Floyd Upperman & Associates
Daily Evening HOTpage Report
10/27/04
(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)

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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. 

Good evening everyone! 

Folks the uptick in plunger activity continues today with 14 new weekly plunger's in formation as of tonight's update (they will be confirmed with Friday's close of course).  Even though they are not confirmed yet, folks this is very noteworthy!  We also had 8 more daily plungers today and 12 outside days as well! These are all indications that a broad (across the board) transition may be underway.  For example,  included in this potential transition may be turning points (highs) in the energy markets.  We may very well have struck important highs in these markets today!  Pay very close attention to this now, in particular I am talking about Crude Oil (CL) and Natural Gas (NG).  Both of these markets posted Reverse Plungers (RP) today on both a daily and weekly basis ladies and gents!   In addition to that they both posted outside days, thus we have the double-whammy (1-2 punch) via the outside day down combination reverse daily plunger as well.  Crude oil (CL) finished under the 18dma to boot!   Now I find that interesting! 

On the opposite end of the spectrum are the stock indices.  On Monday we had Forward Plungers in the S&P500 and ES-MINI.  Since then we have gone up and sharply!  We closed higher on Tuesday (up $4050 per contract in the S&P500) followed by higher prices again today (up another $3325 per contract in the S&P500).  The emini moved up with the S&P of course as well, moving at roughly 1/5 the speed ($50 per point versus $250).   The key point here is that these markets are moving higher following the forward plungers and that's what we expect!   These are very insightful patterns and the market conditions are right. Again as I have said, when we have a high number (14 weekly plungers today and 8 daily plungers for example) its a sign (based on my studies) that something significant is going on.  What might it be?  Crude Oil topping for example and other markets turning as well.

The fact that the S&P500 moved up sharply yesterday with crude oil moving up only a little before today's data and subsequent drop in price was very interesting, particularly with the S&P500 moving higher again today off of Monday's forward plunger.  This action seems to indicate the market might have anticipated this number in crude today (a somewhat bearish figure via the supply).  To me that supports the idea we may be going through a transition in here.  Again energy prices may be topping (perhaps for 2004) or at least flattening out as equity prices begin moving higher as we exit the most feared month for equities of the year (the feared month of October).  You really need to pay attention to this in here folks.  Pay attention to the plungers and the total number of plungers.  Remember this is well above average and we indeed are seeing signs that we may be going through a transition (crude topping and stock indices turning higher via the END of October).  Record your observations in your journals as there may be opportunities all around us right now.   

Click here for today's Daily Plungers (with suggested buy/sell price ranges and stops)

Click here for today's Weekly Plungers (with suggested buy/sell price ranges and stops)

We are receiving news from the West Bank this evening concerning the health of Yasser Arafat.  Mr. Arafat is 75 years old and has been said to be in declining health in recent years.  He is apparently very ill and has been battling several major illnesses in recent years including cancer.  His current condition, while largely unknown, is believed to be worsening at this time.   If Mr. Arafat passes away before appointing a successor it could cause a power struggle inside the PLO and that would likely cause some fear among market participants.  This could result in some short-term selling in equities but longer-term it is not likely to result in any change in direction.  The Palestinians and Israelis' have been locked in a struggle over land for years.  Arafat has been the key and often sole leader of the Palestinian side of the struggle for decades.  This struggle intensified at the turn of the century (turn of the millennium) for many reasons which are to complex to really get into now.  However there were many reasons as to why the struggle intensified, but the core focus has always been about who controls Jerusalem and that's where all talks (between Palestinians and Israeli's) have failed in past and recent negotiations.  Jerusalem is the epicenter of the roots of traditional Jewish, Christian and Muslim religions. 

Again be sure to review the PLUNGER Help (mini manual)! 

Lets get started with the rest of tonight's review!

Stock indices, S&P500 and Russell   - The S&P closed up a respectable $3325 today following gains of $4050 per contract yesterday (Tues).  The total 2-day gain is $7375 per contract. These gains came of course following Monday's daily FP in the S&P500.  That's 2 for 2 now and tomorrow is the 3rd day following this most recent plunger in the S&P500.  The data indicates a most likely response of 1 to 3 days (average) for all daily plunger formations. 

All the indices have now moved above the 18dma.  This includes the S&P500, Russell 2000, Nasdaq-100, Dow Jones and ES-MINI.  All of them are now back above their key 18dma's (following today's gains).  Today's close above the 18dma was the 1st of course in the S&P500 (which I mention because some of you are long following Monday's forward plunger formation).  My recommendation here is to take 50% profits (lock them in) and move your stop to breakeven or better now on the remaining 50%.  


Tomorrows market:    We closed on the high yesterday with a 98% cl%rang (discussed yesterday) and that was a sign the market may move higher again today (still had a positive bias). The cl%rang is basically the "Close as a percent of the day's range" or cl%range.  The actual figures are tracked daily in the daily excel report accessible from the main chart page.  For additional explanation click here.  Can we do it again (3rd day following Monday's forward plunger) ... Maybe, but keep in mind during up-trends Thursday's tend to be weak (the pull-back day after a strong Monday, Tuesday and/or Wed).

Intra-day review in the S&P - Intra-day we had an excellent FADE TRADE BUY via our immediate entry today. Again this follows Monday's forward plunger!  We opened 1109.50 today after closing 1111.50 yesterday. This was a "gap down" open and that setup our FADE TRADE BUY.  We generally look to enter immediately unless some other condition cautions against doing that (in other words as a rule of thumb you want to enter immediately, particularly when we know the faders are working very well, which I have said recently and many of you know right now as well)!   Today's stop was basically the 5-point rule since yesterday's low was 1094.70.  We ended up striking the low for the session (1106.90) about 30 minutes after the open (well within the first 45 minutes which is what we expect and generally require via 10:15am ET confirmation on immediate entry FADE TRADES)!


Lean Hogs - This market closed $150 lower today which puts us down $140 on the week thus far. Yesterday I noted that this market closed well off its high for the day (cl%rang was only 20.63%) thus this indicated the market closed much closer to its low than its high.  In fact, I discussed how the market opened much closer to its high and moved lower for most of the session yesterday.  All of that was bearish of course.  In addition I pointed out that we barely managed to close above the 18dma yesterday!  Today we finished well under the 18dma!  Needless to say I remain bearish for now.  

Soybeans -  This market finally did sell-off today.  However it may still hold the recent low in here and even if that fails I really don't believe it has that much room on the downside (maybe 475 at the lowest in my opinion at this point).  Longer-term or at least looking out into February/March 2005 I am looking for a low and subsequent move higher (and buy).   I am not buying it yet however but within the next several months I may (and plan to issue an official hotpage trade in the spring bean options trade, which will be here before you know it).   That said as well however, its also still possible that the October low will hold as well. We did not take that low out today and in fact we remain above the key 18dma as well!  

Natural Gas - Today's Reverse Plunger on a weekly and daily basis along with the outside day down may mark the turning point here and in other energy markets too (the turn back down).  

Coffee (KC) - This market continues higher following last Wednesday's forward plunger.  We in fact closed up a whopping $787.50 today following gains of $75 yesterday and gains the day before too. In fact if you got long on the recent Forward Plunger you would be up $1050 per contract this week! Once again this is another successful FP with coffee closing higher 3 out of the 3 days immediately following the plunger formation and higher 1 more day as well (today) which resulted in a failed RP that occurred on 10/22 following Wednesday's (10/20) FP.   Lets me try to explain how this works regarding overlapping plungers for those that may be new.   

The RP on 10/22 following last Wednesday's (10/20) FP did NOT void or cause the 10/20 FP to fail in any way whatsoever.  The only way Wednesday's (10/20) FP could fail would be for the market to close under that FP's low.  The FP low on 10/20 was 71.90.  This was the logical stop and the market did NOT come anywhere near it on any of the day's following it thus far!!  In addition,  the Plunger Report suggested a stop of 71.80.  Lets look at every low starting with the 10/20/04 FP low of 71.90. 

Date  Lows  Plungers   Highs   Closes
10/20 71.90    Forward      75.75     74.65
10/21 74.40                         76.05     75.55
10/22 74.50    Reverse      76.60     75.10
10/25 74.80                         76.40     75.60
10/26 75.10                         76.05     75.80
10/27 76.30                         78.90     77.90 

Today's close of 77.90 now exceeds the 10/22 high of 76.60.  This occurred on the 3rd day following the 10/22 RP, thus resulting in a failed RP plunger.  A failed plunger generates another signal in the opposite direction.  Thus a RP that fails causes a buy signal.  A failed plunger only occurs when the high/low is taken out on the close within the 3 days.  Plungers that expire within the 3 day period due to no movement do not generate any other signals.   

As you can also see that the low of 71.90 was never touched and the stop of 71.80 never even came close to being elected. Thus the 10/20 FP never failed and has been completely successful.   


Markets SETUP or setting up for Long positions: 

Markets SETUP or setting up for Short  Positions:


Lumber (LB) -  Closed higher once again today following the forward plunger this week on Monday. The market is up $1859 on the week via Monday's FP.   However, that's not necessarily good for a lot of us because some members are short via the IMPA sell setup.  Lets discuss this further to help those that may be new understand the relative differences between plungers and IMPA setups.    

The main thing to understand here is that Daily Plungers are typically far more shorter-term (duration) than IMPA setups (which are longer-term).  Even weekly plungers are usually shorter-term than IMPA setups.  

A FP here in lumber was expected to lead to a short-term bounce because Lumber has done nothing but declining day after day following the IMPA sell setup. It therefore was becoming OS (over-sold) and that's why I said a bounce was in the cards.  Market's do not go in one direction indefinitely.    They swing inside of larger trends (up and down).  Recently Lumber hasn't done much swinging as you know, all its done is just go down.  Now its swinging up a little and that does not mean the IMPA setup is concluded.  It's most likely profit taking by some of the shorts (some of you may be exiting some of your shorts too).  Overall I remain bearish for now but as I said I also recommend taking some profits in here too if you've been short for this move (recent IMPA sell setup) and have not taken some profits yet (the key here is to take "some" profits, not all, I still recommend keeping a position with the IMPA).

This has  been yet another excellent IMPA sell setup!  

LONG POSITIONS:  

SHORT POSITIONS:  

SPREADS:

Baskets: 

OPTIONS:  

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

Swing trade buys:

Swing trade sells:

Gold (GC) - Well, low and behold this market closed lower AGAIN today and guess what, a couple things to report,  #1  We had a reverse plunger in it Monday!  #2 We had an outside day down today and #3 We now have a weekly reverse plunger in formation too!  All bearish of course.  And finally folks this is also a longer-term IMPA sell selection as well (not fully setup yet however).  In this case however some members used the RP on Monday as a "Spring" to enter the IMPA sell setup.  That technique is discussed in detail in the 2003 workshop video (12 hour long workshop video).  You are welcome to purchase that video right now if you want it on DVD!   Right now I will do the SAME price as the VHS but only until Nov. 7th 2004.  After that its extra for the DVD's as it cost me extra to have them produced.  If you want the VHS copy I will do that for $100 off until November 7th too (special).  This is your opportunity to purchase this excellent 12 hour educational video (the entire 2003 Summer workshop which is the official follow-up to the 1999 workshop video) either on DVD for the same normal VHS price or on VHS for $100 off the normal price!  Click here to securely order the 2003 Workshop on DVD or VHS! 

Today this market provided another $200 in profit if you went short.  On Monday I said that I felt this represented a decent short-term opportunity for a swing trade sell in Gold.  Its also a potential longer-term opportunity too via the early entry (via the plunger spring on an IMPA selection).  Note however that we have yet to close under the 18dma (which means the IMPA is not officially setup yet). The plunger report suggested an entry between 429.70 and 430.95 using a 432.20 stop on a closing basis.   We got high enough to trigger an entry on the low end of that range and of course the suggested stop has not been triggered and the market gained another $200 today for the shorts (following gains of roughly $247 yesterday).  Not bad folks, not bad. You can take some profits in it if you like but I do recommend you continue to hold a portion short as well.  

ALL Stops:
ALL STOPS on all positions are now STOP-CLOSE-ONLY and have been since I updated our procedure last year.  I will discuss this in detail at the workshop.  The new stop-close-only stop method is far superior than our older "resting stop" method.  It really makes a big difference!  We are currently working on new documentation that will list and describe this and other enhancements and improvements in our methodologies.   Remember I am always striving to make things better!  :)

If our stop is penetrated on the close (after we have already entered) we would then exit on the open (within the first 15 min of trade) of the next day session!  We manage our positions (stops) this way in options and spreads because they trade to thinly for resting stop orders.  If stopped out, we want to be out the next morning (next day-session) and within the first 15 minutes (max).  

Stocks & Mutual Funds: 

Turning bullish some of the Techs.  Two I am interested in right here are QQQ and QCOM.  

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! 

Very Respectfully,
Floyd

 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. 

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.

"Seldom does an individual exceed his own expectations." 

"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