Floyd Upperman & Associates
Daily Evening HOTpage Report
07/16/03
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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! 

The new email address is floyd@upperman.com  Its online now.  

7/16/03

FYI - It appears we have a large number of daily plunger formations (greater than 12).  Be sure and take note of that this evening.  Most of them are forward plunger formations.  Increases in plunger activity tend to occur when the entire market-place is going through a transition (often around stock market tops and bottoms).  We also have some weekly plungers "in formation".  With weekly plungers remember the following - 
#1 weekly plungers tend to be more longer-term (1 to 3 week moves instead of 1 to 3 day moves).  Use the weekly price graphs for these.   Stops must be based on the weekly plunger highs and lows as well.  In addition, use the weekly moving averages (4wma and 9wma) on the weekly charts for trend reference.  These moving averages are more longer-term corresponding best to the 20dma and 45dma (the 45dma being one of the more popular moving averages tracked by the funds).   
#2 weekly plungers do not complete (not officially) until Friday's close.  Weekly plungers that form mid-week are "in formation" and thus not complete.  This can be compared to the intra-day data that makes up a daily plunger (by the end of day).   You won't know whether or not it actually holds until the close (end of day).  Same with weekly plungers except the scale is daily data (not intra-day).  We must wait until Friday's close before we can confirm the formation on the weekly plungers. 

HOTpage Trade:

September BP - The hotpage is short from 165.50 as you know.  We took 50% profits at 163.32 for a profit of $1362.50 per contract.  We have been holding our remaining 50% using a stop of 165.00 stop close only.  We closed 158.52 yesterday, which was only one spot from the bottom of our activity report.  On the top of our report was DX (which we are bullish).  Lets review our recent daily price graph for the British Pound, along with our entry,  50% profit and recent closing price. 

Just for review (as I often like to do to assist new members) I've included a snap-shot of the actual daily price graph (our proprietary daily price graph) for the BP on the day of our entry (July 1st).  I placed the HOTpage entry instructions in my June 30th report (the day before our entry).  Folks this trade was so well setup that I placed this chart in my report with all my markings on July 1st,  before this large move down unfolded.  Why?  Because everything we look for was neatly in place.  It was ideal also because I needed to demonstrate the strategies in real-time with a real trade to reinforce what we had just finished discussing for 12 hours at the June workshop. 

Note the speed of the decline in relation to the incline.  Refer back to manual #1 where I noted markets tend to drop faster (on average) than they rise (roughly some 67% faster on average).  

On Going Position Management of short September British Pound position
Entry:  Sold short at 165.50 on July 1st 2003
Position Management:  Bought X1 (50%) at 163.32 on July 8th 2003
 Continuing to manage the remaining 50% on July 16th 2003 

We closed roughly 158.96 today (7/16) up roughly 44 points but when compared to the recent drop of roughly 700 points, this isn't much to sneeze at in my opinion.  At some point we must bounce folks and if this is what the bounces amount to, its likely we still have more room to go on the downside. Because of that I wan to continue managing this very professionally, allowing for the right size stop to enable us to reach a maximum return (profit) for our work in this business transaction.  Lets move our stop to 164.20 stop close only (above the 18dma).   This locks in further profit while allowing us to maintain our position with a reasonable stop (on the remaining 50%).  This begins the phase of tightening up the stops which I spoke about earlier in the week.  

S&P and Stock Market -  We had a great run of roughly (28-29%+) from March 2003 when our IMPA suddenly shifted up and was bullish across the board in stocks (with the official IMPA buy setups in the Nasdaq and Russell).  Now most recently the IMPA has changed significantly  as has my outlook on the market which I have been quite clear about.  We also had a very obvious (3 minute decision) setup via Monday's reverse plungers across the board in our stock indices.  That of course was a bearish indication and as plungers go, we are getting the expected 1 to 3 day reaction (down).  This is real basic text book (Upperman) statistics and expectations based on historical performance and on the data.  You hear me talk about the data frequently, that's because there's nothing more important than the data.  I do not listen to reporters and I do not follow analysts.  I do track the news but I track it largely for fading purposes and/or to gauge a crowd reaction.  What will they do today is the sort of question I must ask myself each morning when I sit down to session in the S&P. 

S&P forecast - Lower.  Monday's reverse plungers (across the board in stocks) have yielded nice profits for those short the any of the indices (I call it - Swinging on the plunge).  Stay with it if short as some of you are and continue to use our position management methods. I believe we may be topping now (but that does not mean this market will go straight down from here).  We may bounce up once or twice more before this thing turns the corner completely. 

There's also a good bit going on right now in other related markets.  Just last week I discussed seeing signs (subtle) of inflation creeping back into the picture.  Now this is very early but I do believe we may see a slight increase in consumer prices (CPI) as early as Q4 and certainly by Q1 of 2004 if indeed prices are on the rise.  If this is the case it could change the dynamics in the way money flows in and out of stocks as recently discussed in detail.  Today's comments by Greenspan also hinted at potential future inflation (as he mentioned deflation is now unlikely).  Last year this time deflation was a concern and the Fed remarks were such indicating it was a concern.   That concern seems to have faded, which means the numbers are likely getting stronger (not weaker).  If the risk of deflation is fading fast then the risk of future inflation may be more real than many believe or understand. 

Someone also commented on the message board or via email (I am not sure which) that basically "inflation isn't a bad thing".  I did not say it was a bad thing.  Nor did I say it was a good thing.  It was not my intention to imply neither.  Its simply "a thing" that must be monitored.  Whether or not its bad or good really depends upon an individuals position.  If you own  physicals it can be good.  Interest rates in general tend to move higher as a result of inflation.  Just recently I commented on this and mentioned that I've seen interesting movement in interest rates in recent weeks.  Just this week alone interest rates have risen sharply (many lenders have upped their lending rates on mortgages 1/2 point this week alone).  This is something else I monitor and track via my own research on data. I have some interest rate (mortgage) data on the site which you are welcome to access and use as well.  This is available to you via our "Links" page.  

We've seen inflation in certain area's for months by the way.  Area's such as energy's for example. Crude is back above $30 a barrel following an official IMPA buy setup.

Short positions:

Markets setting up for Short  Positions:

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LONG POSITIONS:  

Dollar (DX) - Many members are long here and that of course is because the IMPA setup.  This occurred in conjunction with Mr. Soro's timely informative "bearish remarks".  Think he needed some sellers (so he could buy back some shorts)?  Perhaps.  Even if he didn't that's the right mind-set for us. By that I mean -  don't believe any part of an announcement like that, ever.  Follow the data only and use your head.  These guys aren't likely going to come out and reveal their position until they've wrapped it up (or in the rare cases when they want to manipulate the small traders in their favor).  

* I discussed this yesterday (7/15) as well. 

Markets setting up for Long positions: 

SPREADS:

Baskets: 

OPTIONS:  

Fall Bean Trade -  The fall soybean trade is fast approaching.  August-September is the time frame to establish positions in this trade.  I'll begin looking at this in August.  Right now you'll note that the prices are too high (based on my instructions for this trade).  You can review those instructions in your workshop manual.  This will be another HOTpage trade as well. 

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).  
   

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:

Sept-03 S&P500 - Lower.  See comments above. 

My outlook for tomorrow:  Lower with bounces expected as more and more earnings data is released. IBM data appears to be bearish in here as Intel data (earnings) was slightly bullish. 

Sept-03 ND (IX) -  Same 

Sept-03 DJ (Dow Jones) -  Same

Sept-03 RL (Russell 2000) - Same 

Current High Risk Positions and outlook: 

Stocks: 

That's it for tonight and I'll talk with you all on the next report which will be released tomorrow as well (morning or evening, you'll receive an email notification).  I will continue to track and update the hotpage position daily (either on the discussion site or in the reports or both places as well).  If you are not on the discussion site, send me an email and lets get you on it.  

Have a very good weekend!  

Very Respectfully,
Floyd

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 now on-line.  The backup site provides a second source for the data just incase something goes wrong with the main site or the computer driving the data to the main site.  The address to the backup site is http://www.cotdata.com.  

* 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.