Weekly Futures Report

Top Day Recommendations

January 17

Martin Luther King Day. A US government holiday. A bank holiday. No

stocks traded. Early closings for electronic markets. No eco data.

Week of January 17 - January 21

Date ET Release For Actual Briefing.com Consensus Prior Revised

From

Jan 18 08:30 Empire Manufacturing Jan 12.0 12.0 10.57

Jan 18 09:00 Net Long-Term TIC Flows Nov NA NA $27.6B

Jan 18 10:00 NAHB Housing Market Index Jan 15 16 16

Jan 19 07:00 MBA Mortgage Purchase Index 01/14 NA NA +2.2%

Jan 19 08:30 Housing Starts Dec 540K 550K 555K

Jan 19 08:30 Building Permits Dec 540K 560K 530K

Jan 20 08:30 Initial Claims 01/15 430K 425K 445K

Jan 20 08:30 Continuing Claims 01/08 4000K 3900K 3879K

Jan 20 10:00 Existing Home Sales Dec 4.85M 4.80M 4.68M

Jan 20 10:00 Leading Indicators Dec 0.7% 0.6% 1.1%

Jan 20 10:00 Philadelphia Fed Jan 21.0 20.5 20.8 24.3

Jan 20 11:00 Crude Inventories 01/15 NA NA -2.15M

Current views, speculations and suggestions

good till close of business today. These are strictly technical in nature

only, not fundamentally based or biased.

Legend:

P is positive

N is Negative

PRD is Potential Trend Reversal Day

S2 is strong support

S1 is good support

DS is Daily Support

DR is Daily Resistance

R1 is Good resistance

R2 is Strong Resistance

S1, S2, R1, R2 change once, weekly, so DS can be below weekly support

levels and DR can be above weekly resistance levels as a week of trading

unfolds

Levels are for the most active futures contract.

DAILY SUPPORT AND RESISTANCE

Trend S2 S1 DS DR R1 R2

Emini

S&P N 1247 1268 1279 1294 1300 1311

Emini NQ P 2239 2279 2304 232950 2341 2363

Yen P 119.07 119.78 120.18 121.14 121.35 122.16

EC P 126.42 129.37 132.91 134.34 135.80 138.00

10 year P 119.10 120.02 120.00 120.31 121.17 122.08

30 year P 118.31 119.16 119.24 121.15 121.31 123.03

Soybeans P 14.10 14.29

Corn P 6.40 6.54

Gold PRD 1331 13466 1351.4 1374.6 1384 1407

Silver PRD 27.06 27.50 28.06 28.94 29.51 30.50

Copper N 419 431 437 446 449 451

Mar

Crude P 87.50 90.13 91.65 93.15 94.30 95.37

Sugar P 30.07 31.97

**************

N.B.: if you initiate a trade using ANY of these

numbers use a STOP at least equivalent to 2 ½%.

Repeat: use Stops. Don’t think about using Stops.

Use Stops. Some find it appropriate to look at the

margin requirement and use that as a Stop or if

it’s a steep initial requirement, use half. But

whatever you do, stop thinking about any other

alternative and use Stops.

Please feel free to visit www.futureswithvision.com for more

information.

********************************************

Futures trading entails considerable risk and is not for

everyone. An account can lose more than its initial investment.

Stops are not necessarily filled at the stop level. Past

performance is not a guarantee of future results.

The Tractatus of Trade (new and improved)

Or

Aphorisms from a Trading Life

Copyright 2010 Charles Kespert

Trading isn’t about winning or losing, it’s about self discovery.

You only learn from losing trades.

Along with the probability that your trade will be profitable,

there's probably a greater probability that it won't be. Think

about the trade you'll make if things don't work out.

Don’t be afraid to go where the market wants to take you.

It doesn’t matter where you get in. The only thing that maters

is where you get out.

Moving averages seem to be important. The steeper the slope,

the better the trade.

Markets tend to overshoot. The high will be higher than “your

high.” The low will be lower than…

Never meet a margin call. Liquidate. The margin clerk is your

best friend.

Welcome to the learning curve. A trader is always, somewhere,

within the learning curve. As long as the curve isn’t circular,

you’re making progress.

When someone says “Believe me, it’s different this time” make

the choice not to believe it. Markets are the cyclic expression of

hope, fear and greed, in other words, human nature. Human

nature doesn’t change. The fact that human nature doesn’t

change is why Shakespeare is relevant, we read Plato and are

in awe of Sophocles. Technology changes, human nature

doesn’t.

In trading, he who has the best rules wins. Your innate,

intuitive brilliance only talks to you occasionally.

To panic is human.

As a trader, your job is separate the signal from the noise.

Markets don’t suffer fools. They just take their money.

Don’t let your desire to “do something, do anything” prevent

you from doing the right thing. Patience means watching your

keys, waiting for your setup and executing. More than one

train leaves the station. The trains leave continuously; the

station stays in place.

Hubris is built on a foundation of success.

The market will all too soon locate, expose and exploit your

weaknesses. All strategies have a weakness. Know yours,

Achilles.

Life is a study in perspective.

Trade from side of trend. Trade from side of trend. Trade

from side of trend. Even if your entry level is abysmal, the

trend may reassert itself and bail you out.

Your current beliefs may be obscuring the truth.

When you put a trade on, it should work almost immediately.

If it doesn’t, seriously consider bagging the idea and look for a

new setup.

The trend is your friend till the bend at the end.

There’s no such thing as “trading with house money.” It’s

either your money and you’re ahead, or it’s your money and

you’re behind. Just don’t let your money become their money.

At the same time, take trades. The only way you are going to

make money is by taking trades.

Don’t worry about winning or losing on a particular trade.

There’s only one concern: does the trade help to grow your

bottom line. Taking losses is a strategic necessity.

Hope is not an action.

The futures market is the greatest wealth transfer mechanism

ever invented.

No matter how many times you shuffle the deck the cards

remain the same.

The more efficient a market is, the more random it is. If a

market is inefficient, the more that market will trend. The

efficiency of a market is inversely correlated to its liquidity.

Do you look at your positions as assets or liabilities? Liquidate

the liabilities with extreme prejudice.

Life is full of breaks that don’t break evenly.

If you are in a position and you are losing more in that position

than you can reasonably expect to make, get out.

It is far easier to lose money trading than to make it. It is far

easier to make money trading than to keep it.

A margin call argues for your continuing status as an amateur.

If the market prints your price and doesn’t fill you, go to the

market.

If you don’t have an exit strategy, the market will figure out

one for you.

If your trading begins to resemble an exercise in madness, at

least take a break for a day.

A market trades to try and fill all orders: limits, buy stops, sell

stops, everything. If there aren’t any orders, there’s no reason

for the market to move.

If your indicators are lagging but your data is high frequency,

you should be okay.

If your data is low frequency, your indicators are useless.

Your ability to discriminate, to successfully think critically, is

inversely proportionate to the profitability of your positions.

You can go broke taking profits, very small profits. This type

of trading behavior will also convince you that you're

performing better at the buy/sell game than you really are.

When the pundits start talking about a barrel of crude oil and

a bushel of wheat as not really a barrel of oil or a bushel of

wheat but an asset class and you are long, get nervous.

Just give it time; the market will trade at previously

incomprehensible levels, regularly.

Most indicators are worthless; the “price” of something

motivates buyers and sellers. Learn to read “price action.”

Your next trade could be your last trade for a very long time.

Be aware of this and don’t let it happen. Use stops.

Markets are challenging: when illiquidity meets volatility

parallel lines converge, divergences converge, convergences

diverge and mathematical certainty is forced to embrace new

theorems.

If you are down a certain, predetermined percentage of your

equity (for some this could be as little as 2% and for others this

could be as much as 15%) and you have open positions,

liquidate and go to cash. You and the market aren’t on the

same schedule. (Few ever do this). Hitting the reset button is a

psychological palliative.

In other words, not to change the subject, when your positions

have little relevance to the current market, liquidate and reset.

When all your trades are going incredibly well, when you’re

seeing the market as if you’ve already read tomorrow’s papers

and you’re just about ready to thicken the callous that resides

just below your left shoulder with your right hand, get out

Webster’s and reread the definition of coincidence.

Markets are thematic. In fact, those flashing numbers are

always trying to tell or sell a story. Become a better reader.

Don’t think of the market as an opponent to be bulled,

bloodied, battered and beaten. Its resources are far greater

than yours. It’s better to concede the conceit of market as

ocean in all its obvious metaphoric diversity.

The Myth of Sisyphus resonates in the experience of

trading.

Remember that irony is alive, well and constantly at work in

the universe; irony, the cornerstone to the construct of the

Divine Comedy.

Trading isn’t about winning or losing, it’s about building

equity. Taking strategic losses is a key to building equity.

Winning or losing on any one particular trade is meaningless.

A market is a market. It can do anything it wants. It doesn’t

have to make sense. A market is only obliged to itself. In fact,

exploiting this fact will lead to your best profits.

One aspect of a period of successful trading is to convince you

into believing that you actually know what you’re doing.

Just as persistence allows mediocrity to soar, a persistent, rule

driven trading approach seasoned with just the right touch of

intuition can turn your sow’s ear into a silk purse.

What you want to have happen in a market often prevents you

from doing what you should be doing in a market.

That which is true, never changes. A market, a dynamic

revaluating, discounting mechanism, always changes. There’s

very little that’s true about a market.

Beware of the new paradigm; it may not be wearing any

clothes.

Beware the talking heads; they are only talking their positions

and aren’t seeking the truth; they are far more interested in

acquiring your money.

If you don’t crave profit, profit may be attracted to you. If you

don’t fear loss, loss may not be attracted to you.

If you want to be condemned, keep doing what you’ve always

done.

Worst positions leave last.

To capitulate isn’t easy.

Trading is like procreation; if you’re nervous it just isn’t going

to work that well.

The market is an imperfect game. Chess is a perfect game. All

information is transparent. Either you are a smart player and

can see the board or you are a challenged player. There is no

luck. Poker is an imperfect game. You don’t know all variables

and bluff by itself can win the day.

You only learn from losing trades. A winning trade is simply a

confirmation of your current infallibility.

Do everything you can to keep a losing trade an annoyance

rather than a memorable event.

If you are in a winning position, remain aware that just as the

sea reclaims land, the market wants its money back.

Never disrespect the possible (especially option expirations).

A trade is a trade. It is a financial event. It is not a justification

or repudiation of your current geopolitical or eco-political

model.

Don’t convince yourself that you’ve figured out the puzzle. The

puzzle keeps changing. Eventually the puzzle just disappears.

You have to be willing to give back, to fold, to square your

position to cash. If you don’t give something back they will end

up taking it back on its terms, not yours.

Markets spend as much time going up as they do going down,

the only difference is amplitude.

As the futures market is a zero sum game and the instruments

of trade expire continually, regression to the mean should be a

frequent event. The stock market is totally different; for every

buyer there doesn’t have to be a seller and the life of a stock is

theoretically, potentially, infinite. Regression to the mean

should be a “less frequent” event at Wall and Broad.

Good trades are often counter intuitive.

There’s far greater skill in trading well when you’re behind

than in trading well when you’re ahead.

Ascertaining the correct value for 6 variables before making a

trading decision is not better than ascertaining the correct

value for 3 variables. When it comes to heuristics, kiss.

All your answers have questions. (In remembrance of Katy).

Markets are mechanisms that foster irrational behavior.

Don’t let your trading be held hostage to the need for

discernment.

As soon as market action can be explained and generally

understood, expect the market to change.

Before entering a trade, mentally understand and accept all

potential loses.

If you have to win you’ll lose.

If you have to lose, you will.

The seeds of doubt are self sown.

The market doesn’t care about your positions. No one but you

cares about your positions.

On initial order placement, never be impetuous. Wait for your

price.

Look for ways to take action. Idle brilliance addles.

Good trades usually set up with a sense of inevitability and

unfold in slow motion.

Remembrance may be the inability to let go.

In trading, feeling comfortable should be an uncomfortable

feeling.

Great windfall profits tend to remain paper profits.

You can’t continue to court disaster without eventually landing

a date.

You’re only as young as your last winning trade.

People feel more comfortable with losing positions and more

nervous with winning positions.

When do you place a stop? When you put the trade on in the

first place. It’s at that exact moment when you are most

capable of managing risk.

If you have a position in a market and the average true range

of that market is 128 points and the market has only had a

range of 28 points so far, start figuring out which side of the

market is going to deliver the next 100 points.

When asked to play a game, then stopped mid game and asked

how they are doing, people invariably state that they are

performing at better levels than they actually are.

Work on four things: fear, anger, frustration and judgment;

it’s all derived from fear.

Anger is the clash of desires.

Whatever you believe is undoubtedly correct until the passage

of time offers another suggestion.

Simplify. If you are using 4 indicators to trade, use three. If

you are trading 5 markets, trade 4, then reexamine the number

of indicators you’re using.

Never trade out of boredom.

Markets generally lack conviction, especially post 9/11. That’s

why trend traders have a low incidence of winning. Take

advantage of that.

9/11 taught traders that anything is possible.

What funds buy, they sell. No fund is ever going to take

delivery of a barrel of oil or a bag of coffee. Take advantage of

that.

You manifest the world through interpretation.

Life is, at least, the non-annihilating coexistence of opposites.

Ultimate sorrow is to love as gravity is to mass.

Don’t be so eager to burn today in the hopes of a better

tomorrow. Death hides in the folds of the future.

There is no failure, only feedback. (NLP supposition).

Charles Kespert

***********************

HYPOTHETICAL PERFORMANCE RESULTS HAVE

MANY INHERENT LIMITATIONS, SOME OF WHICH

ARE DESCRIBED BELOW. NO REPRESENTATION IS

BEING MADE THAT ANY ACCOUNT WILL OR IS

LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR

TO THOSE SHOWN. IN FACT, THERE ARE

FREQUENTLY SHARP DIFFERENCES BETWEEN

HYPOTHETICAL PERFORMANCE RESULTS AND THE

ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY

ANY PARTICULAR TRADING PROGRAM.

ONE OF THE LIMITATIONS OF HYPOTHETICAL

PERFORMANCE RESULTS IS THAT THEY ARE

GENERALLY PREPARED WITH THE BENEFIT OF

HINDSIGHT. IN ADDITION, AL TRADING DOES NOT

INVOLVE FINANCIAL RISK, AND NO

HYPOTHETIOTHETICAL TRADING RECORD CAN

COMPLETELY ACCOUNT FOR THE IMPACT OF

FINANCIAL RISK IN ACTUAL TRADING. FOR

EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR

TO ADHERE TO A PARTICULAR TRADING PROGRAM

IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS

WHICH CAN ALSO ADVERSELY AFFECT ACTUAL

TRADING RESULTS. THERE ARE NUMEROUS OTHER

FACTORS RELATED TO THE MARKETS IN GENERAL

OR TO THE IMPLEMENTATION OF ANY SPECIFIC

TRADING PROGRAM WHICH CANNOT BE FULLY

ACCOUNTED FOR IN THE PREPARATION OF

HYPOTHETICAL PERFORMANCE RESULTS AND ALL

OF WHICH CAN ADVERSELY AFFECT ACTUAL

TRADING RESULTS.