July Cocoa - When July Cocoa dipped into the 60% buy window on April 12th, the RT Swing Trader program triggered a buy signal for the July Cocoa at 2934. As soon as the buy signal was triggered, the RT Swing Trader identified April 26th as the projected reversal swing date and placed the reaction target objective at the 3200 to 3250 price objective. As you can see for the chart below, during the following eleven trading days, Cocoa rallied from the entry price at 2934 and finally reached the reaction line target objective of 3228 on the projected reversal swing date of April 26th. This is a prime example of how understanding how to use the action-reaction methodology and being able to identify the proper set up pattern can be used to enhance any trading approach. If you do not have the time to do the proper analysis, the RT Swing Trader will do it for you.
This Coffee chart is a great example how the median line (center line) acts like a magnet toÂ attract price. How the market reacts to this line can be a very good indicator of future price action. A market that reaches the line quickly and with a wide range day will typically reverse at the line. On the other hand, a market that gradually moves toward the line in an orderly manner can penetrate the line slightly will usually trade on both sides of the line,Â forming a series of small swing patterns, before breaking inÂ direction of the origional trend andÂ move towardsÂ next parallel line. Lastly, if the market surges through the line and closes with a major part of the trading range past the median, it will usually pullback to test the median line--offering one more opportunity to enter the market--before trading towards the new parallel line target objective.Â Â Looking at theÂ Coffee chart, you can see how the the market posted a wide range day on March 18, touched the line and dropped back to the lower support line before making another run at the median line. The market is currently trading along the line making higher highs.
The last thing of importance is when the market fails to reach the median line. This price action signifies a price failure can set up a major price move in the opposite direction. All of this things offer helpful insight into market behavior and Â future market direction.
Sugar completed a bearish TR pattern after the (D) pivot high was confirmed inside the 60% sell window on February 16. (SeeÂ February 17th issue of TMV Swing Trading Report) Â The sell signalÂ at 26.05 was triggered the following day. The reverse/forward count projected the future reversel date for February 24 (marked on chart) with a target at 23.65.Â Sugar formed a new swing pattern inside the (C) to (D) reaction swing, but the two day paused ended with a large outside day on February 22. The market reached the 23.65 target objective the following day for a gain of 240 points.
March Sugar â€“ According to the F.O. Licht Research Company, sugar prices probably will decline from a 29-year high this year as a â€œhuge increaseâ€ in production, mainly by Brazil, may balance the market. Higher prices encouraged farmers to boost planting and weather in Brazil provided improved growing conditions to help increase production. Looking at the Sugar charts, I see that the market has made three higher highs since January 21st with each new high stopped by the ascending median line resistance. I have February 5th as the next projected reversal swing date. However, I donâ€™t expect to see any significant rally in Sugar before that date. The three higher highs are indicative of a market losing momentum and a possible top. I will monitor the market for a entry signal and have a new recommendation in the TMV Swing Trade report.
TMV Swing trade report subscribers were alerted to a swing trading opportunity on the March Coffee in last night's issue. The sell signal was triggered at 138.25 and the market immediately fell to a low of 133.55 and reached the median line target objective.
The current upward cycle for the recent run in Sugar may have come to and end. The market has been tradign on the weak side of the ascending median line and failed to reach the sloping reaction line target objective before the January 27, reversal swing date. This is a indication the market is losing momentum and signals and end to the current rally. Time to exit long positions.
Silver crossed over the median line on December 9, but failed to follow through. The market rallied in a corrective rally and hit resistance at the 20-day SMA and closed sharply lower on Thursday. This is a negative pattern and portends another leg lower for the Silver.Â Â The sell was triggered at 16.89.Â Silver is projected to trade lower into the December 28 reversal swing date
The TMV swing trade strategy was filled at 145.85 early in Tuesday's session. The market rebounded off the upward sloping parallel line and the 20-day SMA to confirm the TC swing pattern. The reverse/forward count projects a price move to the reaction line target at 158.00 with the next reversal swing date due on December 28th.
8:45 am MST - The recent long position was closed after Coffee backed away from the three-point trend line. I want to see a pullback and a new entry price.Â Since the longer-term cycle is still bullish into the December 14th reversal swing date, Friday's pullback to the 20-day SMA is a new buying opportunity with a target objective of 152.00 where the sloping reaction line and ascending median line cross.Â This can be a very good swing trading opportunity.
According to the Dow Jones Newswires, Colombia's Federation of Coffee Growers projected this year's coffee crop to be 8.1 million bags in 2009. That total is down from 11.5 million bags produced in 2008. Coffee exports from India, Asiaâ€™s third-biggest producer, have declined 16 percent in the 11 months due to crop damage caused by excessive rains in the nationâ€™s main growing region.
The chart pattern gave notice of this shortfall several days ago when the market bottomed one day after the November 11th reversal swing date. Coffee rallied off the November 11th low, traded above the 20-day MA and formed a bullish TR swing pattern. The TR pattern projects a move to the reaction target line, currently resting at 152.00, on or before the December 14th reversal swing date.Â I was trying to buy a pullback to 141.25 over night, but the low was 142.40.Â The cycle remains bullish and the price projections are strong, so I will raise the buy limit to 142.75