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         Daily Blog - Tiger Software

                                   October 7, 2007
Updated 10/11/2007, 3/21/2008
   Simple Ways To Trade Food -Commodities
         with TigerSoft Accumulation Index and
                      and TigerSoft Buys/Sells:
Corn (C_1620) 
Coffee (CC1620)
Cocoa (CO1620) 
Live Cattle (LC1620)
Orange Juice (OJ1620)
Pork Bellies (PB1620) 
Soybeans (S_1620) -
Sugar (SU1620)
                             Wheat (W_1620)

William Schmidt,     - Tiger Software's Creator
      (C) 2007 William Schmidt, Ph. D.  - All Rights Reserved. 

      No reproductions of this blog or quoting from it
      without explicit written consent by its author is permitted.

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      to william_schmidt@hotmail.com

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                     Futures Trading with TigerSoft.        

                                TigerSoft provided you data for Perpetual Commodity Contracts.
                    The basic TigerSoft program lets you get automatic Buys and Sells for
                    the SP-500 (W-Minis), metals, currencies and food commodities.  Food
                    commodities are discussed in this Blog.  But first let me show you the
                    current chart for the E-Mini.  Note that these automatic Buys and Sells
                    are optimized automatically.  For more information, please see the
                    Introductory TigerSoft discussion and Special Price. 
                               General market timing is the province of our Peerless Stock Market
                    Timing ($295).  Peerless has now been back-tested to 1915.  A new book is
                    is coming out for Peerless.
                     -----------------------------------    E-Mini ---------------------------------------------------------------------
       ES1620.GIF (15430 bytes)                

Simple Ways To Trade Food Commodities
  with TigerSoft Accumulation Index and TigerSoft Buys/Sells 

    See also 2/26/2008 Food Commodities Streak Upwards.  TigerSoft Easily Spotted The Start of Their Moves..

            In the past, I have always said that Tiger's internal strength indicators work best with stocks, indices, metals,
    currencies and interest rate driven futures but less well with food commodities.which are heavily affected by weather
    conditions, which no one can predict very well.  However, because World Demand has become so important
    to food commodities in this Global Economy, Tiger is now doing a fine job in predicting their movement
    The rules we can set out for trading commodities here, will help you when they are applied to stocks, ETFs, currencies,
    metals and indices.  Commodity traders know that gains like we show below mean very big profits because of
    the leverage a trader gets here.

           There are many of examples of the how well Tiger and Peerless work with stocks, indices,  metals, currencies
    and interest rate driven investment vehicles.  What missing is an exposition of TigerSoft and food commodities. This
    page will try to remedy that.  This page will grow in the course of the week as time permits. So come back often. 
    I will set out basic rules in the first commodity to be examined, CORN, and then we will see how well they work
    with the others.   We'll see what revisions and supplemental rules are needed, too. 
            This should make a reading of my Explosive Super Stocks and Short Selling books more valuable.  I hope it
    will make some you want to get our software.  The Tiger Accumulation Index was first invented by me in
    1981.  We have had years of experience using it.  The automatic Buys and Sells are unique to TigerSoft.  A fuller
    explanation of our indicators and the best way to trade them are in my books and the Help routines of the

           Here we will use at "perpetual contracts". For prices these employ the contract to expire closest to,
    but at least 16 days away and for volume, they use all months' contracts' volume.  We go back about two years.
    We look at 7 commodities: corn, coffee, cocoa, live cattle, orange juice, pork bellies, soybeans, sugar and wheat. 
    We will be most interested how well price patterns, the Tiger Accumulation Index, OBV and automatic signals work..

                             Corn (C_1620) - done
Coffee (CC1620) - done
Cocoa (CO1620) 
Live Cattle (LC1620) - done
Orange Juice (OJ1620) - done
                             Pork Bellies (PB1620)
                             Soybeans (S_1620)
                             Sugar (SU1620)
                             Wheat (W_1620)

       =========================    CORN  ================================= 

                                       Corn  C_1620   -   2005

              The chart below for corn in 2005 illustrates some basic rules for calling a top with the TigerSoft tools.
     (1)  The July peak was not confirmed by a higher Tiger Accumulation Index. 
     (2)  The July peak was not confirmed by a higher OBV (aggressive buying).
     (3)  The breakout quickly failed to stay above the breakpoint at 235.   This is a "false breakout".
     (4)  An upsloping head and shoulders pattern is traced out.   The breaking of the neckline at 227 is bearish.
     (5)  Prices quickly fell back below the blue 50-day ma and the Accumulaton index turned negative (red) to confirm
            the breakdown.
     (6)  A simple 20-day Stochastic using the K-Line gave the best signals in this period. That was the optimized best system.
     (7)  Prices crossing back above the 50-day ma with the Accumulaton turning positive signals an upturn.  More
            evidence of an upturn would be desirable.

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                                                   Corn  C_1620   -   2005-2006

            8) Buy on first pullback to rising 50-day ma if Tiger Accumulation Index is positive. January 2006.
            9) Expect resistance at point where prices previously broke down.  230.
            10) Use Automatic Red Buys to trade price uptrend.
            11) Prepare to sell if new is made with Tiger Accumulation Index is negative and OBV does
                  not confirm.  Note non-confirmations on last day of chart.

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                                                   Corn  C_1620   -   2006

                 (12)   The May peak was not confirmed by OBV and the Tiger Accumulation Index was negative.
                          That is a reliable Sell signal.
                 (13)   Resistance is often created by earlier peaks.  The 260 level resistance started
                          in July 2005 and stoipped two 3006 rallies.
                 (14)   Buy at well tested support if the Accumulation Index and OBV are not confirming the price
                         weakness.   This is short-term because of the well-tested horizontal support fails, it is
                         best to sell.
                 (15)   Buy on price breakout above well tested resistance ay 260. September 2006.
                 (16) The price breakout above 260 causes the previously best trading range BUY/SELL system
                         not to work.  Use a trend-following system or a longer-term Stochastic.

                 (17) Red high volume confirms the breakout and makes it more reliable.

                 (18) The rising of the Tiger Accumulation Index above the first dotted line confirms the breakout, too.

                 (19) When breakout advance takes place without a pullback, you can add to positions at price uptrend-line.

                 (20 The November peak at the upper band showed negative readings from the Tiger Accumulation
                         Index.   This would be a good place to take profits.

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                                         Corn  C_1620   -   2006-2007

                  (21)   Buy at rising blue 50-day ma when current Accumulaton Index is very positive.

                  (22) Prepare to Sell at upper band if Tiger Accumulation is negative. Jan., June and Sept. 2007.

                  (23) Drop below 50-dma with Accum. Index negative is usually a reliable Sell.

                  (24) When OBV in declining for more than 2-3 months, prices usually subside.

                 (25)   The basis for the optimized Tiger's Automatic Buys and Sells has switched to
                         short term trading because Corn has stopped trending.

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 ============================   COFFEE   ============================

                                                             2005  Coffee - CC1620 

                            The March top and  December bottom conform exactly to our rule to sell at the
                   upper band when the Tiger Accumulation is negative (NNC) and Buy at the lower band
                   when the Accumulation Index is positive (PNC).  These rules are made more epmphatic
                   when the OBV faile to confirm the high or low, as is true in the chart below. 

                           In December 2005, we see another classic Sell based on the same conditions that
                   appeares at the March top: a new high at the upper band.with the Accum. Index negative
                   and the OBV not confirming.   But you will also notice that the 110 level was tested five
                   times.from July to December. In the graph below the one below prices achieve a breakout
                   above the 110 resistance and rise quickly,  Perhaps, this is just short-covering.

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                                             2005 -2006  Coffee - CC1620

                     See the short-covering breakout above 119 below.  Then a quick top formation appears.
               Corn then breaks below its 50 dsy ma eith the Accumulation Index negative, for a Sell.

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                                                    2006  Coffee - CC1620
                         Do you see how the internal strength indicators grew more and more positive before the
                     price breakout at 111-114 in October?  Buying the breakout there was definitely the right thing
                     to do.  As long as the Accumulation Index stayed positive on the rally, the odds favored
                     prices would challenging the yearly highs near 129.  That is what happened.

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                                                         2007  Coffee - CC1620

                  Coffee's rising internal strength indicators predicted September price breakout above 130.
           Two months before this,   the OBV Line was making new highs and a month before the surge
           past 130,  the Tiger Accumulation Index soared to levels signifying informed, big money buying.
           Note the bullish breakaway gaps, too.  This presently looks quite strong.
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                                           2007  Coffee - CC1620

 =========================  LIVE COCOA   ============================

                                                          Cocoa - CO1620   2005

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                                          Cocoa - CO1620   2005 - 2006

            Not remarked on the chart below is the normally bearish head and shoulders pattern, from
         December to February.  This chart shows mostly red distribution.  Longs should have avoided it,
         unless it breaks out unexpectedly above 1600.  And that might well be simply a short squeeze
         if the Tiger Accumulation Index does not improve markedly.

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                                           Cocoa - CO1620   2006

                     False rallies, based on short squeezes are sometimes attmpted in a rising commodities
            market among those commodites which have the weakest internals.  The downtrending OBV
           is  a major sign of weakness.  The steadily negative Accumulation Index is as important.  And
           it too is bearishly negative.

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                                           Cocoa - CO1620   2007

                We have found pullbacks to the blue 50-dma soon after a bulge from the Tiger Accumulation
        Index to be good Buys.  You can see that in early March.  But the rally soon ran out of steam.
        The final high occurred in early July as COCOA reached the upper band with the Accumulation
        Index negative. The pattern now developing looks like an extended head and shoulders pattern.
        The neckline is the flat green support line.   The key resistance is the green line going through the
        pattern's shoulders.
                To avoid whip-saws around the 50-day ma, make sure the internals of the commodity support
        the trend you expect.

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 =========================  LIVE CATTLE   ============================
              Study the chart below.  It illustrates a lot.  It begins with a false breakout above 92.
          The gap down a few days later would have meant a loss.  But the bottom was easily
          recognized in August  Note the rising OBV line, despite the price decline.  This is a
          bullish divergence.  The Tiger Accumulation Index was positive on the test of the lows
          in August.  We recommend buying also on a close above the blue 50-day ma with the
          Tiger Accum. Index positive. See the inverted head and shoulders pattern.  Buy on a
          close above the neckline, at 84 in the chart below, if the AI is positive.  You can see at
          the resistance line as it is extended the right.  The level of the false breakout will be
          resistance on the first rally up to it.. The retreat to 88 and reversal day up there, just
          above the rising 50-day ma is a BUY with the Accumulation Index positive.    

                   Corn in the chart below had an optimized 20-day Stochastic Buy/Sell system.  This
         works fine until there is a breakout.   Trust the breakouts when they are confirmed. 

                                                         2005  Live Cattle - LC1620 
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                                                 2005 -2006  Live Cattle - LC1620

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                                            2006  Live Cattle - LC1620

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                                   2006 - 2007   Live Cattle - LC1620

                   The crossover of the 50-day ma in July did have a positive Tiger Accumulation Index
           and, so, could have been bought by our rules.  But the prior readings from the Accumulation
           Index were not very good, showing only non-confirmations of new lows, rather than positive
           non-confirmations.   Selling or selling short at the upper band with the Accumulation Index
           negative is in accordance with our rules here.  Note the resistance at 98 from the previous
           reversal pattern in February and March.

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 =========================  ORANGE JUICE   ============================

                                             2005  Orange Juice - OJ1620 

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                                      2005 -2006  Orange Juice - OJ1620 

     When you see this much blue Accumulation and the OBV is matching price in strength,
           use thee crossover of the 50-day ma with a positive Tiger Accumulation Index to take a
           bullish long position.   Here we could have sold on strength at the upper band at 130 and then
           retaken the long position at 125 two months later.. 
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                                                          2006  Orange Juice - OJ1620 

            Stick with the trend when it is supported by a mostly very blue Tiger Accumulation Index.
             Here that would have meant buying in February at 130, selling at 175 in July and buying
             back the long position at 193 in October.

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                                                          2007  Orange Juice - OJ1620 

                 Use negative readings from the Tiger Accumulation index to confirm a breakdown by
            prices below support.   Accordingly, one might have sold or sold short Orange Juice
            at 175 in August.   In July it rose slightly above its falling blue 50-day ma with the Accumulation
            Index positive.   This might have been used to vicer the short sale.  The rate of change of the
            50-day ma should also be considered.  It was falling very fast.  That means more resistance.
            The subsequent tests of the lows occurred with a very positive Accumulation Index.  Buying
            here would have been the correct response to these readings.

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 =========================  PORK BELLIES   ============================

                                                               2005  Pork Bellies - PB1620 

            Prk bellys' zigs and zags here can be traded nicely using the crossovers of the blue 50-day ma
      when the Tiger Accumulation Index confirms it.    This swings wildly and a simple system is best.
                               Sell 97
                               Buy 73
                               Sell 88

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                                                   2006  Pork Bellies - PB1620 
Using the same crossover rules and cover at support, these are the trades.

                                    Buy 83   - Feb
                                    Sell 79   - March
                                    Buy 87
                                    Sell 90
                                    Cover 78

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                                        2007  Pork Bellies - PB1620

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 =========================  PORK BELLIES   ============================

                                                               2005  Pork Bellies - PB1620 

                         The bearish June-July top pattern should stand out to any serious TigerSoft trader.
                    You should also see that it takes months for the pattern to be completed and prices to
                    sell off.

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 =========================  SOY BEANS   ============================

                                                               2005  Soy Beans- S 1620 

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                                                   2005 - 2006   Soy Beans- S 1620 

                         The Tiger Accumulation Index stays preponderately negative throughout the span
                  of time shown in the chart below.  This dominates.  The OBV Line is stronger.   But the
                  Accumulation Index tells the story.  I would not take moves past the 50-day ma as points
                  of entry for a purchase, though short sales might be covered then.

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                                                     2006    Soy Beans- S 1620 

rice breakouts from long bases have to be respected enough to cover any
              short sales.  But with such negative Accumulation, I would not go long on the
              breakout in October at 620.

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                                                 2006 - 2007   Soy Beans- S 1620 

                           The July  2007 breakout of the OBV Line for Soy Beans coincided with its first
                      post breakout pullback towards its 50-day ma.  This is the first reliably entry point.
                      The rising Accumulation Index and OBV justify holding the long position though
                      taking profits at the upper band would have been tempting.

                           The May breakout above a flat top would have made me hesitate to sell short
                      even though the upper band is reached with the Accumulation Index negative.     

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     ======================   SUGAR   ============================

                                               2005   Sugar- SU1620 
                The power of Sugar's move upwards in 2005 was foretold by the breakout above flat resistance
         preceded and followed by high levels of (blue) Tiger Accumulation.  First, we get a BUY
         simply upon the penetration of the blue 50-day ma.  Then, give a Buy to the breakout.  Next is
         a Buy on the first retreat to the rising 50-day ma following the breakout.  The flat topped .
         breakout is the next point where we would BUY more.  You may use the automatic Buy B24

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                                              2005 - 2006   Sugar- SU1620 

                   The bulge in the Tiger Accumulation produces a 100% advance in sugar in 6 months.
                   The lengthy duration of (blue) positive Accumulation is rare.  It puts the odds in a favor
                   even when there are retreats to a rising 21-day ma and even on the decline to the blue
                   50-day ma in February.

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                                                    2006   Sugar- SU1620

                   There are times when the automatic red Buys and Sells work perfectly for a lengthy
             period of time.   I suggest this is true after a big advance.  Professionals are retaking control.
             A quick double in a food commodity is a very good move.  After that, be prepared for a
             retracement.   In June Sugar's price drops below the falling (blue) 50-day ma. with the
             Tiger Accumulation negative.  This is an emphatic Sell.  There is no reason to take a long
             position at the end of the year, as the commodity goes sidewise.  The Tiger Accumulation
             Index is too negative.

SU1620.GIF (15247 bytes)

                                            2006 - 2007   Sugar- SU1620 
             At the end of 2006 and the start of 2007, Sugar develops a bearish head and shoulders
         pattern.  Red distribution predominates.  Sell short on the breaking of the neckline and on the
         first pullback upwards to the falling 50-day ma.  At 9 Sugar has fallen to the lower band
         with the Accumulation Index positive.   This is a Buy.  So is its rise in these conditions back
         above the 50-day ma,  It is a Sell at the upper band when the Accumulation Index is negative.   

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     ======================   WHEAT   ============================

                                               2005   Wheat- W 1620 

                  Recognizing a trading range early-on helps a lot here.  Unless the commodities'
           markets are weak a whole, it is usually best to cover short sales on tests of lows.
           The mostly red distribution shown in the Tiger Accumulation Index warns about
           going long on moves past the blue 50-day ma.

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                                              2005 - 2006   Wheat - W 1620 
                  I would not buy in December when prices cross the 50-day ma; the Tiger Accumulation
             Index has been far too negative.    The next pullback towards the 50 day ma with the Accumulation
             Index having turned positive does represent a good Buy.for a quick trade back to the resistance
             at 348.  One could reasonably Buy on the breakout over 360 but the Accumulation Index has
             weakened substantially, so that this is viewed as only a quick trade to be sold as soon as the
             red 21-day ma is violated.

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                                            2006   Wheat - W 1620

                   The September breakout was accompanied by a very negative Accumulation
             Index.  I would not have bought this breakout.  But I would also not have shorted
             it until prices were much higher.  Breakouts past a line srawn so precisely through 3
             separateshould be respected.  Note the bottoms kept rising.  

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                                            2006 - 2007   Wheat- W 1620 

                         Sometimes prices rise without prior or accompanying high Accumulation.
                   In that case, we would normally expect to see hte OBV Line rising steeply.
                   This means there are no dips to buy patiently.  Aggressive buying is predominates.
                   Look closely and you will see a gap on high volume in June.  After such a long
                   sidewise pattern, the breakout must be respected.  The high volume gap and strong
                   OBV can be taken as a Buy, but added care must be taken.

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