Kennedy, Editor of Elliott
Wave International's Futures
their first — their first kiss, their first car or their
also seem to remember their first. Often, the high or low of the
week will occur within the first few hours of trading Monday.
Similarly, the high or low of the month will occur within the
first few trading days of that month. Even annually, the high
or low of the year will often develop within the first few weeks
of trading in January. I have also found the price ranges these
bars make tend to act as significant support or resistance levels
for price action later in the week, month or year.
- In charts
1-4, (Coffee, Soybeans, Cotton and Orange Juice), you can
see many examples of the first or second hourly bar of the
week being the high or low of that week. You'll also see examples
of how the range of these bars acts as support or resistance
for midweek bounces or pullbacks.
5-8 (Coffee, Sugar, Soybeans and Lean Hogs) show how the first
few trading days of each month often include the high or low
of that month. The range of these bars provided support or
resistance for midmonth bounces or pullbacks, similar to the
9 (Cocoa) and 10 (Orange Juice) have fewer examples than the
60-minute and daily charts. Nevertheless, I still find that
the first few weeks of trading in January often set a market's
tone for the rest of the year.
As with all
my analytical tools and techniques, this rule of "firsts"
has stood the test of time. I wouldn't use it unless I had found
that it works on any time frame and any market with a high degree
of reliability. As you can see in chart 11 (Microsoft), the same
tendency of prices to register the high or low of the week within
the first few hours of trading Monday is apparent.
Chart 12 (Swiss
Franc) shows an excellent example of this price characteristic
as well. As Steve Briese of Insider Capital Group (editor of Bullish
Review and Market Revolutions 1-888-423-4950) states:
"Currencies usually make an extreme reading for the year
— either low or high — within the first two weeks
of each year." If you don't recognize the name, Steve Briese
is probably the world's foremost expert on interpreting Commitment
of Traders Report data.
How is this
technique of "firsts" useful to you as a trader? It
is helpful in identifying the direction prices will move, in addition
to significant support and resistance levels. As an Elliottician,
it helps me time the end of impulse moves or corrections. If you
would like to learn more about this technique, I highly recommend
the book, The Logical Trader, by Mark Fisher. Mark has
done extensive research into this technique and has incorporated
it into a very successful trading methodology
futures analyst Jeffrey Kennedy watches all the major commodity
and currency markets throughout each day's trading session. Then,
at the end of the day, he reveals the market(s) with the most
promising set up in Daily
Futures Junctures. Each month in Monthly
Futures Junctures, he also posts his picks for the 6-8 longer-term
always explains his analysis to make sure that you learn and understand
how the markets move.
Jeffrey Kennedy's Futures Junctures Now. It's 100% Risk-Free.