Floyd Upperman & Associates
Daily Evening HOTpage Report
11/04/04
(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 stock market shot up another 177 points today (in the Dow Industrial Avg.). The Q4 rally appears to be well underway! Tomorrow's numbers could set the stage for more highs next week or it could present a stumbling block. Unless the data is excessively bearish (less than 100k) I am looking for the Q4 rally to continue (as anticipated).

Friday's employment Report Forecast:

Nonfarm payrolls Consensus Forecast for Oct 2004 are 160,000.
The Range is 85,000 to 225,000.
* 180k and higher will be supportive for the market in my opinion.

Yesterday we discussed the bearish situation in the energy markets. I have been talking about the likelihood that these markets reached top's since my October 27th report (the very day they topped). That's the day we had that slew of reverse plungers in the energies (across the board in energy). We also had a slew of forward plungers in the stock indices. This along with other supporting factors (detrended studies) and even the IMPA itself all indicated we were near at least short-term stops in energy and likely turning points (up) in equities. And since this time the stock market has gone up and the energy markets have gone down! That's precisely what our data indicated was most likely to occur, and it has occurred! Now, if you take this week alone (look at our weekly activity report for example) you'll see the equities (Russell, S&P, Dow and Nasdaq) have gained sharply on the week. The weekly activity report shows the Russell and S&P alone have gained $15950 per single contract on the week thus far. These markets had an extremely HIGH probability to rally THIS WEEK! And that's what I was pointing out LAST week (the week of October 25th) amid the SLEW of plungers that were occurring throughout that week. In addition of course the Russell 2000 is an IMPA buy setup as is the Nasdaq too. On Monday October 25th we had a FORWARD PLUNGER in the S&P500 and ES-MINI. That simply got the week started. Throughout the week the plungers were very active. From experience I and many of you know that this is a sign that the markets are likely about to go through a shift (reversing the trends). The focus was on energy and stock indices as this is where the plungers activity was heaviest. The reverse plungers in the Energy's along with the bearish IMPA (Natural Gas) were indicating these markets had a high probability of topping (at least short-term) which indeed they have. The forward plungers in equities along with the bullish IMPA indicated the indices would rally (and indeed they have)! Lets look at the energy market data now.

For the week Crude oil (CL) is down $2.94 for gains of $2940 (if short) and NG is down $5260 (net change for the week). Why be short? Last week these had reverse plungers (See your October 27th daily and weekly plunger reports). On October 27th we had a total of 14 weekly plungers in formation (an extremely large number). How large is that? Only a few times a year do we have that many weekly plungers in formation at one time! Crude oil (CL) and Natural Gas (NG) were reverse plungers.

I am going to leave yesterday's detrended graph for NG (bearish OB) up tonight as Natural gas closed down a whopping $5530 today ladies and gents! We just talked about the bearish readings in NG yesterday. Our strategies are relaying accurate information back to us, its up to each of us as traders (pilots of our own trading accounts) to use this information to our benefit. If you are new don't worry if this doesn't make total sense yet, go to the message board and ask questions. Other senior members will chime in to help you and so will I! Take your time and understand this takes time to learn and time to master. Don't rush it!

Keep in mind we also have these studies (graphs) derived from our weekly price graphs too (derived from the weekly data). Thus we have both weekly detrended oscillators and daily detrended oscillators. The one above is associated with the daily data and thus directly under the daily trend/swing graph. These are used for both swing trading and IMPA position trading.

Stock indices, S&P500 and Russell - These markets continued higher following the recent forward plunger formations (couple weeks ago) and in conjunction with yesterday's failed RP (we closed above yesterday's high in the RL, ES, DJ and SP) yesterday and as I said in last night's report this resulted in another buy signal!!

Overall I remain bullish via the potential for a Q4 rally as we have discussed for weeks now. This appears to be off to a good start thus far as we have discussed. However, let me continue to make something very clear - Friday's EMPLOYMENT DATA will be very important! Furthermore the close on Friday will also be very important for this market as we head deeper into November. Again both September and October were relatively mild months (traditionally these two months have seen some of the largest monthly declines in equities).

Tomorrows market: The election is behind us now and the market gave us a signal of approval today. In addition yesterday's closes above Tuesday's highs created the additional technical buy signal (via the fail RP's). We have the employment data for October out tomorrow morning. Overall I remain bullish but this data will be crucial!

Coffee (KC) - Yesterday I said there was a chance in here that this market may try to move higher again today. It did, it moved up $281.25 today. The market is back above the 18dma now and we are coming off a recent IMPA buy selection. It may continue higher for now.

The Russell and the Nasdaq are IMPA buy setups. These markets have been moving up already with the Russell leading the way higher. The Russell has been an IMPA buy setup for some time now and again we had an excellent "W" buy formation in conjunction with a FP outside day up combination (1-2 double-whammy buy). In addition we had the detrended oscillator triggered for a BUY too. 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!

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

Gold (GC) - Higher today perhaps partly on the uncertainty surrounding Arafat's health I don't know. Overall however I still remain bearish but we don't have an entry right now and price is back above the 18dma now. Today's close is the 2nd day in a row above the 18dma (hence note the color change to blue on our daily trend/swing graph).

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 for now. These are QQQ, QCOM and LTD (the Limited is based in Ohio). LTD did very well today and I am pleased with its performance over the last several weeks (its gone from roughly 21 to $25 since we began talking about it). We may be breaking out to a new high in it before long.

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