The COSMIC Speculator will help YOU Make Better Trade Choices

Look for it over on the Weekend

Commodities

Options

Stocks

Metals

Interest

Currency

C

O

S

M

I

C

Commodities Futures

Options on Futures

Stock Index Futures

Metals Futures

Interest Rate Bond Futures

Currency Futures

We trade the 1^st 2 hours after the NY Open… then we’re DONE for the day the day!

For your own protection, trade only one of the above until you master  its trading behavior...

Matt Reynolds is The COSMIC Speculator, our leader; our guru. He enjoys an established following in his Daily Live Trading Room but recognizes that not all traders have sufficient time to join in because of their demanding work.  To help folks with the means but not the time, we forecast high probability trade opportunities from weekend analysis based on broader time frames.  Trade ideas are delivered on the weekend.  Enter only if certain conditions materialize.  Each high probability trade opportunity will be delivered complete with profit target, exit area and stop limit. The Speculator Report will help you focus on the right stuff… the highest probability action.

COSMIC:  As recently as a year ago, except for index futures, commodities were primarily pit traded requiring special handling by brokers on the exchange floor's order desk… a world of professionals working for the rich and famous.  Orders were called in to the floor by the speculators. There was very little mouse clicking going on.  This is no longer true! Today, we execute commodity trades with mouse clicks just like we traded the eMini S&P since 1998.  Using rapid action leverage, commodity traders [you and me] are able to generate about five times the reward as stock traders… using an equivalent capital base. 

There are 5 commodity exchanges specializing in these entities:

While commodities like beans, cotton, corn and wheat have risen in value as The BRIC Countries [ Brazil , Russia , India and China ] emerged increasing demand on world markets, we sit by and watch those market reports on the evening news.  Traders are not well suited to trade everything available to trade just because they are traders. Traders need specialties!

The COSMIC Speculator, Matt Reynolds, focuses on the Russell Index Future, goes for the Gold or Copper in the Metals arena and Euro Future in Currency.  He trades beans and oil as well as interest rates.  While there are thousands of tradable stocks and options, Matt selects from the best… a few good commodities....  The highest probability rewards will be derived from identifying support and resistance in Commodities, Options, Stock Index Futures Metals, Interest Rates and Currencies.

Due to the economic growth of The BRIC Countries: Brazil , Russia , India , China , India , world consumption has dramatically increased causing a surge in world commodity prices. 

We trade these major commodity products: Crude Oil, Natural Gas, Soybeans, Cocoa , Coffee, Cotton, and Corn.  To select the best trades among these choices each week, we employ a combination of technical and fundamental analysis.  Our objective is to position trade the prevailing trend of these markets; however, we may recommend some counter trend trades when markets are at extremes [support or resistance].

Our indicators are good at generating specific technical signals of retracement.  Sometimes, we see a substantial amount of money flow occurring from commercial interests as indicated by the commitment of traders [COT] report.  If you are a large speculator, unlike us, the Commodities Futures Trading Commission [CFTC] requires reporting of major holdings of one commodity. 

When position trading, longer time frame charts are viewed to recognize patterns that could materialize into high probability trades.  For example: monthly, weekly and daily and, sometimes, hourly charts are watched.  We look confluence among multiple time frames that are all generating signals in the direction of the trend and we use multiple support/multiple resistance, on multiple time frames to get into the market. 

Even though we conduct our in-depth research over the weekend for reporting to you on Sunday when the markets are still, the entries we forecast may not materialize on Monday or Tuesday.  Sometimes the condition triggers on Wednesday or Thursday but perhaps never.  Not all setups trigger!

We look to confirm the generated signal with COT and supply and demand ranges.  Once we have determined our current direction and possible entry price, we shift to a 21 minute chart to pinpoint entry by applying the Derivative Concepts Zone-Trader Philosophy while viewing our proprietary indicator called volatility measurement built from volume and open interest [VMI-VOI].

An option gives a trader the right to buy or sell the underlying instrument at the strike price, within a specific period of time.  A call option gives the trader the right to buy an entity and a put option gives the trader the right to sell something. 

Financial Engineering is the practice of using derivatives as building blocks to create specialized products.  As the field of financial engineering has grown, the use of options to create synthetic positions and to hedge cash positions has tremendously expanded. 

A Synthetic Position is the simultaneous buying and selling of opposite options.  For example: if a trader feels that the price of the underlying instrument is going to decrease but does not want to take a short position in fear of a short-term rally, he or she could buy one put and sell one call at different strike prices and time frame.  This creates a synthetic short position with less risk.  The premium is the price of the option and is composed of two elements: intrinsic value and time value.  An option is said to have intrinsic value if the option is in-the-money. When out-of-the-money, its intrinsic value is zero.

The intrinsic value for an in-the-money option is calculated as the absolute value of the difference between the current price (S) of the underlying and the strike price (K) of the option, floored to zero.

IV = max{0, | S − K | }

More specifically, for a call option IV_call = max{0,S − K}

while for a put option Input = max{0,K − S}

For example, if the strike price for a call option is USD 1 and the price of the underlying is USD 1.20, then the option has an intrinsic value of USD 0.20.

The total value of an option is the sum of its intrinsic value and its time value (intrinsic  value 9). We prefer to use options in several strategies from creating artificial stops, to taking advantage of markets that are at extremes, and to generate consistent profit by writing options that are counter trend, which are selected by using delta and applying some specific formulas to the option Greek.  The delta measures the sensitivity to changes in the price of the underlying asset. The Δ of an instrument is the mathematical derivative of the option value V with respect to the underlyer's price: 

COSMIC:  Stock index futures are used for hedging, spreading & speculating. Hedging using stock index futures involves hedging against a stock portfolio or equity index options.

Generally, we are speculators avoiding stock because of the huge capital requirements.  Instead, we trade Stock Index Futures, generally, The Russell 2000.  This Index Future enjoys a much improved probability of higher reward by entering near support [buy] or resistance [sell] points.  Holding periods range from 3 hours to 3 days. However, the typical holding period for The COSMIC Speculator is a few days. To populate The COSMIC Speculator we analyze daily, weekly, monthly charts to collect inflection areas, not specific points, and then apply propriety indicators to pinpoint estimated entry levels and exit targets together with stop loss in event our trade wanders.

The main U.S. index is the Russell 3000 Index, which is divided into several sub-indexes, including the well-known small-cap Russell 2000 Index, the bottom 2,000 (the smallest companies) make up the small-cap Russell 2000. It’s this Russell 2000 iFuture that we favor and trade from the New York open during only the 1^st 2 hours.

Trading using stock index futures involves volatility (the greater the volatility, the greater the likelihood of rapid reward – usually taking relatively small but regular rewards. Investing via Stock Index Futures involves exposure to a market or sector without having to actually purchase shares directly.

The S&P 500 is the stock index containing the stocks of 500 Large-Cap corporations. The index is the most notable of the many indices owned and maintained by Standard & Poor's. After the Dow Jones Industrial Average, the S&P 500 is the most widely watched and traded index. It is considered to be a bellwether for the US economy.

But we have learned that, while the S&P 500 is the most popular, the Russell 2000 is a better trading vehicle. The Russell's family of global equity indexes, including the industry-leading U.S. equity indexes, allows investors to track the performance of distinct market segments worldwide.  And, the price per point is $100, where the eMini S&P is only $50.  Since both Index Futures move in tandem… one follows the other, why not trade the higher price spread!

Many investment managers use the Russell Indexes as benchmarks to measure their own performance. Russell's innovative index design has led to more assets benchmarked to its U.S. index family than all other U.S. equity indexes combined. As of May 2007, Russell's indexes had US$4 trillion in assets benchmarked to them.

Equity index futures and options tend to trade in liquid markets and deliver in cash. Indices for futures are well-established:  S&P, Russell, FTSE ]British], DAX [German], CAC40 [French] and other G12 country indices.

COSMIC:  Precious Metals maintain an intrinsic value and should be a part of a major portfolio.  Precious metals, especially gold, can be used to hedge against the decline of the dollar, which has sparked an increase in the volume within metals futures and the creation of the mini gold and mini silver products.  Metals volume also has increased as a result of Global economic growth, especially, The BRIC Countries: Brazil , Russia , India and China .  This economic growth engine is creating greater demand for copper, iron, steel and silver. 

Gold has been the most sought after metal in the world for hundreds of years.  Gold has a unique blend of rarity and is seen as a flight to safety or a hedge against day-to-day uncertainties of paper money.  Gold also plays a role in industrial markets, due to its ability to conduct electricity and its non-corrosive properties. 

Silver is the most consumed PRECIOUS metal of industrial raw material.  Major industrial usages of silver are: photographic, jewelry, and, most of all, electronics. For example, computer screens contain silver.  Unlike gold, most silver placed into industrial material is consumed and not always recoverable.  This makes the price of the metal highly responsive to supply and demand dynamics.