Make Believe Market Newsletter
8/22/2006

MARKET: Live Cattle

Greetings!

"I've a lot to say about Live Cattle, and I'm hoping I don't lose you to a lot of technical points. Without the benefit of you having read and worked with my trading Guidelines, which all my Precision Trading members have studied, some comments may not be as clear to you as I would like."

Clear it all up, my little droogie. Show your history of exact entries and exits and all will be as clear as an unmuddied lake.

"Well, here goes."

"We are going to discus Live Cattle from the view of two different time windows. When I refer to the 'daily' time window, it will be as if you are looking at a 'daily' chart of Live Cattle. Each price bar represents a single trading day on the 'daily' chart."

"When referring to the 'weekly' time frame, we are dealing with the 'weekly' price chart, where each price bar represents a complete trading week (usually 5 trading days per bar)."

To clarify, you're saying a week is usually 5 days?

"Weekly time cycles show a strong potential for weekly swing (pivot...ie top or bottom) for week 8/11 and week 9/1. We can see on the weekly chart that week 8/11 is currently the weekly high. However, it has yet to form a weekly swing top and may turn out to be a PAUSE top only."

"What is a PAUSE top?"

All right, which one of you asked him!

"It's a top, as viewed on a price chart, where the price bar stands out having a higher high than the bar before and after it. It simply 'sticks out' from its immediate neighbor bars. But instead of prices moving lower to confirm it as a bonified swing top (by making lower lows), such a top is followed by an INSIDE BAR. An 'inside bar' is a bar that does not make a higher high or lower low than the previous price bar."

"If you look at week 8/18 on the weekly chart of Live Cattle, you'll see that it is an 'inside bar', and it follows our potential swing top high of week 8/11. This is the first 'clue or warning' that a PAUSE could form rather than a complete swing (or pivot) top."

It's my first clue you're a double-talker. Here's where our hero covers all bases. If it does make a lower low, even a single tick, he claims victory, if it does not, then he claims no trade was initiated. This is another way for Ricky to amass a misleadingly high accuracy rate. The trade was either "good" or else it was "not taken". Folks, he's never wrong. To be shown "accurate" or "correct" one MUST compare his "bad" or "wrong" forecasts or trades to the "good" ones, unless the whole thing is a fantasy to begin with, and in this case it is.

"The other thing having me suspect this possibility is that the high of week 8/11 did not reach the price zone that I consider being the overbought price zone. To reach this price zone, prices must reach or exceed 93.75 in Live Cattle. Week 8/11 did not do this."

Are you forecasting something or not?

"Because of this, there exists good potential that Live Cattle will take another run at it and could possibly do this for our next weekly turn date which is week 9/1. This week is week 8/25, considered the -1 week to week 9/1 (meaning it is one weekly bar early but close enough to be influenced)."

So, now your forecasting no turn will occur?

"So this now brings me to the 'daily' time frame."

"Prices have been slowly moving lower off the week 8/11 top. Today, price rose to form what I call a potential lower swing top on the daily chart."

"Normally that would not mean a lot by itself, but 8/22 is also a daily cycle turn date. Thus, a swing (pivot) is expected to occur with the 8/22 price bar (with a margin of error of one day.. i.e. one price bar)."

"...error of one day...." Which sounds like a small error but is actually ridiculously enormous when one considers ALL the factors, one being the total number of days covered by these so called forecasts.

"Daily cycles indicate that 8/22 has very good potential to become a daily swing top. What this means is, prices are likely to drop on 8/23."

"Normally, with the potential of a weekly swing top confirming for week 8/11 still in the balance and the potential for a lower swing top on the daily chart for 8/22, I'd be excited about selling off the 8/22 price bar."

"But..."

"Recent historical price cycles for the daily time frame show a strong prepensity for Live Cattle to form a corrective swing rather than simply a daily trend change. In other words, the potential is HIGH that Live Cattle will form an opposing swing out of the 8/23 price bar off support."

Huh?

"Let me try to explain this another way. The 'pattern' that is most evident right now for Live Cattle is that if price drops on 8/23, which it is highly likely to do, it will find support on 8/23 and from there rally and soon confirm a daily swing bottom off the 8/23 price bar."

"Let me try to explain this another way", since now I'm confused.

Did he just say prices will drop on 8/23 and they will also go up on 8/23? Oh, boy.

"But you may be thinking, "hey, thought the time date was for 8/22." Yes. 8/23, however, is just one price bar off. So it exists within the 8/22 "time window" of influence."

Again, ..."just one price bar off.", is a prime example of Rick's double-talk. It SEEMS minor, but only in certain contexts.

"With weekly prices still short of the weekly overbought price zone that I mention starts at 93.75, I suspect that Live Cattle is going to take another run at it. And with the next weekly swing due for the week 9/1 time period, I suspect a weekly swing top will be found within that weekly time window."

So if it continues to climb, you called it, unless it drops, which you just warned us it may also do. Thanks. Real tradable information here.......NOT!

"And if daily cycles plays out as it has in recent history, I suspect that prices would find support on 8/23 (tomorrow) and then rise from there towards eventually making this weekly swing top."

"And just for giggles, the first couple of support levels I've calculated for Live Cattle for 8/23 is 90.22 and then 89.87."

An outside observer would conclude everything you present is "...for giggles" and he'd be correct.

"Naturally, this is all speculation and that you should not mortgage your home to the hilt to trade this information. However, tradable it is! Especially if you happen to note the market following this cyclic pattern, and especially if it were to find support on 8/23 and rally. Then you'd know to expect prices to rise into 93.75+. "

"Naturally, this is all speculation..." or let me cover myself since I'm talking out of my ass.

"May you find success!"

Success? Seek an actual net profitable trader, not this salesman posing as an "analyst".