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Released On: May 12 2008
Dear Fellow Trader,
It's all about Crude Oil, everyone's talking about it, some are saying we're heading for $US200 a barrel.
Well let's take a serious and sober took at it as we kick-off this edition of the www.traderiskmanagement.com ALERTS Newsletter because it also illustrates an important lesson in regard to using the TRM charts to maximum advantage.
So if you're serious about market analysis and about making money in the markets you won't want to miss this!
I'm also going to show you how to make the most out of the Gold market, as in when to go 'panning' for it, and then I'm going to tell you about an opportunity that may be opening up in Cotton.
So read on!
 
Crude Oil:In last week's ALERTS Newsletter I wrote: "... the Sigma Bands are showing some signs of weakening momentum. However, this weakening momentum is not being confirmed by the Cyclical Decomposition chart. I wouldn't be at all surprised to see Crude Oil rally again this week."
As we know Crude Oil did indeed rally this week to new historic highs. Furthermore, I am not seeing any real signs of momentum weakening. I wrote these words last week to illustrate a point. When we see signs of something being overbought, or oversold, it is still very important that the Cyclical Decomposition charts confirm the conclusions drawn from the Sigma Bands chart.
Last week the Sigma Bands were showing some signs of weakening momentum. But, importantly, the Cyclical Decomposition chart was not confirming this.
What this says is that the ODDS for success were not as high as we would like.
- Remember, with Sigma Bands its all about the odds.
- Remember, the whole point of TRM is about showing you where and when risk is lowest.
Now this week we may see Crude undergo some short term profit taking.
But I suspect that will be all it is.
It really does appear that Crude may be trending up some more. Our updated Crude Oil charts are at:
Sigma Bands
Trading Signals
Signal Bands
Cyclical Decompositions
Curvilinear Envelopes
Gold:
Now let's see what the TRM charts are telling us about Gold. Our updated Gold futures charts are at:
Sigma Bands
Trading Signals
Signal Bands
Cyclical Decompositions
Curvilinear Envelopes
As we can see from the Signal Bands Gold did rally a bit this past week. However, the Signal Bands are now indicating a possible retesting of the previous low.
I suspect Gold is close to a botton, but typically commodity prices do not simply form a 'V' formation at the bottom. It's typically more like a 'W' formation with a double, or even a triple bottom.
So let's keep watching Gold. I suspect 'there's Gold in them thar hills'. We simply have to wait for the TRM charts to show us the proper time to 'go panning' for the precious yellow.
Cotton: Our Cotton charts are at:
Sigma Bands
Trading Signals
Signal Bands
Cyclical Decompositions
Curvilinear Envelopes
Cotton recently went through a major 'blowout' to the upside, but prices have been stabilizing.
We are getting mixed signals in Cotton, but overall it appears Cotton may retest its previous low before rallying. If it does then we may be able to buy Cotton at a lower price before it rallies back up to the solid neutral trendline.
So let's watch Cotton this week.
Remember, TRM will 'flag' a market move before the other so-called forecasting outfits.
How come?
Because I've discovered a way to do it and spent more than 30 years developing and perfecting my work!
Now all you have to do is take advantage of it. All in all, a pretty darned good deal you would have to say.
That's all for now. Have a good week.
Best Regards,
James
Maggio
Trade Risk Management
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