Daily Evening HOTpage Report
March 6th 1999
*

Please remember that commodity trading is risky and past performance 
in no guarantee of future results.  There are no promises or guarantees made in
this report whatsoever.  In addition,  futures trading is not suitable for everyone.   

Good evening everyone,

Well it is late Friday evening and I am still up working on my analysis for next
week.   I want to get this report out tonight so that you will be able to use it
in conjunction with your own analysis over the weekend.  Please hold your
email off if you can Saturday, I'll be out of town this weekend and I won't be able
to answer any email questions until late Sunday night and early Monday morning.  
I have put together a very detailed report for everyone to review over the weekend.
As I mentioned in my email Friday, I believe this is a critical time to be focused on
the commodity markets.  This goes for the S&P and stock market as well.   We are
making history once again in the stock market with Friday's huge gains in the Dow.  
Folks, 10000 in the DOW is now only 264 points away!   This can easily be hit next
week, possibly as early as Monday, March 8th 1999.  We are that close to this major
historic milestone.   Today was an important day in the Dow because we broke
out of the range we have been in since January. We are now starting to form a
new distribution actually above 9600.   Keep in mind however that we have not
broke out of the 1200-1300 range in the S&P yet.  This is what I call temporary
"fragmentation".  We need to see the S&P follow through and begin to breakout
and form a new distribution as well.  This really needs to happen right away, (Monday)
or we are in jeopardy of falling back into the old distribution.   Lets take a look at
my Spitfire graphs for the Dow now so you can see these distributions for yourself.

* Next week is going to be a very interesting week in the stock market,
and other markets as well. 

New Video forthcoming!
Focusing on:
#1 Order placement
#2 Spreads
#3 Options on futures
#4 Pyramiding positions and HOT markets of 1999.

You need to let Kim know ASAP if you want to reserve a copy of this
video. Click here to Email Kim   We anticipate the video to be
available in March 1999.


CURRENT SHORT POSITIONS:

* You may still be short the yen in here.  If you are not short, now is certainly
not the most favorable level to be establishing a core short position.
I would not be surprised to see this market bounce in here now.   I would
tighten stops up significantly if still short and be ready to wrap up the remaining
profits.  Of course you already should have taken your 50% profits.  For
next week, I'd recommend we just hold off on establishing any new shorts
in the Yen until we get the COT data out the following Friday.  The commercials
did cover quite a few shorts on this last report and they are no longer excessively
bearish.  Therefore, we want to be careful in here now.   This is a mature trend.

* The Aussie dollar remains setup per our system.  I don't see any reason to
come out of this market yet.  I'd stay short with stops up around the 6400.  You
should have locked in a 50% profit as we discussed, but other than that you
want to stay right in here and work this market from the short side.  Now we
are rolling out of the March and into the June.  You want to be doing that
on Monday.  

* The Canadian dollar remains a short sell and is setup to move lower.  This
has been a good position and some of you have been short now for a few
weeks (since the divergence).   You may have already locked in a 50%
profit.  You also may not be short yet.  If you are not short, you can get
short now on a rally back to the 6650 and stops are going to be 6700
now.  This is of course in the June contract now since we will be rolling
Monday.  By the way, if you wanted to see where the June prices are you
can do this, you have access to this information now in our intra-market
spread graph.  All you need to do is click on the "S" under the commodity
time and this will bring up the latest spread graph (spread between current
lead month and next one out.  In the case of the Canadian dollar, this is the
March & June).   Lets take a look together here folks.


Again, these are easily accessed by simply clicking on the "S" under the commodity name
on the daily chart page.  I'd like to see members using this data more often.   These are very
helpful in spotting bullish and bearish conditions, and  spreading opportunities which reduce
margins and reduce risk as well (some of the best trading opportunities are spreads).   You
can also use these graphs to monitor the price of the next month out, especially useful as we
near a roll data.  These are updated each day  with all the daily prices.   .

Silver remains setup to move lower, but here also I would prefer to wait now for a rally to
sell short this market once again.   If we can get a rally up in the 550 area, and if that is
accompanied by RSI divergence, I'd be very interested in being a seller in here once again. 
This is something each of you need to be focusing on.  Execution without hesitation is
something that you must master.  It takes time and confidence.  You'll get that with experience. 

NEW SHORT POSITIONS TO INITIATE:


CURRENT LONG POSITIONS:

Markets officially setup for buys:

1 - British Pound.  (Need strength) - Clearly, we need more strength here.
We are starting to see the RSI firm up and even starting to divergence ever
so slightly now.  But we must wait for this train to pull up into the station and
stop, blow its whistle and begin moving in our direction.  When you hear that
whistle blow (close over the 18 DMA), grab your bag and get ready to climb aboard.

2 - Cotton has just done very well for us this week.   Many  of you have sent me
email indicating you are long, and have been long for some time.  This market
is likely going to continue moving  higher.  Friday's action was certainly bullish.
Everything is setup in this market, but you should already be long.  Stops
now need to be back around the 57-59 area, somewhere in that zone.  If you
have profits exceeding the margin, many of you probably do, I'd go ahead now
and pick a target to lock in your 50% profit.  Of course just let the other 50%
run with trailing stops per our methods.  The trailing stop method will earn
you the most return let me tell you, some of you are still short the Japanese
Yen using trailing stops.   That has been a very good market for us.

2 - Coffee (High risk traders only!) - Stops tight now around 98-100.    The Whistle
has already blown here and this train is moving.    We did close back over the
18 DMA on Friday and that is bullish.  Especially when you see this on a Friday.
I like to see a market close strong on a Friday.  That is a slight bullish indication.

Keep in mind this is coffee and it is one of these wild markets that require larger
stops and thus more risk capital.  By the way, when I say we should not risk more
than 10% of our risk capital on any one single position, I don't mean that we should
push this to the max each time we trade.  The 10% Max rule means 10% is the maximum
you should ever risk.  Rarely should you be pushing your trades to the max in
terms of risk, especially when you are just starting out and learning.  Your #1 priority
should be to preserve capital and control risk.  Ideally I like to keep my exposure below
10%, even below 5%.  Using spreads this can often be accomplished.  Those of you with
smaller accounts can reduce exposure to risks considerably by using the smaller MIDAM
contracts traded on the Mid American commodity Exchange.  These contracts will reduce
risk, as well as reward potential however, therefore discretion is needed.    Also keep in
mind that there are times when it is appropriate to use your risk capital and it is acceptable
to press the risk to the maximum 10%.  Knowing when to risk and when to avoid risk
is at the heard of the art of trading.  This is something which is developed based on your
own intuitive skills, personal discretion and most certainly,  experience.

3 - Unleaded gas - Commercials excessive. You should already be long now.
This market has had a very decent trend-reversal over the past several trading sessions. 
I'd like to see how this market digests these gains next week. We now have evidence of the
new trend on our weekly charts.  Those of you who are new, you want to use these charts to
detect, measure and monitor the intermediate to longer term trends.   We use a 4 week moving
average and 9 week moving average on the weekly charts.  These charts can be accessed
by clicking on the "W" under the commodity name.  The great thing about our weekly charts
is that I keep them updated DAILY.  Each day, I update the weekly charts right along with the
daily charts.  Of course you don't need to be monitoring all of the weekly charts each day,
but they are useful and having them available and up-to-date does often come in handy.
Lets take a look at the weekly unleaded gas chart.




4 - Natural Gas - Setting up for a buy.   Lets take a look at this entire setup. 
We will start with the COT data and then go to the daily price chart.


Now lets look at the daily chart:


And finally lets take a look at our weekly chart for natural gas:

HOTpage OFFICIAL EXAMPLE TRADE:


SPREADS:

I have two very interesting spreads currently on the books right now.
One is Long unleaded gas and short Heating oil (This is a 1:1 spread, in
other words, for each long position in unleaded, an equal number of short
positions should be established in heating oil).  This of course can be tracked
and position on our spread page.  We have our custom inter-market spread graphs
there. 

The second spread which did very well on Friday is Long Chicago Wheat and
short Soybeans.  

OPTIONS:


Swing Trades (For Advanced Traders)
I like T-bonds in here from the long side if and only if we open weaker Monday and turn
stronger towards the end of the day.  I am basically looking for this market to move higher
in here.  I believe the selling is just about dried up for the time being, but we may have
one more sharp sell off left to go.  If we get a sharp sell off anytime early next week and then
a reversal intra-day, you really want to be in there buying these things (almost with both hands)
You can be buying call options now if you are a options player.  But as far as the futures
go, I wan to see that capitulation and intra-day reversal.  This market can turn on a dime
and if we see capitulation that is a very strong buy signal for this market.   I'll leave this up to
the swing traders.  For position traders, we have the right conditions in the Ten year note
market for a buy once we bottom in t-bonds.  I believe you could use the same method
to buy in that market.

SPECIAL S&P COMMENTARY:  10/29/03  


STOCK INDEXES: Probably going to move higher short term.  We talked about these
already in this report.  Monday is going to be very interesting.  I know I've been saying
that a lot lately, but look at the market we had Friday!  We knew that Thursday's activity
and Friday's employment report could be very interesting.  And indeed it was.

[SP] S&P - I don't have any low risk buy signals folks.  Its kind of risky in here right
now.  This thing could flip right back around if we can't get the S&P and NASDAQ
to follow the breakout in the Dow.  As we discussed, the Dow is breaking out now
and forming a new distribution above 9600.  But the Dow is only 30 stocks folks.
We need to see this market come together if this breakout is going to be a sustained
move followed by higher prices.  I am not convinced the entire market is ready to
blast off again, yet.  The NASDAQ and S&P need to play catch up first.

Current High Risk Positions:  Nothing