Remember to use both Selection and Timing in your trading!

Good evening everyone, 

The IMPA data is all up-to-date now.  The data as you know was delayed Friday by the CFTC due to the Veterans day holiday last week.  I had planned to load the data earlier this afternoon today once the CFTC released it but by the time they got to it I was to busy with my daughters birthday party.  We had her birthday party here today.  She is 4 years old today.   Anyway everything is up to date now and we look good to go. 

The latest IMPA selections   
Results based on latest government data! 

UCL/LCL official triggers (buy & sell selections)
* Dates in black indicate a new trigger selection or repeating selection.

FF - The Fed Funds, when listed , is for tracking purposes only.  We do not trade the Fed Funds.


The Markets

We have a couple new and interesting IMPA selections this week.  Silver is back on the active list (IMPA sell selections) and we have BP and CC on the list of IMPA sell selections too which is pretty interesting.   There is an interesting relationship between the British pound (BP) and Cocoa (CC) prices.  Cocoa as most of you likely know has also moved sharply higher in recent sessions.   I'll be watching these two markets in the days and weeks ahead (the net-com in both markets have been down below the LCL recently once before and price reactions did follow as well, thus I am watching these very closely now).  

Remember the IMPA selections are LEADING MEASURES.  Its critical that you include the other pieces of the puzzle before entering into a position.  The other pieces of the puzzle (criteria for a full setup) include elements of our proprietary statistical analysis (SA), indicators from our technical analysis of price (TA) and other supporting factors (pattern formations, seasonal bias and so forth).  Only after everything comes together (all criteria has been satisfied) and everything agrees (price is showing signs or already moving in the appropriate direction) should we enter.  A selection by itself is NOT enough to warrant any action whatsoever.  Please make sure you understand this.  

Energy Markets - These markets have been poised to move lower following the recent plunger patterns and other bearish price formations including detrended over-bought conditions in energy recently.  Several weeks back on 10/27 Crude oil (CL) and Natural Gas (NG) both posted reverse plungers along with outside day down closes.  This was a strong formation by itself.  Last week (Week ending 11/12)  both CL and NG moved lower on the week AGAIN as shorts rack up significant profits now (that's us and could be you if you have been following along).  Crude oil (CL) finished the week down $2260, which follows a decline of $2150 per contract the week before.  That's a profit of $4410 per contract for those short CL following my 10/27 commentary (I noted the bearish formations in my 10/27 written report).  Our automated plunger report provided automated price ranges for entry's and stops as well.  Both Crude and Natural Gas exhibited the same sell formations on 10/27.  Last week Natural Gas (NG) finished the week down another  $7780 per contract!  This follows a decline of $7710 per contract the week before as well.   These last two weeks now represent a profit of $15490.00 per contract in NG (just two weeks following the 10/27 RP sell formations)!  Again as I have discussed,  the 10/27 formations were believed to mark key turning points not only in energy but in equities too.  I was looking for equities to rally following the Nov. 2nd election (as long as the election went smoothly, regardless of who won).  The election of course occurred the subsequent week following the week of marked increased plunger activity (yearly high).  Thus this really indicated some sort of shift (broad shift) was coming.  That shift is clear now, as money flows out of energy and into equity for example.   In addition to the bearish formations in energy we had bullish formations in equities all the way back to early August which supported the shift.  Most recently however (on 10/20, 10/25 and week of 10/27) we had additional bullish plunger formations in equities.  And just recently (right before the most recent run up in price in equities) we had another buy via a FAILED RP formation.   As I have discussed, failed RP formations create buy signals which are often exceptionally strong as well.  We had one in coffee today for example.  I have discussed all of this in detail in past reports.  

FYI - To help all members benefit from the reports and all the documentation online I am adding a special new "SEARCH" feature in the vault which will enable you to type in key words and search through the reports and through the documentation for specific words or phrases.  I think that will also help with the learning process as well.    

Anyway, the decline in NG and CL over these last few weeks should not come as a surprise or a coincidence to anyone who read the 10/27 report.  It was clear on 10/27 that these formations were bearish and significant in energy.  In addition the increase in plunger formations also indicated a potential broader shift in the markets as a whole, and that clearly signaled in my mind and others the beginning of the Q4 rally!  The probabilities for the Q4 rally were high, but nothing is ever 100% guaranteed.  However, I have learned that its always best to work with the probabilities in your favor, and you will come out ahead more often that not. When it doesn't work out for whatever reason we use our logical stop placement for RISK CONTROL. 

Make sure you also take note of the combination RP and outside day down (which I call a "double-whammy" sell) which occurred in both Natural gas and crude oil on 10/27.   And with NG an IMPA sell already existed on 10/27. Thus its not a surprise Natural Gas has declined the most ($15000+ over these last few weeks).

Overall our strategies and indicators have done very well here in anticipating these turns as you can see. 


The 10/27 plunger report worst case selling price for NG and CL - 
I'll leave this here one more week for the purpose of illustration and your review after that you can access it in the archives (old reports).  Again in crude (CL) if you were filled at the worst price (lowest price) from the range of suggested entry prices listed in the daily plunger report you would have sold short crude at 52.44 on Thursday 10/28.   We have since rolled into the Jan contracts now by the way and closed Friday at 47.41.  If you have not taken 50% profits yet, you certainly should do this week in my opinion.   I still recommend you continue to maintain a position (short) as the funds unwind and price comes down using profitable trailing stops now.  I again remain bearish overall. 

In natural gas (NG) if you were filled at the worst price (lowest price) from our range of suggested entry prices listed for the natural gas reverse plunger in our daily plunger report for 10/27, you would have sold short at 8.773 on Thursday 10/28.  We remain in the December contract and closed 7.18 on Friday.  Same thing here, I recommend you take 50% profits if you have not done so yet and I recommend you maintain a position (your remaining 50%) following our standard position management methodology which means using a trailing profitable stop at this point.  And good work of course. 

Today's Forward Plungers in Energy - These formations could provide another round of sell signals if they fail.  If they do not fail in 3 days we could see bounces across the board in energy.   Thus we may be at an important juncture here but overall I don't think we are.  I in fact continue to believe these markets are going to go lower and that the highs for the year are highly likely in place in my opinion.  Thus unless of course something unexpected happens (a terrorist attack) its my opinion these markets are still going lower.  


U.S. equities (S&P500 & Russell Futures) - These markets continued to gain last week following the forward plunger formations in the S&P and ES the week before (on 10/25) and the Forward plunger in the Russell on 10/20.  In addition we had a unique (more rare) follow- up buy signal on 11/3 the day following the election.  This one as I said is often explosive!  And its the SAME one that occurred in coffee today as well (11/15).  Anyway, what is it?  The FAILED reverse plunger buy!   We had reverse plungers in the stock indices on Tuesday (11/2) which failed immediately on 11/3.  This set off another round of buy signals in equities!  For the week here we gained another $8375 per contract in the Russell, $3750 in the S&P and $2500 per contract in the Nasdaq.  Another successful week of gains in equities via the Q4 rally. 

This week: The market is in the midst of a Q4 rally.  That's clear and its genuine.  As you know (those that have been members for awhile know) the Q4 rally's can really surprise people (on the upside). In fact some of the largest advances in the history of equities have occurred during the fourth quarter!   

I remain bullish and I think we will go higher once again this week as well!  We closed up $800 per contract in the S&P to start the week already, and that's only in the S&P.  The real strength (amid the IMPA buy setup) has been in the Russell.  The Russell which is an actual IMPA buy SETUP and has been the leader for weeks.  We had a wonderful "W" buy formation in August which occurred in conjunction with forward plunger formations, double-whammy outside day up closes and a remarkable detrended BUY condition as well.  It really doesn't get much better than this August buy in the Russell.  And since this buy setup (signal or whatever you wish to call it) this market has gained a sizeable amount!  How much?  The Russell has gained more than $50,000 per contract Folks since August!   I hope you really look at this and understand the significance of this setup.  The Russell is an IMPA buy setup, has been, which is statistically significant by itself.  The Russell has outperformed every other index by a wide degree this year and is actually at new all time highs this very minute.  The "W" formation in August was rare and occurred while we had a detrended over-sold condition (indicating another statistical probabilities in our favor) and occurred with forward plunger formations along the "W" formation marking the exact turning point up.  And what happened?  A $50,000+ move between August 2004 and November 15th 2004.  That is the power of these strategies and as you can see it doesn't take long for this knowledge and these methods to pay off (even for big traders $50,000 per contract isn't anything to sneeze at, not in this short of a time-frame members).   The system and our strategies (and data) are clearly powerful.  But that doesn't mean you will succeed or realize any of these kind of gains.  These are just the entry's and the exits.  Position management (in between the entry and exit) is what determines the size of all profits or losses.  And this is precisely why I focus so much of my time and attention on position management in these reports as well. 

Coffee (KC) - I have been bullish coffee for several weeks and have been talking about this in my evening reports as well.  Some of you are long, have been long and will continue to maintain longs.  That's what I recommend.  You should of course have already taken at least one 50% profits however.  Last Thursday I discussed a strategy to get long if you were not long already via a RP failure following last Wednesday's (11/10) RP formation.  That failure had to occur in 3 days.  In other words A RP buy must occur (if its going to occur) within 3 days following the RP formation.  Today (Monday) was the last day (3rd day)!  And today it indeed did fail intra-day (3rd day following the 11/10 RP) which like the 11/3 RP failure in the S&P also set off another round of buy signals in coffee today.  We seen some buying result already and we may still see more tomorrow.  

Coffee had already been trending higher and shot up sharply today gaining $4031 in one session via the 11/10 RP failure!  As indicated in my discussion in coffee (last week) I mentioned that other mechanical systems (including fund systems) are also picking up on these formations (or similar formations).  For now we may pull-back briefly following today's surge higher but overall I still think we can go higher thus I remain bullish.  That said however this is not the time or place to establish a core position in my opinion.  You should already be long coming into today or you could have bought today on a stop via penetration of Wednesday's RP high of 82.10 Dec, which means the equivalent price in the March 2005 since we just rolled as well.  

Lumber (LB)  - This market continues to gain also following the October plungers (shift) which as you may recall Lumber had been in a severe downward trend which following a very successful IMPA sell setup.  We have since exited the short positions and some may be long (but most I believe are just out right now).  We do have a "W" formation in lumber which did complete last week (once the center area was taken out) thus we could go higher in here as lumber again can trend very well.  

Cotton (CT) - I am now watching cotton in here for a potential buy setup folks.  Its already an IMPA buy selection, which covers the fundamentals (via our measure of the NET commercial opinion basically).  No single entity understands the fundamentals better than the commercial producers of cotton and commercial consumers!    Thus the IMPA buy selection tells us fundamentally, the prices are attractive.  Now that does not mean an immediate bottom is at hand and prices must or will rally.  NO!  That's not what it means and that's not how this works.  The IMPA is the first criteria to become triggered for a longer-term buy or sell setup.  We have to put the other pieces of the puzzle together as well (so to speak) before we can see the whole picture.  Price and price structure as well as price behavior is a big part of the picture.  Seasonals are part of the picture.  Statistics are also part of the picture.  Every measurement and indication is important.  The accumulative of all our measurements tell us what our final decision should be (whether we should buy, sell or do nothing).   We do have a potential "W" price formation on our weekly charts already and I am watching this formation closely before turning outright bullish here.   Be sure to review my post on the message board this evening as well answering Ken's question regarding the purchase of call options in cotton amid this IMPA selection (which cotton options are not a bad way to go, but there are key points you want to focus on).  

IMPA Short sell selections and setups
(trending lower)

* The links above are the ONLY place to find OLD Auto-pilot reports (dating back months and years)