Floyd Upperman & Associates
Daily Evening HOTpage Report
11/10/04
(ALERT! Due to a flaw in the software, the above date stamp may be reported incorrectly in older
reports (pre 2000). The actual date of the report always corresponds to the file-date-name
displayed on the report page which you click on to pull up the report)

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. The information provided herein are the opinions of the author. While every effort is made to ensure the integrity and accuracy of the data, no promises or guarantees are made.

"It is more likely the truth will be discovered by few than by many"
Rene Descartes

"Advances are made by answering questions.
Discoveries are made by questioning answers."
Bernard Haisch

From the Desk of Floyd W. Upperman Jr.
My new email address is floyd@upperman.com.

The energy markets bounced today with unleaded gas bouncing the most (up $2557) today. All of them (CL, HO, HU, NG) remain under the 18dma! Thus this is only a bounce in my opinion at this point. NG is also an IMPA sell setup. Today's close in crude oil (CL) included a daily FP.

The Fed raised the Fed Funds rate today by the expected 1/4 of a point. The S&P responded with a typical "whipsaw", which is very common on the Fed Day's. TY and US finished lower on the session.

Tomorrow is Veterans Day - My respect to ALL of you Vets out there. Thank you. Some markets will be closed tomorrow, primarily the interest rate markets.

Stock indices, S&P500 and Russell - The Russell posted another respectable gain today, this time $2000. This follows yesterday's gains of $1125 per contract. The S&P500 on the other hand only managed a gain of $150 per contract on the session. And that is after having been up substantially earlier in the session. This action was observed across several markets as well and is noted by the number of plungers today (8 daily and 8 weekly). Currencies had some of the most interesting plunger formations today (daily and weekly formations). The dollar (DX) for example posted a forward plunger while the Yen, SF, and FX posted daily reverse plungers.

The Fed of course followed through with the expected rate hike today, raising the Fed Funds another 1/4 point as was widely anticipated by market participants.

Tomorrows market: If we are going to pull-back in this Russell, tomorrow is the day to do it (statistically speaking). Our technicals show the Russell 2000 has only been closing up 42% of the time on Thursday's (over the past 161 trading days). This means its been closing lower 58% of the time on Thursday's. The daily technicals also show the average size loss on a Thursday (in the Russell) is 6.04 points (at $500 a point that's $3020). We closed up $2000 today, and that's pretty close to the statistical 161-day average of +5.17 points higher ($2585) for a Wednesday

What is also noteworthy is that Thursday's 42% statistic is substantially lower than the next weakest day which is Monday. Monday's have been closing higher 50% of the time over the past 161 trading days. The strongest day has been Tuesday's where the Russell has been closing up 63% of the time over the past 161 trading days.

The daily technicals (day of week seasonal studies) are available in each market. You can access this data by scrolling under the daily price chart. The technicals are located directly under the daily price chart (click on the commodity name for the daily price chart).

The day of week bias is broken down into two segments in the technicals (click on link for summary above). First (to the far left) is the 5-year analysis. The TREND is the 161 day analysis. I call this the trend because this is the current "trend" in the data. When using this data for swing trading I look for the 5 year analysis to match with the trend. In other words, if Thursday's are shown to be exceptionally weak in both the 5 year data and 161 day trend that improves the chances that a sell signal on a Thursday will work out. And that's one of the ways I use this day of week seasonal data.

The 161 day analysis represents the optimum number of trading days for our short-term studies. All of our daily studies, indicators and daily price graphs are based on the 161 day period. Using 161 trading days ensures we will always have at least 30 Monday's, 30 Tuesday's, 30 Wednesday's, 30 Thursday's and 30 Friday's (during any 161 day slice dating back through the seventies regardless of holiday's). A general rule in statistics is that you always need a minimum of 30 data samples for all experiments.

Overall I am still looking for equities to go higher but we may pull-back tomorrow in the Russell as discussed tomorrow. Obviously a slight pause or pull-back at this time (this week or next) is still the cards, although I want to make it clear that I remain firmly bullish.

Coffee (KC) - Higher again today by $506.75. Again last week I said there was a chance in here that this market may try to move higher. It was "tilted" up on our charts. Coffee (KC) is now up $1143.75 per contract on the week. The price structure is increasingly bullish and above the 18dma (was last week). We are also coming off a recent IMPA buy selection too (supportive for higher prices as well). This market may continue moving higher from the time being. That all said however, I recommend you take 50% profits if you have been long in here as we must take note of today's reverse plunger in coffee as well. Move your stop up to breakeven or better on your remaining 50%.

The Russell and the Nasdaq are IMPA buy setups. These two markets have been moving up with the Russell leading the way higher. The Russell has been an IMPA buy setup for some time now. We had an excellent "W" buy formation in conjunction with a FP outside day up combination (1-2 double-whammy buy) several weeks ago (the "W" occurred in August). In addition we had the detrended oscillator triggered for a BUY too. Again all of this was setup during the month of August! Check it out if you have not done that yet. In the S&P500 we had an excellent FP on October 25th and then we had a failed RP this week which created another buy!

Japanese Yen - Today's reverse plunger (RP) in this market may mark the beginning of the end of the recent move higher. This market is an IMPA sell selection and we did close under the 18dma today for the first time since the "W" buy formation at the end of September beginning of October. The dollar (DX), which tends to move in the opposite direction, also reversed course today, turning up and closing higher amid an outside day up forward plunger (double-whammy). I think that's good for a one to three day (typical) response at minimum. However, we certainly could get more as both of these markets are also IMPA selections. The plungers provide us with decent logical stops for early entry's into either of these markets (long the dollar or short the yen).

Swing Trades (For Advanced Traders)
- Swing Approach "A" - The standard trend approach. My favorite.
- Swing Approach "B" - The standard counter-trend approach.

Gold (GC) - Down slightly again today, off $170 amid an outside day down. The closing price remains above the 18dma. Again as well, the uncertainty surrounding Arafat's health remains an issue (a concern for the market). Overall I remain bearish at this time but we still don't have an entry right now and price is back above the 18dma now thus I am not short at the moment either. Longer-term I continue to hold bullion of course but that's another strategy altogether however (part of my diversification strategy). Short-term I am looking for Gold prices to decline briefly.

ALL Stops:
ALL STOPS on all positions are now STOP-CLOSE-ONLY and have been since I officially updated our procedures in 2001 and 2002. I discuss this in detail in the June 2003 workshop video which I highly recommend to all serious traders using these strategies. To order the DVD version on special for a few more days click here. The new stop-close-only stop method is far superior than our original "resting stop" method. It makes a big difference!

Stop close only manual order. You do not have to place the order as "Stop close only" in order to use the closing price for your stop. What I recommend is that you simply wait until the close to evaluate your stop. If y our stop is exceeded on the close (based on the official closing price as reports on our graphs) then we simply exit on the open of the next day session (within the first 15 min of trade)! We have always managed our positions (stops) this way in options and spreads because they trade to thinly for intra-day resting stop orders. Now all positions should be managed this way. Again, if stopped out, you want to be out the next morning (next day-session) and within the first 15 minutes.

I remain bullish some stocks which are QQQ, QCOM and LTD (the Limited is based in Ohio).

FYI - If you did buy LTD recently, if your brokerage firm contacts you with an offer to buy them back for as much as $29 a share, for now I recommend holding onto them. I believe this stock is on its way to $30 and higher. I believe this is a decent longer-term buy and hold (probably will do very well over the next 5+ years provided there are no huge negative disasters). If you want to take profits I recommend it at $30 or higher (initial profits if long in here from $22 to 25).

Be sure to visit the discussion board daily! I am there daily answering questions and assisting members (with position trades and day trades). My presence on the message board overlaps my reporting here this even if you cannot visit the board during the day, you can visit in the evening! You don't have to post a thing as well. You can simply review all the posts that took place during the day (something I recommend). Some days are more active that others of course. I recommend checking in with the board daily!

Our new Stock Market Research Site address is:
This is new and under development
www.equitiesresearch.org

Position Management and Money Management Portion of the System - Remember never to risk more than 10% of your risk capital on any one single trade. We must never adjust the stop to accommodate the 10% risk. The stop needs to be placed strategically based on the market, and the market alone, not what you can afford to lose. I can't stress the importance of this enough. Once the stop point is determined, the risk can be calculated. If the risk is to large, pass on the trade and wait for a lower risk trade.

Our two important Rules: Control risks & manage profits!
Click here for Risk Matrix Click here for 50% rule.

Special backup site - The backup site provides a second source for our charts and graphs as a back up when/if something goes wrong with the main site or main computer driving the data to the main site. The address to the backup site is http://www.cotdata.com. Your discussion board username and password combination is required for access - If you do not have discussion board access, email Floyd for a special username / password combination for the backup site.

* The hotpage does not trade all the setups, only certain ones are taken and they are all for teaching purposes, so I can demonstrate to you (live) how to trade using our system, methods, rules and data. My goal is to teach you how to trade using our strategies, not to trade for you.

"Shun passion, fold the hands of thrift. Sit still, and Truth is near: Suddenly it will uplift your eyelids to the sphere: Wait a little, you shall see the portraiture of things to be."
Ralph Waldo Emerson

"When it comes to success in trading, being right most of the time is not nearly as important as is being procedurally right all of the time! "
Floyd W. Upperman Jr. CTA