Swing Trading and Market Timing Knowledgebase

By: John Crane, swing trading guru

Market Timing Cocoa

Figure # 2.21 - A soon as the September Cocoa confirmed a Reaction swing, with a pivot high on June 16 (C) followed by a pivot low on June 20 (D), it was time to do the reverse/forward count. The count from the high close at (C), back to the low at (A) equaled 14 days. (The futures market was closed for Memorial Day and left a gap on the chart right in the center of the pivot low. Both the day before and the day after the holiday closed at the same price, 1,489, therefore, I will count the gap day as the low for the reversal count.) Projecting forward, 14 days from the low of the futures market timing Reaction Swing indicated a future swing trade date due on July 10.

Four days after posting the low at (D) Cocoa traded above the previous pivot high at 1,555 – the beginning of the futures market timing Reaction Swing – and triggered a buy signal at 1560. During the following 10 trading days, Cocoa rallied to a high of 1,737. The high was reached on the projected swing trade date of July 10! Six days later, Cocoa was traded below 1,500; that’s a 182-point rally into the swing trade date followed by a 237-point collapse after the swing trade date.

cocoa chart1
Figure # 2.21 – September 2006 Cocoa

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**THE RISK OF LOSS IN TRADING CAN BE SUBSTANTIAL. YOU SHOULD, THEREFORE, CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER OR OVER-COMPENSATED FOR THE IMPACT IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT.NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES.