PIT POINTS(tm) is a compilation of price support and resistance points based on proprietary algorithms. Pit traders often use such points to either enter or exit short term trades. Off-floor traders can take advantage of these price points to fine tune entry or exits for longer term trades. Specific trade instructions are provided for the most critical support and resistance price points for purposes of clarity only. THESE SHOULD NOT BE CONSIDERED TRADE RECOMMENDATIONS, PIT POINTS(tm) IS NOT A TRADING SYSTEM. The prices displayed are "raw" numbers which floor traders may add a few points buffer to in implementing trades.
A>11/97 CBOT Soybeans High: 723-0/0 Low: 711-0/0 Close: 720-1/2 B> TRENDS: Weekly: UP T/C: 715-0/0 Daily: TURNING UP T/C: 718-1/2 C> Daily Reversal Signal: SS @ 700-1/4 STOP: 729-0/0 $1437 D> Trend Continuation Signal: BS @ 730-3/4 STOP: 719-1/4 $575 E> Trend Reversal Signal: SS @ 687-1/2 STOP: 693-1/2 $300 F> Resistance: 725-1/2 727-3/4 732-3/4 735-1/2 G> Support: *720-1/2 713-1/4 711-1/2 710-1/2 696-3/4 696-1/2
Sample Report Key
"A" lists the contract delivery month and futures contract name, followed by the latest daily high, low and closing prices.
"B" Weekly and Daily trends are identified. These are propietary rankings of the intermediate or weekly price trend and the short term or daily trend. These may be listed as "UP", "DOWN", or "FLAT". These trend identifiers are unusual in that they are based on price performance in relationship to key price barriers, rather then traditional methods. Trend Change (T/C) prices are also provided. These are prices that if penetrated on a closing basis would reverse the respective trend.
"C" Is the "Daily Reversal Signal"--a nearby point, that if penetrated, would indicate a daily trend change (but not a reversal of the weekly trend). Traders looking to fade the intermediate trend might use this level as an early entry ahead of the "Trend Reversal Signal" [below]. The "Daily Reversal Signal" is not always available and may not be shown.
"D" Shows the key price level that, if breeched, indicates a continuation of the trend shown in line "B". "BS" means "Buy Stop", "SS" indicates "Sell Stop". A suggested stop loss point for the entry is provided, along with the dollar risk associated with a trade executed at those levels. In the case of a "FLAT" trend, the buy stop trade would be labeled "Break Out Signal", rather than "Trend Continuation Signal".
"E" Displays the "Trend Reversal Signal" at which price the weekly trend would be reversed. A suggested stop loss is also calculated for this trade. In the case of a "Flat" intermediate trend, a sell stop would be labeled "Break Down Signal", instead. Keep in mind that a floor trader might instead execute a buy on weakness trade near this price point, if (s)he believes the intermediate trend will reassert itself.
"F" Lists additional daily resistance price points in ascending order. Floor traders often use these points either to sell on strength or as buy stops, depending on their market outlook. They place greater confidence in a cluster of closely placed resistance points. An asterick (*) is shown for highly significant resistance points.
"G" Lists additional daily support price points in descending order. Floor traders may use these points as sell stops or to buy on weakness, depending on their market view. Again, greater confidence is placed on tightly clustered support prices. An asterick (*) before the price indicates a highly significant price support point.
This service is designed to help in formulating commodity trading strategies and should under no circumstances be construed as specific trading recommendations. This service should not be construed as an offer to sell or a solicitation to buy any commodity futures referred to herein. The content is based on information that is believed to be reliable, but it is not guaranteed. No claim is made that recommendations will be profitable or that they will not result in losses. Those using the information herein for trading purposes are responsible for their own actions. Reproduction of this material by any means is prohibited.
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