Floyd Upperman & Associates
Daily Evening HOTpage Report
11/09/04
(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.

I am feeling a little better today (Kyle, my 2 year old son is still feeling bad however).

Tonight's activity report shows Crude oil continues lower following our sell on 10/27. Those short picked up an additional profit of $1720 per contract today. Today's move down plus yesterday's brings us to $2240 per contract for the first two days of this week (profit for those still short a remaining 50%). Natural gas was lower today as well and is now down $4830 per contract on the week (following the sell on 10/27). Our daily activity report of course keeps track of the daily gains and losses while our weekly activity report keeps track of the on-going tally (accumulative gains/losses) on the week. This shows exactly how our accounts are impacted since our accounts gain or lose dollars not points!

* It was pretty quiet today overall so I don't have a lot to go over. Lumber continues higher following the recent forward plunger and if you are long on that swing (entered via the plunger price range and using the plunger report stop) I would look to take 50% profits and hold that remaining 50% with a trailing stop. Of course this is a swing trade only (most of us were stopped out of shorts recently and didnt get long on the forward plunger).

We have a weak reverse plunger in the Canadian dollar I am watching right now as well. This is a weekly not a daily.

Yasser Arafat appears to be in critical condition (and may have passed away already). News on his condition is very sketchy and difficult to come by at the moment. Gold as you may have noticed closed up (#5 on the daily activity report) today with energy lower again. I believe the firm tone in gold is due to the uncertainty of the situation regarding Arafat's health condition. However, I believe this is going to result in change even if he does come out of it. In that case the PLO is likely to make plans for the eventual inevitable anyway. The financial situation regarding the PLO is very shadowy as well and I believe this situation brings that to light. The PLO's finances have been controlled largely by Arafat himself and Arafat alone in recent years.

Arafat's passing could usher in a potentially positive future for the Israeli / Palestinian conflict, we'll have to see however. In recent years Arafat really hasn't been negotiating for peace and/or working the roadmap to peace. I feel Arafat basically missed his big chance during the Clinton administration. And since that missed opportunity he really hasn't made any headway at all towards peace with Israel. In fact he's slid back the other way (towards war). He came very close to accepting the terms for a peaceful resolution to the conflict during the Clinton administration via an offer by Israel brokered basically by Clinton himself. This would have resulted in a Palestinian state and Arafat receiving more than 80% of what he wanted for his state. He didnt take that deal however. I think he has regretted that in the years that followed (which is when the conflict seriously took a turn for the worst). Now perhaps new hope can be ushered in by new leadership via the passing of an old era. Let me add one slight issue however (non-issue most likely). We don't know exactly what has happened to Arafat and there was a rumor that he had been poisoned. I hope that's not the case, but if it were to be the case and made public now or shortly after his passing, I believe this could have very negative consequences, and perhaps that's one of the reasons why Gold remains firm. Baring this and any negative outcome (rioting or disputing over where Arafat can and/or will be buried) overall there's a chance that new leadership could bring the two party's back to the negotiating table in a very serious manner.

Stock indices, S&P500 and Russell   - The Russell posted a respectable gain of $1125 per contract today while the S&P finished down $575 per contract on a slight correction (following last week's gains). Overall I am still looking for gains this week!

Tomorrows market:    I am still looking for this market (equities) to go higher overall. Obviously a slightly pause or pull-back at this time is in the cards. Looking forward (further into Q4) however I continue to look for higher prices in equities.

Again be sure to see my comments below regarding LTD (a recent stock recommendation I provided several weeks back). This stock has performed well since I mentioned it.

Coffee (KC) - Last week I said there was a chance in here that this market may try to move higher. It's up $637.50 on the week thus far (it moved up slightly today). The price structure is mildly bullish and above the 18dma (was last week) and of course we are coming off the recent IMPA buy selection too (supportive for higher prices). Thus this market may continue higher this week.

The Russell and the Nasdaq are IMPA buy setups. These markets have been higher with the Russell leading the way. The Russell has been an IMPA buy setup for some time now as has been the Nasdaq. We also 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 the Russell. In addition our detrended oscillator was recently 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!

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 today but still above the 18dma. The uncertainty surrounding Arafat's health remains an issue in my opinion (a big concern). Overall however I still remain bearish but we don't have an entry right now and price is back above the 18dma now thus I am not short at the moment. Longer-term I continue to hold bullion of course but that's another strategy altogether however (part of my diversification strategy).

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 - I am very pleased with LTD's performance over the last several weeks (its gone from a low of roughly $ 21 to a high of roughly $27 since I mentioned it here). The company has increased the price they will pay per share via a corporate buy-back to between $25.25 and $29 a share (up from $21.75 to $25 recently). I view that as bullish too. LTD is also reporting an upcoming dividend ($500 Million) to be distributed to all remaining share-holders after the buy-back is completed. Furthermore the company raised its outlook on 3rd quarter profits this week and is reporting Nov. 18th I believe.

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). We closed $26.60 today, off only slightly following yesterday's sharp gains. I view today's action as bullish as it did not pull back much at all.

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