7510.