The Swiss Market index is set up for a potential long position.

Here's why:

Since establishing a major multi-year low in March of 2003, the Swiss Market index has been in a bull market for over three and a half years and it even reached a new all-time high in October. During this run up, the market has broken a previous month's low eight different times in forty-four months (two of the breaks were less than five points below the previous month's low). Previously, when this index broke a previous month's low, a bounce afterward provided an ideal entry set-up and the low of the correction could have been used for a logical stop order placement. The Swiss Market index has just traded below the previous month's low again. It also pulled back to technical support at the weekly 18-bar Moving Average. Since the Swiss Market index has made lower weekly highs for four consecutive weeks it may be prudent to wait for a break above a previous week's high to get long.

Swiss Market index - Place an order to buy a EUREX March Swiss Market index futures contract @ 861.70 on a stop. If filled, place an open protective sell stop @ 838.20 or two full points below the low of the week, whichever is lower. Work the order good thru Friday, December 15th. The margin requirement to initiate this trade is currently 4,200 Swiss franc ($3,493). The approximate risk on this trade is currently 2,350 Swiss francs ($1,955) plus commissions. However, the actual risk could be greater due to gap openings or price slippage on filled orders and exchange rate fluctuations on the Swiss franc.

Be aware that the risk could be substantially greater due to gap openings or slippage on filled orders. Also, if the position is stopped out, be prepared for a possible order to re-enter the market. We may consider adding to the position if the market continues to climb and the protective sell stops are trailed.

Disclaimer: There is risk of loss in all commodity trading. The data contained are believed to be reliable, but have not been independently verified by Pearce Financial. Accordingly, such data cannot be guaranteed as to reliability, accuracy, or completeness, and as such are subject to change without notice. Pearce Financial will not be responsible for any indirect, compensatory, or consequential damages, including loss of profits which may result from reliance on this data. Pearce Financial and/or its Principals and employees may or may not follow strictly any or all of the trading recommendations contained herein. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

© 2006 Pearce Financial, LLC
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