Friday, May 31, 2013

Pre-Market Global Review - 5/31/13 - Market Manipulation Rides High

Good Morning Traders,
 
As of this writing 5:30 AM EST, here’s what we see:
 
US Dollar –Up at 83.295, the US Dollar is up 228 ticks and is trading at 83.295.             
Energies – July Oil is down at 92.80.        
Financials – The June 30 year bond is up 24 ticks and is trading at 142.08.      
Indices – The June S&P 500 emini ES contract is down at 1642.00 and is down 46 ticks.  
Gold – The June gold contract is trading up at 1412.3 and is up 8 ticks from its close.
 
Initial Conclusion: This is a correlated market, unfortunately it is correlated to the downside.  The dollar is up+ and oil is down- which is normal and the 30 year bond is trading higher.  The Financials should always correlate with the US dollar such that if the dollar is lower then bonds should follow and vice versa.  The indices are down  and the US dollar is trading higher which is correlated.  Gold is trading higher which is not correlated with the US dollar trading higher.   I tend to believe that Gold has an inverse relationship with the US Dollar as when the US Dollar is down, Gold tends to rise in value and vice-versa. Think of it as a seesaw, when one is up the other should be down.   I point this out to you to make you aware that when we don't have a correlated market, it means something is wrong.  As traders you need to be aware of this and proceed with your eyes wide open. 
All of Asia closed lower except the Nikkei which gained 186 points.  As of this writing all of Europe is trading lower.
 
 
Possible challenges to traders today is the following            
1.  Core PCE Price Index is out at 8:30 AM EST.  This is not major.        
2.  Personal Spending is out at 8:30 AM EST.  This is major.  

3.  Personal Income is out at 8:30 AM EST.  This is major.
4.  Chicago PMI is out at 9:45 AM EST.  This is major.  
5.  Revised UOM Consumer Sentiment is out at 9:55 AM EST.  This is not major.
6.  Revised UOM Inflation Expectations is out at 9:55 AM EST.  This is not major.

Yesterday we said our bias was to the downside as the markets weren't correlated and the Nikkei exchange fell by 737 points.  The Smart Money however had other plans.  After losing 106 points on Wednesday, the markets rebounded and closed higher.  The Dow gained 22 points and the indices closed higher.  Today we are  dealing with a correlated market however it is correlated to the downside hence our bias is to the downside.  Bear in mind that we have 4 major economic reports which could drive the markets in any direction today.   Could this change? Of Course.  Remember anything can happen in a volatile market.

Yesterday we had 6 economic reports, 4 of which were major.  I cannot help but be suspicious when those economic reports come in below expectations, yet the markets advance.  If you read the headlines today you'd think we no longer have a housing problem, yet the same people who wrote that omitted one vital fact: the reported number came in below expectation.  In fact all of the numbers today came in below expectation:


 - GDP - 2.4% versus 2.5% expected
 - Unemployment Claims - 354,000 vs 342,000 expected

 - Pending Home Sales - 0.3 percent versus 1.3 percent expected
Yet the markets rose.  Ask yourself a question: if this isn't market manipulation then what is it?  Under any normal circumstance this market would have dropped like a rock yesterday.  Yet it advanced.  Understand that when the Smart Money aka institutionals decide that the market is going up, it's going up.  When they trade, they don't trade ten contracts, they trade thousands at a clip regardless of whether or not it's justified.  Don't think for one second that they don't manipultae headlines either.  One headline read "It's Official, Housing Crisis Over."  Oh really.  I have a house right next door to me that's been vacant for 5 years and Bank of America can't figure out what to do with it.  Don't think the Smart Money can manipulate headlines?  The very article associated with this newsletter on Binary Options has been presented to every major publication and has all been rejected.  Why?  Could it be that their advertisers don't want people to know there's a better mouse trap?  My, my what a coincidence....

As readers are probably aware I don't trade equities.   While we're on this discussion, let's define what is meant by a good earnings report.  A company must exceed their prior quarter's earnings per share and must provide excellent forward guidance.  Any falloff between earning per share or forward guidance will not bode well for the company's shares.  This is one of the reasons I don't trade equities but prefer futures.  There is no earnings reports with futures and we don't have to be concerned about lawsuits, scandals, malfeasance, etc.
 
Anytime the market isn't correlated it's giving you a clue that something isn't right and you should proceed with caution. Today our bias is to the downside.  Could this change?  Of course.  In a volatile market anything can happen.  We'll have to monitor and see.  

In April I had the opportunity to interview Mr. Dan Cook, Director of Business Development for Nadex.com  Nadex is an exchange that is devoted solely to binary options.  Recently there's been quite a bit of misinformation regarding Binary Options and how they work.  Some have even speculated that opening a Binary Option trading account is the same as identity theft.  My objective is to dispel these myths and to alert the retail trader as to what a binary option is, how to trade them, how to amend an order and how to exit a trade for profit.  Nadex is a Chicago based exchange that abides by the rules of CFTC.  I've created an eBook that will discuss and show how a trader can capitalize on this innovative instrument.  This is an 8 page eBook loaded with charts, diagrams etc.  Each chart/diagram shown has been approved by Nadex and has gone thru their compliance department.  When last I heard compliance departments for exchanges are tough when it comes to misrepresentation.  Feel free to download and to share with those you know.  It's time we saw some innovation.... To View and Download this article, go to:
  https://markettealeaves.sharefile.com/d/s59fb4ac49ca47508

My interview with Dan can be viewed at:
http://youtu.be/ENRRbwH6A_o
 
Please note the video is about a half hour in length and we plan on producing more in the near future.  Also note that in the near future we will have other videos where we will interview various trading leaders.




As I write this the crude markets are trading lower and the US Dollar is advancing.  This is normal.  Think of it this way.  If the stock market is trading lower, it's safe to assume that the crude market will follow suit and vice versa.  Crude trades with the expectation that business activity is expanding.  The barometer of which is the equities or stock market.  If you view both the crude and index futures side by side you will notice this. Yesterday July crude dropped to a low of 91.76 a barrel and held.  We'll have to monitor and see if crude either goes lower or holds at the present level.   It would appear at the present time that crude has support at 91.00 a barrel and resistance at 96.  This could change.  All we need do is look at what happened last fall when crude was trading over $100.00 a barrel. We'll have to monitor and see.  Remember that crude is the only commodity that is reflected immediately at the gas pump.


Future Challenges:
- Budget Battle - ongoing.
- Debt Ceiling in the August time frame.      
- European Contraction - happening now 


Crude oil is trading lower and the US Dollar is advancing.  This is normal.  Crude typically makes 3 major moves (long or short) during the course of any trading day: around 7 AM EST, 9 AM EST and 2 PM EST when the crude market closes.  If crude makes major moves around those time frames, then this would suggest normal trending, if not it would suggest that something is not quite right.  If you feel compelled to trade consider doing so after 10 AM when economic numbers are released and the markets give us better direction.  As always watch and monitor your order flow as anything can happen in this market.  This is why monitoring order flow in today's market is crucial.  We as traders are faced with numerous challenges that we didn't have a few short years ago.  High Frequency Trading is one of them.   I'm not an advocate of scalping however in a market as volatile as this scalping is an alternative to trend trading.

Recently Published Articles:      
http://www.investing.com/analysis/rockwell-trading-ceo-heitkoetter:-a-simple,-timeless-trading-strategy-166093   

http://www.barchart.com/headlines/story/10110400/leadership-or-lack-thereof
http://www.barchart.com/headlines/story/9971005/german-factory-orders-up-us-down








 

 






Remember that without knowledge of order flow we as traders are risking our hard earned capital and the Smart Money will have no issue taking it from us.  Regardless of whatever platform you use for trading purposes you need to make sure it's monitoring order flow.  Sceeto does an excellent job at this.  To fully capitalize on this newsletter it is important that the reader understand how the various market correlate.  More on this in subsequent blogs.

Thursday, May 30, 2013

Pre-Market Global Review - 5/30/13 - One Day Does Not a Rally Make

Good Morning Traders,
 
As of this writing 5:30 AM EST, here’s what we see:
 
US Dollar –Down at 83.420, the US Dollar is down 285 ticks and is trading at 83.420.             
Energies – July Oil is down at 92.45.        
Financials – The June 30 year bond is up 6 ticks and is trading at 142.26.      
Indices – The June S&P 500 emini ES contract is down at 1643.00 and is down 16 ticks.  
Gold – The June gold contract is trading up at 1407.01 and is up 158 ticks from its close.
 
Initial Conclusion: This is not a correlated market.  The dollar is down- and oil is down- which is not normal but the 30 year bond is trading higher.  The Financials should always correlate with the US dollar such that if the dollar is lower then bonds should follow and vice versa.  The indices are down  and the US dollar is trading lower which is not correlated.  Gold is trading higher which is correlated with the US dollar trading lower.   I tend to believe that Gold has an inverse relationship with the US Dollar as when the US Dollar is down, Gold tends to rise in value and vice-versa. Think of it as a seesaw, when one is up the other should be down.   I point this out to you to make you aware that when we don't have a correlated market, it means something is wrong.  As traders you need to be aware of this and proceed with your eyes wide open. 
All of Asia closed lower with the Nikkei down 737 points.  As of this writing Europe is trading mixed with the German DAX down and London and Paris trading fractionally higher.
 
 
Possible challenges to traders today is the following            
1.  Preliminary GDP is out at 8:30 AM EST.  This is major.        
2.  Preliminary GDP Price Index is out at 8:30 AM EST.  This is major. 
3.  Unemployment Claims are out at 8:30 AM EST.  This is major.
4.  Pending Home Sales are out at 10 AM EST.  This is major.
5.  Natural Gas Storage is out at 10:30 AM EST.  This will move the Nat Gas market.
6.  Crude Oil Inventories are out at 11 AM EST.  This will move the crude market.

Yesterday we said our bias was to the downside as it's only natural that the Smart Money will take capital off the table after a large run up.  The net result?  The Dow dropped 106 points and all the indices closed lower.  Today we are not dealing with a correlated market and our bias is to the downside.  Why?  All of Asia closed lower, currently Europe is trading mixed, the Bonds are higher which is not bullish for the markets and Gold is trading above 1400 an ounce which we haven't seen in awhile.  This would suggest that the fear factor has returned.   Could this change? Of Course.  Remember anything can happen in a volatile market.

As expected the markets moved lower yesterday after a massive run up on Tuesday.  All indices closed lower and there was no major economic news.  It seemed as though the fear factor returned to the markets as Gold traded higher yesterday.  If you read the headlines they all seemed to be fearful of the Fed pulling the plug on QE3.  The fact is we do not know that nor do we know when or if the Fed will do so. Much of this will be determined as economic reports come in and additional I suspect that later in the summer; probably around late August we will see a showdown in DC over the budget as what we have now will expire on September 30th to coincide with the fiscal year.  I'm not so certain that the Fed will want to slowdown anything until this issue is resolved.  Today we have 4 major economic reports that can drive the markets in any direction.  Be mindful of this if trading today.
 
As readers are probably aware I don't trade equities.   While we're on this discussion, let's define what is meant by a good earnings report.  A company must exceed their prior quarter's earnings per share and must provide excellent forward guidance.  Any falloff between earning per share or forward guidance will not bode well for the company's shares.  This is one of the reasons I don't trade equities but prefer futures.  There is no earnings reports with futures and we don't have to be concerned about lawsuits, scandals, malfeasance, etc.
 
Anytime the market isn't correlated it's giving you a clue that something isn't right and you should proceed with caution. Today our bias is to the downside.  Could this change?  Of course.  In a volatile market anything can happen.  We'll have to monitor and see.  

In April I had the opportunity to interview Mr. Dan Cook, Director of Business Development for Nadex.com  Nadex is an exchange that is devoted solely to binary options.  Recently there's been quite a bit of misinformation regarding Binary Options and how they work.  Some have even speculated that opening a Binary Option trading account is the same as identity theft.  My objective is to dispel these myths and to alert the retail trader as to what a binary option is, how to trade them, how to amend an order and how to exit a trade for profit.  Nadex is a Chicago based exchange that abides by the rules of CFTC.  I've created an eBook that will discuss and show how a trader can capitalize on this innovative instrument.  This is an 8 page eBook loaded with charts, diagrams etc.  Each chart/diagram shown has been approved by Nadex and has gone thru their compliance department.  When last I heard compliance departments for exchanges are tough when it comes to misrepresentation.  Feel free to download and to share with those you know.  It's time we saw some innovation....
To View and Download this article, go to:
  https://markettealeaves.sharefile.com/d/s59fb4ac49ca47508

My interview with Dan can be viewed at:
http://youtu.be/ENRRbwH6A_o
 
Please note the video is about a half hour in length and we plan on producing more in the near future.  Also note that in the near future we will have other videos where we will interview various trading leaders.




As I write this the crude markets are trading lower and the US Dollar is declining.  This is not normal.  Think of it this way.  If the stock market is trading lower, it's safe to assume that the crude market will follow suit and vice versa.  Crude trades with the expectation that business activity is expanding.  The barometer of which is the equities or stock market.  If you view both the crude and index futures side by side you will notice this. Yesterday July crude dropped to a low of 92.72 a barrel and held.  Currently is trading at around the 92.45 a barrel mark and was actually lower this morning.  We'll have to monitor and see if crude either goes lower or holds at the present level.   It would appear at the present time that crude has support at 92.00 a barrel and resistance at 98.  This could change.  All we need do is look at what happened last fall when crude was trading over $100.00 a barrel. We'll have to monitor and see.  Remember that crude is the only commodity that is reflected immediately at the gas pump.


Future Challenges:
- Budget Battle - ongoing.
- Debt Ceiling in the August time frame.      
- European Contraction - happening now 


Crude oil is trading lower and the US Dollar is declining.  This is not normal.  Crude typically makes 3 major moves (long or short) during the course of any trading day: around 7 AM EST, 9 AM EST and 2 PM EST when the crude market closes.  If crude makes major moves around those time frames, then this would suggest normal trending, if not it would suggest that something is not quite right.  If you feel compelled to trade consider doing so after 11 AM when the inventory numbers are released and the markets give us better direction.  As always watch and monitor your order flow as anything can happen in this market.  This is why monitoring order flow in today's market is crucial.  We as traders are faced with numerous challenges that we didn't have a few short years ago.  High Frequency Trading is one of them.   I'm not an advocate of scalping however in a market as volatile as this scalping is an alternative to trend trading.

Recently Published Articles:      
http://www.investing.com/analysis/rockwell-trading-ceo-heitkoetter:-a-simple,-timeless-trading-strategy-166093 http://www.barchart.com/headlines/story/10110400/leadership-or-lack-thereof
http://www.barchart.com/headlines/story/9971005/german-factory-orders-up-us-down














Remember that without knowledge of order flow we as traders are risking our hard earned capital and the Smart Money will have no issue taking it from us.  Regardless of whatever platform you use for trading purposes you need to make sure it's monitoring order flow.  Sceeto does an excellent job at this.  To fully capitalize on this newsletter it is important that the reader understand how the various market correlate.  More on this in subsequent blogs.

Wednesday, May 29, 2013

Pre-Market Global Review - 5/29/13 - Demystifying Binaries

Good Morning Traders,
 
As of this writing 4:40 AM EST, here’s what we see:
 
US Dollar –Down at 84.070, the US Dollar is down 117 ticks and is trading at 84.070.             
Energies – July Oil is down at 94.29.        
Financials – The June 30 year bond is down 22 ticks and is trading at 140.17.      
Indices – The June S&P 500 emini ES contract is down at 1648.75 and is down 23 ticks.  
Gold – The June gold contract is trading up at 1386.00 and is up 74 ticks from its close.
 
Initial Conclusion: This is not a correlated market.  The dollar is down- and oil is down- which is not normal and the 30 year bond is trading lower.  The Financials should always correlate with the US dollar such that if the dollar is lower then bonds should follow and vice versa.  The indices are down  and the US dollar is trading lower which is not correlated.  Gold is trading higher which is correlated with the US dollar trading lower.   I tend to believe that Gold has an inverse relationship with the US Dollar as when the US Dollar is down, Gold tends to rise in value and vice-versa. Think of it as a seesaw, when one is up the other should be down.   I point this out to you to make you aware that when we don't have a correlated market, it means something is wrong.  As traders you need to be aware of this and proceed with your eyes wide open. 
Asia closed mixed with the Nikkei and Shanghai exchanges closing slightly higher and the rest Asia closed down.  As of this writing all Europe trading lower.
 
 
Possible challenges to traders today is the following            
1.  No Economic News.        
2.  Lack of Major economic news.
 
3.  FOMC member Rosengren speaks at 1 PM EST.  This is not major.

Yesterday we said our bias was to the upside as the markets generally tend to move higher after a 3 day holiday weekend.  The net result?  The Dow gained 106 points and all the indices closed higher.  Today we are not dealing with a correlated market, therefore our bias is to the downside today. Why?  Most of Asia closed lower and currently Europe is trading lower.  We think the Smart Money will be looking to take money off the table, at least initially.     Could this change? Of Course.  Remember anything can happen in a volatile market.
 
As expected the markets moved higher yesterday after a 3 day holiday weekend.  All indices moved up and was assisted by good economic news.  The Home Price Index rose by more than 10 percent and Consumer Confidence beat expectations.  The drawback was the Richmond Manufacturing Index which fell.  This was interesting because Newport News is considered in that report, Newport News is the place where heavy shipbuilding is constructed.  Could it be that the sequester is having an impact on defense shipbuilding?  In any case at it's height the Dow rose by more than 200 points.

 
As readers are probably aware I don't trade equities.   While we're on this discussion, let's define what is meant by a good earnings report.  A company must exceed their prior quarter's earnings per share and must provide excellent forward guidance.  Any falloff between earning per share or forward guidance will not bode well for the company's shares.  This is one of the reasons I don't trade equities but prefer futures.  There is no earnings reports with futures and we don't have to be concerned about lawsuits, scandals, malfeasance, etc.
 
Anytime the market isn't correlated it's giving you a clue that something isn't right and you should proceed with caution. Today our bias is to the downside.  Could this change?  Of course.  In a volatile market anything can happen.  We'll have to monitor and see.  

In April I had the opportunity to interview Mr. Dan Cook, Director of Business Development for Nadex.com  Nadex is an exchange that is devoted solely to binary options.  Recently there's been quite a bit of misinformation regarding Binary Options and how they work.  Some have even speculated that opening a Binary Option trading account is the same as identity theft.  My objective is to dispel these myths and to alert the retail trader as to what a binary option is, how to trade them, how to amend an order and how to exit a trade for profit.  Nadex is a Chicago based exchange that abides by the rules of CFTC.  I've created an eBook that will discuss and show how a trader can capitalize on this innovative instrument.  This is an 8 page eBook loaded with charts, diagrams etc.  Each chart/diagram shown has been approved by Nadex and has gone thru their compliance department.  When last I heard compliance departments for exchanges are tough when it comes to misrepresentation.  Feel free to download and to share with those you know.  It's time we saw some innovation....

To View and Download this article, go to:
  https://markettealeaves.sharefile.com/d/s59fb4ac49ca47508

My interview with Dan can be viewed at:

http://youtu.be/ENRRbwH6A_o
 

Please note the video is about a half hour in length and we plan on producing more in the near future.  Also note that in the near future we will have other videos where we will interview various trading leaders.




As I write this the crude markets are trading lower and the US Dollar is declining.  This is not normal.  Think of it this way.  If the stock market is trading lower, it's safe to assume that the crude market will follow suit and vice versa.  Crude trades with the expectation that business activity is expanding.  The barometer of which is the equities or stock market.  If you view both the crude and index futures side by side you will notice this. Yesterday July crude dropped to a low of 93.54 a barrel and held.  Currently is trading at around the 94.50 a barrel mark and was actually lower this morning.  We'll have to monitor and see if crude either goes lower or holds at the present level.   It would appear at the present time that crude has support at 92.00 a barrel and resistance at 98.  This could change.  All we need do is look at what happened last fall when crude was trading over $100.00 a barrel. We'll have to monitor and see.  Remember that crude is the only commodity that is reflected immediately at the gas pump.


Future Challenges:
- Budget Battle - ongoing.
- Debt Ceiling in the August time frame.      
- European Contraction - happening now 


Crude oil is trading lower and the US Dollar is declining.  This is not normal.  Crude typically makes 3 major moves (long or short) during the course of any trading day: around 7 AM EST, 9 AM EST and 2 PM EST when the crude market closes.  If crude makes major moves around those time frames, then this would suggest normal trending, if not it would suggest that something is not quite right.  If you feel compelled to trade consider doing so after 10 AM when the markets give us better direction.  As always watch and monitor your order flow as anything can happen in this market.  This is why monitoring order flow in today's market is crucial.  We as traders are faced with numerous challenges that we didn't have a few short years ago.  High Frequency Trading is one of them.   I'm not an advocate of scalping however in a market as volatile as this scalping is an alternative to trend trading.

Recently Published Articles:      
http://www.investing.com/analysis/rockwell-trading-ceo-heitkoetter:-a-simple,-timeless-trading-strategy-166093 http://www.barchart.com/headlines/story/10110400/leadership-or-lack-thereof
http://www.barchart.com/headlines/story/9971005/german-factory-orders-up-us-down













Remember that without knowledge of order flow we as traders are risking our hard earned capital and the Smart Money will have no issue taking it from us.  Regardless of whatever platform you use for trading purposes you need to make sure it's monitoring order flow.  Sceeto does an excellent job at this.  To fully capitalize on this newsletter it is important that the reader understand how the various market correlate.  More on this in subsequent blogs.

Tuesday, May 28, 2013

Pre-Market Global Review - 5/28/13 - Dispelling the Myths on Binary Options

Good Morning Traders,
 
As of this writing 4:15 AM EST, here’s what we see:
 
US Dollar –Up at 83.995, the US Dollar is up 237 ticks and is trading at 83.995.             
Energies – July Oil is up at 94.46.        
Financials – The June 30 year bond is down 23 ticks and is trading at 142.21.      
Indices – The June S&P 500 emini ES contract is up at 1663.25 and is up 51 ticks.  
Gold – The June gold contract is trading down at 1385.00 and is down 16 ticks from its close.
 
Initial Conclusion: This is not a correlated market.  The dollar is up+ and oil is up+ which is not normal and the 30 year bond is trading lower.  The Financials should always correlate with the US dollar such that if the dollar is lower then bonds should follow and vice versa.  The indices are up  and the US dollar is trading higher which is not correlated.  Gold is trading lower which is correlated with the US dollar trading higher.   I tend to believe that Gold has an inverse relationship with the US Dollar as when the US Dollar is down, Gold tends to rise in value and vice-versa. Think of it as a seesaw, when one is up the other should be down.   I point this out to you to make you aware that when we don't have a correlated market, it means something is wrong.  As traders you need to be aware of this and proceed with your eyes wide open. 
All of Asia closing higher.  As of this writing all Europe trading higher.
 
 
Possible challenges to traders today is the following            
1.  S&P/CS Composite-20 HPI y/y is out at 9 AM EST.  This is major.        
2.  CB Consumer Confidence is out at 10 AM EST.  This is major.

3.  Richmond Manufacturing Index is out at 10 AM EST.  This is major.

Last Friday we said our bias was to the downside as the markets were correlated as such.  Additionally Europe was trading lower and subsequently closed down.  However it would appear as though the Smart Money wanted to end the session on an upbeat and after having traded down most of the day, in the last 10 minutes of trading the Dow closed up 9 points, the Nasdaq closed flat and the S&P closed down 1.  Amazing what the Smart Money can do when they put their minds to it.   Today we are not dealing with a correlated market.  However our bias is to the upside today. Why?  All of Asia closed higher and currently Europe is trading higher to the tune of triple digits.  Additionally The Bonds are trading lower which is bullish for the markets and indices.  Lastly, traditionally after a 3 day weekend the markets generally lean to the upside as there is pent up demand after a holiday.   Could this change? Of Course.  Remember anything can happen in a volatile market.
  

It was pretty much a down session on Friday as we suspected it would be.  The markets remained down up till the last 10 minutes or so of trading.  So I guess no one wanted to go on a long 3 day weekend without an upbeat.  This week starts the unofficial summer trading season and whereas in the past the rule of thumb has been "sell in May and go away"; the last couple of years have dispelled this.  As always, we'll have to monitor and see.

As readers are probably aware I don't trade equities.   While we're on this discussion, let's define what is meant by a good earnings report.  A company must exceed their prior quarter's earnings per share and must provide excellent forward guidance.  Any falloff between earning per share or forward guidance will not bode well for the company's shares.  This is one of the reasons I don't trade equities but prefer futures.  There is no earnings reports with futures and we don't have to be concerned about lawsuits, scandals, malfeasance, etc.
 
Anytime the market isn't correlated it's giving you a clue that something isn't right and you should proceed with caution. Today our bias is to the upside.  Could this change?  Of course.  In a volatile market anything can happen.  We'll have to monitor and see.  

In April I had the opportunity to interview Mr. Dan Cook, Director of Business Development for Nadex.com  Nadex is an exchange that is devoted solely to binary options.  Recently there's been quite a bit of misinformation regarding Binary Options and how they work.  Some have even speculated that opening a Binary Option trading account is the same as identity theft.  My objective is to dispel these myths and to alert the retail trader as to what a binary option is, how to trade them, how to amend an order and how to exit a trade for profit.  Nadex is a Chicago based exchange that abides by the rules of CFTC.  I've created an eBook that will discuss and show how a trader can capitalize on this innovative instrument.  This is an 8 page eBook loaded with charts, diagrams etc.  Each chart/diagram shown has been approved by Nadex and has gone thru their compliance department.  When last I heard compliance departments for exchanges are tough when it comes to misrepresentation.  Feel free to download and to share with those you know.  It's time we saw some innovation....

To View and Download this article, go to:
  https://markettealeaves.sharefile.com/d/s59fb4ac49ca47508

My interview with Dan can be viewed at:


http://youtu.be/ENRRbwH6A_o
 


Please note the video is about a half hour in length and we plan on producing more in the near future.  Also note that in the near future we will have other videos where we will interview various trading leaders.




As I write this the crude markets are trading higher and the US Dollar is advancing.  This is not normal.  Think of it this way.  If the stock market is trading lower, it's safe to assume that the crude market will follow suit and vice versa.  Crude trades with the expectation that business activity is expanding.  The barometer of which is the equities or stock market.  If you view both the crude and index futures side by side you will notice this. On Friday July crude dropped to a low of 93.04 a barrel and held.  Currently is trading at around the 94.50 a barrel mark and was actually lower this morning.  We'll have to monitor and see if crude either goes lower or holds at the present level.   It would appear at the present time that crude has support at 92.00 a barrel and resistance at 98.  This could change.  All we need do is look at what happened last fall when crude was trading over $100.00 a barrel. We'll have to monitor and see.  Remember that crude is the only commodity that is reflected immediately at the gas pump.


Future Challenges:
- Budget Battle - ongoing.
- Debt Ceiling in the August time frame.      
- European Contraction - happening now 


Crude oil is trading lower and the US Dollar is advancing.  This is not normal.  Crude typically makes 3 major moves (long or short) during the course of any trading day: around 7 AM EST, 9 AM EST and 2 PM EST when the crude market closes.  If crude makes major moves around those time frames, then this would suggest normal trending, if not it would suggest that something is not quite right.  If you feel compelled to trade consider doing so after 10 AM when the markets give us better direction.  As always watch and monitor your order flow as anything can happen in this market.  This is why monitoring order flow in today's market is crucial.  We as traders are faced with numerous challenges that we didn't have a few short years ago.  High Frequency Trading is one of them.   I'm not an advocate of scalping however in a market as volatile as this scalping is an alternative to trend trading.

Recently Published Articles:      
http://www.investing.com/analysis/rockwell-trading-ceo-heitkoetter:-a-simple,-timeless-trading-strategy-166093 http://www.barchart.com/headlines/story/10110400/leadership-or-lack-thereof
http://www.barchart.com/headlines/story/9971005/german-factory-orders-up-us-down












Remember that without knowledge of order flow we as traders are risking our hard earned capital and the Smart Money will have no issue taking it from us.  Regardless of whatever platform you use for trading purposes you need to make sure it's monitoring order flow.  Sceeto does an excellent job at this.  To fully capitalize on this newsletter it is important that the reader understand how the various market correlate.  More on this in subsequent blogs.

Friday, May 24, 2013

Pre-Market Global Review - 5/24/13 - Worldwide Slide Hits US

Good Morning Traders,
 
As of this writing 5:25 AM EST, here’s what we see:
 
US Dollar –Down at 83.590the US Dollar is down 213 ticks and is trading at 83.590.             
Energies – July Oil is down at 94.11.        
Financials – The June 30 year bond is up 1 tick and is trading at 143.20.      
Indices – The June S&P 500 emini ES contract is down at 1649.00 and is down 4 ticks.  
Gold – The June gold contract is trading down at 1387.80 and is down 40 ticks from its close.
 
Initial Conclusion: This is not a correlated market.  The dollar is down- and oil is down- which is not normal and the 30 year bond is trading higher.  The Financials should always correlate with the US dollar such that if the dollar is lower then bonds should follow and vice versa.  The indices are down  and the US dollar is trading lower which is not correlated.  Gold is trading lower which is not correlated with the US dollar trading lower.   I tend to believe that Gold has an inverse relationship with the US Dollar as when the US Dollar is down, Gold tends to rise in value and vice-versa. Think of it as a seesaw, when one is up the other should be down.   I point this out to you to make you aware that when we don't have a correlated market, it means something is wrong.  As traders you need to be aware of this and proceed with your eyes wide open. 
Asia closing mixed with half the indices closing lower and the other half closing higher.  The Nikkei rebounded from its loss to close in positive territory.  As of this writing Europe is trading mixed with the FTSE and DAX trading lower and the rest of Europe trading higher.
 
 
Possible challenges to traders today is the following            
1.  Core Durable Goods Orders are out at 8:30 AM EST.  This is major.        
2.  Durable Goods are out at 8:30 AM EST.  This is major.

Yesterday we said our bias was to the downside as the markets were correlated as such.  Additionally all markets worldwide fell.  As such the Dow dropped 12 points which wasn't as bad as the triple and quadruple digit losses suffered by Asia and Europe.   Today we are not dealing with a correlated market.  Asia closed mixed and as of this writing Europe is trading mixed.  Therefore our bias is to the downside today.  Could this change? Of Course.  Remember anything can happen in a volatile market.
 
On Wednesday after Bernanke made his comments all markets worldwide suffered losses.  Some to the tune of quadruple losses as witnessed in Japan.  Yesterday this of course had an effect on the US exchanges as they too dropped.  However the US losses very minor compared to other regions of the world.  To anyone who thinks that markets aren't correlated, you need to think again.  We are all connected in one way, shape or form.  The US had pretty good economic reports and at first glance this would seem positive for the markets.  Unemployment Claims, New Home Sales and HPI were all good but at the end of the day market fundamentals overrode all of that.  That's the funny thing about Market Correlation, at the end of the day it's usually correct.  Today I would expect a low volume, I can't wait to get out of Dodge kind of day.  After lunchtime, I would expect traders to be heading for doors looking to start the Memorial Day Holiday a bit sooner.  This is traditionally the start of the summer trading and the question is will we see a low volume, chopfest type of season or a more robust one?  The last couple of years have been robust so as always, we'll have to monitor and see.


As readers are probably aware I don't trade equities.   While we're on this discussion, let's define what is meant by a good earnings report.  A company must exceed their prior quarter's earnings per share and must provide excellent forward guidance.  Any falloff between earning per share or forward guidance will not bode well for the company's shares.  This is one of the reasons I don't trade equities but prefer futures.  There is no earnings reports with futures and we don't have to be concerned about lawsuits, scandals, malfeasance, etc.
 
Anytime the market isn't correlated it's giving you a clue that something isn't right and you should proceed with caution. Today our bias is to the downside.  Could this change?  Of course.  In a volatile market anything can happen.  We'll have to monitor and see.  

On Wednesday, May 1st I had the opportunity to interview Markus Heitkoetter.  Markus is the CEO of Rockwell Trading and is living proof that anyone with the right mindset, desire and tenacity can be a successful trader.  He offers a 296 page eBook that can be viewed on the Rockwell Trading website.  It's entitled "The Complete Guide to Day Trading"  I recall when Markus started Rockwell years ago and was always impressed with his focus on coaching and paying attention to detail.  Once again our friends at TradersLog have agreed to publish the article and it can be viewed at: http://www.traderslog.com/interview-with-markus-heitkoetter/


The video can be viewed at:
 http://youtu.be/i-mIumI6ptU



Please note the video is about a half hour in length and we plan on producing more in the near future.  Also note that in the near future we will have other videos where we will interview various trading leaders.




As I write this the crude markets are trading lower and the US Dollar is declining.  This is not normal.  Think of it this way.  If the stock market is trading lower, it's safe to assume that the crude market will follow suit and vice versa.  Crude trades with the expectation that business activity is expanding.  The barometer of which is the equities or stock market.  If you view both the crude and index futures side by side you will notice this. Yesterday July crude dropped to a low of 92.21 a barrel and held.  Currently is trading at around the 93.00 a barrel mark and was actually lower this morning.  We'll have to monitor and see if crude either goes lower or holds at the present level.   It would appear at the present time that crude has support at 92.00 a barrel and resistance at 98.  This could change.  All we need do is look at what happened last fall when crude was trading over $100.00 a barrel. We'll have to monitor and see.  Remember that crude is the only commodity that is reflected immediately at the gas pump.


Future Challenges:
- Budget Battle - ongoing.
- Debt Ceiling in the August time frame.      
- European Contraction - happening now 


Crude oil is trading lower and the US Dollar is declining.  This is not normal.  Crude typically makes 3 major moves (long or short) during the course of any trading day: around 7 AM EST, 9 AM EST and 2 PM EST when the crude market closes.  If crude makes major moves around those time frames, then this would suggest normal trending, if not it would suggest that something is not quite right.  If you feel compelled to trade consider doing so after 10 AM when the markets give us better direction.  As always watch and monitor your order flow as anything can happen in this market.  This is why monitoring order flow in today's market is crucial.  We as traders are faced with numerous challenges that we didn't have a few short years ago.  High Frequency Trading is one of them.   I'm not an advocate of scalping however in a market as volatile as this scalping is an alternative to trend trading.

Recently Published Articles:      
http://www.investing.com/analysis/rockwell-trading-ceo-heitkoetter:-a-simple,-timeless-trading-strategy-166093 http://www.barchart.com/headlines/story/10110400/leadership-or-lack-thereof
http://www.barchart.com/headlines/story/9971005/german-factory-orders-up-us-down











Remember that without knowledge of order flow we as traders are risking our hard earned capital and the Smart Money will have no issue taking it from us.  Regardless of whatever platform you use for trading purposes you need to make sure it's monitoring order flow.  Sceeto does an excellent job at this.  To fully capitalize on this newsletter it is important that the reader understand how the various market correlate.  More on this in subsequent blogs.

Thursday, May 23, 2013

Pre-Market Global Review - 5/23/13 - Bernanke Comments Bombards Markets


Good Morning Traders,
 
As of this writing 5:45 AM EST, here’s what we see:
 
US Dollar –Down at 83.950 the US Dollar is down 509 ticks and is trading at 83.950.             
Energies – July Oil is down at 92.85.        
Financials – The June 30 year bond is up 1 tick and is trading at 143.20.      
Indices – The June S&P 500 emini ES contract is down at 1637.25 and is down 73 ticks.  
Gold – The June gold contract is trading up at 1385.20 and is up 181 ticks from its close.
 
Initial Conclusion: This is not a correlated market.  The dollar is down- and oil is down- which is not normal and the 30 year bond is trading higher.  The Financials should always correlate with the US dollar such that if the dollar is lower then bonds should follow and vice versa.  The indices are up  and the US dollar is trading higher which is correlated.  Gold is trading higher which is correlated with the US dollar trading lower.   I tend to believe that Gold has an inverse relationship with the US Dollar as when the US Dollar is down, Gold tends to rise in value and vice-versa. Think of it as a seesaw, when one is up the other should be down.   I point this out to you to make you aware that when we don't have a correlated market, it means something is wrong.  As traders you need to be aware of this and proceed with your eyes wide open. 
All of Asia closing lower.  As of this writing Europe is trading lower.
 
 
Possible challenges to traders today is the following            
1.  FOMC Member Bullard speak at 6:05 AM EST.  This is not major.        
2.  Unemployment Claims are out at 8:30 AM EST.  This is major.
3.  Flash Manufacturing PMI is out at 9 AM EST.  This is major.
4.  HPI is out at 9 AM EST.  This is major.
5.  New Home Sales are out at 10 AM EST.  This is major.

6.  Natural Gas Storage is out at 10:30 AM EST.  This will move the Nat Gas market.

Yesterday we said our bias was neutral as there were far too many variables.  As such the Dow fell by 81 points.  Today we are not dealing with a correlated market.  All of Asia closed lower and as of this writing Europe is trading lower.  It appears as though the fear factor is returning to Gold today as it's trading higher.  Therefore our bias is to the downside today.  Could this change? Of Course.  Remember anything can happen in a volatile market.
 
Yesterday we said our bias was neutral as there were too many variables that could drive teh markets in any direction.  Whereas teh markets opened higher and appeared to be making headway, by the end of the day the markets fell based on Ben Bernanke's testimony before Congress.  Having watched some of it live, it was quite apparent that the folks in DC don't really have a clue as to how the economy works.  One of them suggested that because low interest rates have been in place for an extended period of time and the economy hasn't grown, maybe it's time to raise rates!!!  I've never heard of a more ridiculous notion.  The reason why the economy isn't growing and jobs aren't being created is because of what the folks in DC are doing with Budget Ceilings, Fiscal Cliffs, Sequesters and Obama care all making for a very confusing outlook.  The only reason why this economy didn't fall back into a recession is because of low interest rates.  In any case at what point Bernanke (being pressured by a Congressman) suggested that QE3 could start to slow down as early as September.  That's all it took.  The Dow went from a gain of 154 points to a loss of 81.  Today we have a boatload  of economic news which could drive the markets in any direction. 

 
As readers are probably aware I don't trade equities.   While we're on this discussion, let's define what is meant by a good earnings report.  A company must exceed their prior quarter's earnings per share and must provide excellent forward guidance.  Any falloff between earning per share or forward guidance will not bode well for the company's shares.  This is one of the reasons I don't trade equities but prefer futures.  There is no earnings reports with futures and we don't have to be concerned about lawsuits, scandals, malfeasance, etc.
 
Anytime the market isn't correlated it's giving you a clue that something isn't right and you should proceed with caution. Today our bias is neutral.  Could this change?  Of course.  In a volatile market anything can happen.  We'll have to monitor and see.  

On Wednesday, May 1st I had the opportunity to interview Markus Heitkoetter.  Markus is the CEO of Rockwell Trading and is living proof that anyone with the right mindset, desire and tenacity can be a successful trader.  He offers a 296 page eBook that can be viewed on the Rockwell Trading website.  It's entitled "The Complete Guide to Day Trading"  I recall when Markus started Rockwell years ago and was always impressed with his focus on coaching and paying attention to detail.  Once again our friends at TradersLog have agreed to publish the article and it can be viewed at: http://www.traderslog.com/interview-with-markus-heitkoetter/


The video can be viewed at:
 http://youtu.be/i-mIumI6ptU



Please note the video is about a half hour in length and we plan on producing more in the near future.  Also note that in the near future we will have other videos where we will interview various trading leaders.




As I write this the crude markets are trading lower and the US Dollar is declining.  This is not normal.  Think of it this way.  If the stock market is trading lower, it's safe to assume that the crude market will follow suit and vice versa.  Crude trades with the expectation that business activity is expanding.  The barometer of which is the equities or stock market.  If you view both the crude and index futures side by side you will notice this. Yesterday July crude dropped to a low of 94.01 a barrel and held.  Currently is trading at around the 93.00 a barrel mark and was actually lower this morning.  We'll have to monitor and see if crude either goes lower or holds at the present level.   It would appear at the present time that crude has support at 92.00 a barrel and resistance at 98.  This could change.  All we need do is look at what happened last fall when crude was trading over $100.00 a barrel. We'll have to monitor and see.  Remember that crude is the only commodity that is reflected immediately at the gas pump.


Future Challenges:
- Budget Battle - ongoing.
- Debt Ceiling in the August time frame.      
- European Contraction - happening now 


Crude oil is trading lower and the US Dollar is declining.  This is not normal.  Crude typically makes 3 major moves (long or short) during the course of any trading day: around 7 AM EST, 9 AM EST and 2 PM EST when the crude market closes.  If crude makes major moves around those time frames, then this would suggest normal trending, if not it would suggest that something is not quite right.  If you feel compelled to trade consider doing so after 10 AM when the markets give us better direction.  As always watch and monitor your order flow as anything can happen in this market.  This is why monitoring order flow in today's market is crucial.  We as traders are faced with numerous challenges that we didn't have a few short years ago.  High Frequency Trading is one of them.   I'm not an advocate of scalping however in a market as volatile as this scalping is an alternative to trend trading.

Recently Published Articles:      
http://www.investing.com/analysis/rockwell-trading-ceo-heitkoetter:-a-simple,-timeless-trading-strategy-166093 http://www.barchart.com/headlines/story/10110400/leadership-or-lack-thereof
http://www.barchart.com/headlines/story/9971005/german-factory-orders-up-us-down











Remember that without knowledge of order flow we as traders are risking our hard earned capital and the Smart Money will have no issue taking it from us.  Regardless of whatever platform you use for trading purposes you need to make sure it's monitoring order flow.  Sceeto does an excellent job at this.  To fully capitalize on this newsletter it is important that the reader understand how the various market correlate.  More on this in subsequent blogs.