Good Morning Traders,
As
of this writing 5:20 AM EST, here’s what we see:
US Dollar –Down at 84.485, the Sept US Dollar is down 296 ticks and is trading at 84.485.
Energies – August Oil is up at 104.78.
Financials – The September 30 year bond is up 3 ticks and is trading at 133.18.
Indices – The September S&P
500 emini ES contract is down at 1643.75 and is down 7 ticks.
Gold – The August
gold contract is trading up at 1251.90 and is up 60 ticks from its close.
Initial Conclusion: This is not correlated market. The dollar is down- and
oil is up+ which is 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 up and the US dollar
is trading higher which is not correlated. Gold is trading higher which is correlated with the
US
dollar trading down. 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 higher with the exception of the Nikkei and Indian Sensex. As
of this
writing all of Europe is trading lower.
Possible challenges to
traders today is the following
1. Wholesale Inventories are out at 10 AM EST. This is not major.
2. Crude Inventories are out at 10:30 AM EST. This will move the oil markets.
3. 10 Year Bond Auction starts at 1 PM EST. This can move the Bond markets.
4. FOMC Meeting Minutes are out at 2 PM EST. This is major.
5.
Chairman Bernanke speaks at 4:10 PM EST. This is major.
Yesterday we said our bias was to
upside as the Bonds were lower and Europe was trading much
higher. The Net Result? The Dow gained 75 points and the other
indices gained as well. Today we are not dealing a correlated market however our bias is to the upside. Why? The USD is trading lower and the Bonds are trading slightly higher plus Gold is trading higher. Could
this change? Of Course. Remember anything can happen in a volatile market.
This was a good start to the earnings season as apparently the Alcoa earnings didn't phase the markets at all. I originally thought this might have a negative impact but apparently not. All boats seemed to lift higher yesterday as all indices fared well. Today in the afternoon we have the 10 year bond auction, the FOMC meeting minutes and Bernanke speaking after 4 PM when the markets close. He's probably going to address the meeting minutes and I just hope he does a better job this time around. The markets could go in either direction today with the mindset being "let's make our money today and then worry about Bernanke later" or they could be sitting on their hands waiting for him to speak. I just hope he sticks to the schedule and not talk during trading hours as that would be a major distraction...
On Friday, June 7th I had the
opportunity to interview Mr. Sal Spedele regarding ObamaCare. Sal is a
20 year veteran of the Insurance Industry and we spoke at length
regarding the ramifications of the Patient Protection and Affordable
Care Act aka ObamaCare. If you are at all concerned about the future of
Health Insurance in the United States, then you need to listen to this
interview and act on it. Sal and his team is offering complimentary
advisory services to inform you of your rights and ramifications of this
Act. To download the article on ObamaCare, go to:
https://markettealeaves.sharefile.com/d/s978a806ae2e41569
To view my discussion with Sal:
http://youtu.be/sR_ine0b5Ro
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
May, I spoke with John Karnas, CEO of Trend Following Trades. John has
an interesting background as he was a trader for a number of years
prior to buying Trend Following Trades. John is a believer in Trading
Plans and has a very precise method of developing aspiring traders. To
download the article I've written, go to:
https://markettealeaves.sharefile.com/d/sdf8f77f6e2c4347a
My discussion with John can be viewed at:
http://youtu.be/uVwHpMq1604
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 declining. 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 August crude dropped to a low of 102.31 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 $102 a barrel and resistance
at 105. 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.
- Asian Contagion - happening now
Crude
oil is trading higher and the US Dollar is declining. 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 10:30 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.barchart.com/headlines/story/10598425/when-perception-becomes-reality
http://www.forexcrunch.com/good-jobs-report/
http://www.traderslog.com/john-karnas/
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 editions.
Good Morning Traders,
As
of this writing 5:05 AM EST, here’s what we see:
US Dollar –Up at 84.510, the Sept US Dollar is up 96 ticks and is trading at 84.510.
Energies – August Oil is down at 103.05.
Financials – The September 30 year bond is down 1 tick and is trading at 133.15.
Indices – The September S&P
500 emini ES contract is up at 1642.75 and is up 29 ticks.
Gold – The August
gold contract is trading up at 1254.30 and is up 194 ticks from its close.
Initial Conclusion: This is not correlated market. The dollar is up+ and
oil is down- which is normal but 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 higher which is not correlated with the
US
dollar trading down. 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 higher. As
of this
writing all of Europe is trading higher with some exchanges higher by triple digits.
Possible challenges to
traders today is the following
1. No Major economic news to speak of..
2. Lack of economic news.
3. NFIB Small Business Index is out at 7:30 AM EST. This is not major.
4. JOLTS Job Openings is out at 10 AM EST. This could have an impact.
Yesterday we said our bias was to upside as the markets were nearly correlated and Europe was trading much higher. The Net Result? The Dow gained 89 points and the other indices gained as well. Today we are not dealing a correlated market however our bias is to the upside. Why? The Bonds are trading lower which is usually bullish for the markets and indices and Gold is trading higher. Additionally Asia closed higher and Europe is currently trading higher. Could
this change? Of Course. Remember anything can happen in a volatile market.
Last night started the official opening of earnings season for the 2nd calendar quarter with Alcoa reporting. Unfortunately this was not a stellar quarter for the aluminum maker as their year-over-year earnings were much higher a year ago. Revenues fell from 5.96 Billion a year ago to 5.85 Billion this past quarter. Yes, they did beat estimates by a penny but 7 cents a share earnings isn't anything to rave about. This is the reason why I don't trade stocks or stock options. You always have to be concerned about earnings and more importantly how the markets will react to those earnings per share. Time will tell if Alcoa will weather this and it will be interesting to see how other firms fare this quarter.....
On Friday, June 7th I had the
opportunity to interview Mr. Sal Spedele regarding ObamaCare. Sal is a
20 year veteran of the Insurance Industry and we spoke at length
regarding the ramifications of the Patient Protection and Affordable
Care Act aka ObamaCare. If you are at all concerned about the future of
Health Insurance in the United States, then you need to listen to this
interview and act on it. Sal and his team is offering complimentary
advisory services to inform you of your rights and ramifications of this
Act. To download the article on ObamaCare, go to:
https://markettealeaves.sharefile.com/d/s978a806ae2e41569
To view my discussion with Sal:
http://youtu.be/sR_ine0b5Ro
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
May, I spoke with John Karnas, CEO of Trend Following Trades. John has
an interesting background as he was a trader for a number of years
prior to buying Trend Following Trades. John is a believer in Trading
Plans and has a very precise method of developing aspiring traders. To
download the article I've written, go to:
https://markettealeaves.sharefile.com/d/sdf8f77f6e2c4347a
My discussion with John can be viewed at:
http://youtu.be/uVwHpMq1604
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 August crude dropped to a low of 102.13 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 $102 a barrel and resistance
at 104. 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.
- Asian Contagion - 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 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.barchart.com/headlines/story/10598425/when-perception-becomes-reality
http://www.forexcrunch.com/good-jobs-report/
http://www.traderslog.com/john-karnas/
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 editions.
Good Morning Traders,
As
of this writing 4:05 AM EST, here’s what we see:
US Dollar –Down at 84.680, the Sept US Dollar is down 9 ticks and is trading at 84.680.
Energies – August Oil is up at 103.27.
Financials – The September 30 year bond is up 4 ticks and is trading at 132.25.
Indices – The September S&P
500 emini ES contract is up at 1632.50 and is up 22 ticks.
Gold – The August
gold contract is trading up at 1224.00 and is up 113 ticks from its close.
Initial Conclusion: This is a nearly correlated market. The dollar is down- and
oil is up+ which is 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 up and the US dollar
is trading lower which is correlated. Gold is trading higher which is correlated with the
US
dollar trading down. 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. As
of this
writing all of Europe is trading higher with some exchanges higher by triple digits.
Possible challenges to
traders today is the following
1. No Major economic news to speak of..
2. Lack of economic news.
3. Consumer Credit is out at 3 PM EST. This could effect afternoon trading.
On Friday we said our bias was neutral as it was Jobs Friday and the Bonds weren't correlated with the USD. Well the numbers came out and showed 195,000 jobs created which exceeded expectation. The net result being that the Dow gained 147 points and the other indices gained as well. Today we are dealing with a nearly correlated market with the culprit being Bonds. If the Bonds were trading lower I would say we had a correlated market to the upside. This being said, our bias is to the upside today. Bear in mind that ECB President Mario Draghi will be speaking twice today, once at 8:30 AM and 9:30 AM EST and we have no idea what he going to talk about. Could
this change? Of Course. Remember anything can happen in a volatile market.
On Friday we said our bias was neutral as it is Jobs Friday and historically speaking that day is usually volatile and the markets can go in any direction. This past Friday the jobs numbers came in at 195,000 and everyone is saying "great report, time for the Fed to taper." Really? Well the number of jobs created may be positive, but that's only half the story as the Unemployment Rate remained at an official 7.6%. What does that tell you? It tells me that that the unemployment rate isn't going down and that the number of new jobs created is offset by either the number of people who were let go or the number of people entering the workforce. This is not a net gain by sense of the word. The German Dax exchange was trading lower prior to the number coming out and guess what? It remained lower after the number was released. Even the FTSE that was trading higher prior to the number dropped afterward. Want proof? Look at charts below:
++7_5_2013.jpg)
Chart courtesy of Trend Following Trades (www.trendfollowingtrades.com)
The 1st blue arrow shows where the DAX was trading at 8:30 AM when the number was released, the 2nd arrow shows where it traded after 9 AM. Bottom line, the Europeans weren't fooled by this number. Want more proof? This article was written by Rex Nutting of Marketwatch.com; it shown here with his permission. http://www.marketwatch.com/story/hold-the-champagne-jobs-market-isnt-better-yet-2013-07-05?link=MW_home_latest_news
On Friday, June 7th I had the
opportunity to interview Mr. Sal Spedele regarding ObamaCare. Sal is a
20 year veteran of the Insurance Industry and we spoke at length
regarding the ramifications of the Patient Protection and Affordable
Care Act aka ObamaCare. If you are at all concerned about the future of
Health Insurance in the United States, then you need to listen to this
interview and act on it. Sal and his team is offering complimentary
advisory services to inform you of your rights and ramifications of this
Act. To download the article on ObamaCare, go to:
https://markettealeaves.sharefile.com/d/s978a806ae2e41569
To view my discussion with Sal:
http://youtu.be/sR_ine0b5Ro
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
May, I spoke with John Karnas, CEO of Trend Following Trades. John has
an interesting background as he was a trader for a number of years
prior to buying Trend Following Trades. John is a believer in Trading
Plans and has a very precise method of developing aspiring traders. To
download the article I've written, go to:
https://markettealeaves.sharefile.com/d/sdf8f77f6e2c4347a
My discussion with John can be viewed at:
http://youtu.be/uVwHpMq1604
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 declining. 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. On Friday August crude dropped to a low of 100.94 a
barrel and went no lower. 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 $102 a barrel and resistance
at 104. 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.
- Asian Contagion - happening now
Crude
oil is trading higher and the US Dollar is declining. 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 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.barchart.com/headlines/story/10598425/when-perception-becomes-reality
http://www.forexcrunch.com/good-jobs-report/
http://www.traderslog.com/john-karnas/
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 editions.
Good Morning Traders,
As
of this writing 5:15 AM EST, here’s what we see:
US Dollar –Up at 84.250, the Sept US Dollar is up 799 ticks and is trading at 84.250.
Energies – August Oil is down at 101.08.
Financials – The September 30 year bond is down 20 ticks and is trading at 134.20.
Indices – The September S&P
500 emini ES contract is up at 1624.00 and is up 60 ticks.
Gold – The August
gold contract is trading down at 1233.70 and is down 177 ticks from its close.
Initial Conclusion: This is not a correlated market. The dollar is up+ and
oil is down- which is normal but 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 lower which is correlated with the
US
dollar trading up. 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 higher. As
of this
writing all of Europe is trading mixed with the FTSE trading higher while the other European exchanges are trading fractionally lower.
Possible challenges to
traders today is the following
1. Non-Farm Employment Change is out at 8:30 AM EST. This is major.
2. Unemployment Rate is out at 8:30 AM EST. This is major.
3. Average Hourly Earnings are out at 8:30 AM EST. This is major.
On Wednesday we said our bias was to the downside as the Bonds weren't correlated with the USD. We also said that we have 8 economic reports, 6 of which were major. However it appeared as though the Smart Money wanted to go into the holiday on a positive note and the Dow gained 57 points in an abbreviated session. Whereas the markets aren't correlated due to the Bonds, our bias is neutral. Given that this is Jobs Friday, anything can happen today. It would seem as though the Europeans are waiting until 8:30 AM EST when the announcement is made before making any trading decisions. Could
this change? Of Course. Remember anything can happen in a volatile market.
On Wednesday we said our bias was to the downside as the Bonds and USD weren't correlated and we had 8 economic reports, 6 of which were major. Well the ADP Employment report came in better than expected at 8:15 AM and the markets were off. Unemployment claims came in better than expected and that was even better. Today is the all important Jobs Friday and as such I don't trade on that day as historically the markets have never proven to act with any sense of normalcy on this day, at least for me. Given that it is the day after a major holiday, I would expect volume to be light and I suspect that anyone who went to work today will be soon be heading for the exits after the report comes out. But as in all things we'll have to monitor and see.....
On Friday, June 7th I had the
opportunity to interview Mr. Sal Spedele regarding ObamaCare. Sal is a
20 year veteran of the Insurance Industry and we spoke at length
regarding the ramifications of the Patient Protection and Affordable
Care Act aka ObamaCare. If you are at all concerned about the future of
Health Insurance in the United States, then you need to listen to this
interview and act on it. Sal and his team is offering complimentary
advisory services to inform you of your rights and ramifications of this
Act. To download the article on ObamaCare, go to:
https://markettealeaves.sharefile.com/d/s978a806ae2e41569
To view my discussion with Sal:
http://youtu.be/sR_ine0b5Ro
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.
In
May, I spoke with John Karnas, CEO of Trend Following Trades. John has
an interesting background as he was a trader for a number of years
prior to buying Trend Following Trades. John is a believer in Trading
Plans and has a very precise method of developing aspiring traders. To
download the article I've written, go to:
https://markettealeaves.sharefile.com/d/sdf8f77f6e2c4347a
My discussion with John can be viewed at:
http://youtu.be/uVwHpMq1604
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 declining. 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. On Wednesday August crude dropped to a low of 100.52 a
barrel and went no lower. 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 $100 a barrel and resistance
at 102. 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.
- Asian Contagion - happening now
Crude
oil is trading higher and the US Dollar is declining. 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 the economic reports 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.barchart.com/headlines/story/10598425/when-perception-becomes-reality
http://www.forexcrunch.com/asian-contagion/
http://www.traderslog.com/john-karnas/
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 editions.
Good Morning Traders,
As
of this writing 5:55 AM EST, here’s what we see:
US Dollar –Down at 83.665, the Sept US Dollar is down 99 ticks and is trading at 83.665.
Energies – August Oil is up at 101.19.
Financials – The September 30 year bond is up 18 ticks and is trading at 136.17.
Indices – The September S&P
500 emini ES contract is down at 1597.00 and is down 41 ticks.
Gold – The August
gold contract is trading up at 1245.70 and is up 23 ticks from its close.
Initial Conclusion: This is not a correlated market. The dollar is down- and
oil is up+ which is 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 down. 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 mainly lower with the exception being the Nikkei which closed fractionally higher. As
of this
writing all of Europe is trading lower.
Possible challenges to
traders today is the following
1. Challenger Job Cuts are out at 7:30 AM EST. This is major.
2. ADP Non-Farm Employment Change is out at 8:15 AM EST. This is major.
3. Trade Balance is out at 8:30 AM EST. This is major.
4. Unemployment Claims are out at 8:30 AM EST. This is major.
5. ISM Non-Manufacturing PMI is out at 10 AM EST. This is major.
6. Treasury Secretary Lew speaks at 10 AM EST. This is major.
7. Crude Oil Inventory is out at 10:30 AM EST. This will move the crude market.
8. Natural Gas Inventory is out at 10:30 AM EST. This will move the Nat Gas market.
Yesterday
we said our bias was neutral as none of the instruments we track were correlated. The
Net Result? The Dow dropped 43 points and the other indices dropped fractionally lower. Today we are not dealing with a correlated market and hence our bias is to the downside today. The Bonds are trading higher which is not correlated with the US Dollar trading lower. Asia closed lower and currently Europe is trading lower and we 8 economic reports; 6 of which are major. Could
this change? Of Course. Remember anything can happen in a volatile market.
Yesterday we said our bias was neutral as it seemed as though every instrument (USD, Crude, Financials, Indices and Gold) all wanted to advance and as such there is and can be no market correlation in such a scenario. Yesterday reminded me of Friday where we saw the same situation occur and Friday saw a 114 point drop in the Dow. A neutral bias means beware, don't trade if you don't have a compelling reason to do so. Yesterday the markets opened nicely and moved up until Dudley spoke and informed everyone that the Fed hasn't determined when it will taper off the 85 Billion Dollar buyback program and that's all it took for the market to drop. Why? The markets had it in their mind that the Fed was going to do this sooner as opposed to later, some have even suggested that it would happen as early as September. But Bernanke NEVER said that. All he said was that the Fed may, I repeat may cutback next year depending upon economic conditions. Anyone who watched his press conference on FOMC Day heard the exact same thing, yet the press and the Smart Money took it completely out of context and now it's assumed that the Fed will taper in September. So when Dudley says something contrary to this, what happens? The market sells off. This is what happens when perception becomes reality....
On Friday, June 7th I had the
opportunity to interview Mr. Sal Spedele regarding ObamaCare. Sal is a
20 year veteran of the Insurance Industry and we spoke at length
regarding the ramifications of the Patient Protection and Affordable
Care Act aka ObamaCare. If you are at all concerned about the future of
Health Insurance in the United States, then you need to listen to this
interview and act on it. Sal and his team is offering complimentary
advisory services to inform you of your rights and ramifications of this
Act. To download the article on ObamaCare, go to:
https://markettealeaves.sharefile.com/d/s978a806ae2e41569
To view my discussion with Sal:
http://youtu.be/sR_ine0b5Ro
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
May, I spoke with John Karnas, CEO of Trend Following Trades. John has
an interesting background as he was a trader for a number of years
prior to buying Trend Following Trades. John is a believer in Trading
Plans and has a very precise method of developing aspiring traders. To
download the article I've written, go to:
https://markettealeaves.sharefile.com/d/sdf8f77f6e2c4347a
My discussion with John can be viewed at:
http://youtu.be/uVwHpMq1604
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 declining. 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 August crude dropped to a low of
97.78 a
barrel and went no lower. 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 $100 a barrel and resistance
at 102. 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.
Special Note: Be mindful if trading crude today. Overnight the August contract went to a high of $102.18 and anytime crude trades above $100.00 a barrel there is increased volatility. Addtionally the political strife in Egypt is causing a supply strain.
Future Challenges:
- Budget Battle - ongoing.
- Debt Ceiling in the August time frame.
- Asian Contagion - happening now
Crude
oil is trading higher and the US Dollar is declining. 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 10:30 AM when the economic reports 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.barchart.com/headlines/story/10110400/leadership-or-lack-thereof
http://www.forexcrunch.com/asian-contagion/
http://www.traderslog.com/john-karnas/
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 editions.
Good Morning Traders,
As
of this writing 4:45 AM EST, here’s what we see:
US Dollar –Up at 83.340, the Sept US Dollar is up 83 ticks and is trading at 83.340.
Energies – August Oil is up at 98.15.
Financials – The September 30 year bond is up 15 ticks and is trading at 136.07.
Indices – The September S&P
500 emini ES contract is up at 1610.50 and is up 15 ticks.
Gold – The August
gold contract is trading up at 1263.50 and is up 78 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 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 not correlated. Gold is trading higher which is not correlated with the
US
dollar trading up. 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 mainly higher with the exception being the Hang Seng and Sensex exchanges. As
of this
writing all of Europe is trading lower.
Possible challenges to
traders today is the following
1. Factory Orders are out at 10 AM EST. This is major.
2. IBD Economic Optimism is out at 10 AM EST. This is major.
3. Total Vehicle Sales - all day.
4. FOMC Member Dudley speaks at 12:30 PM EST. This is major.
Yesterday we said our bias was to the upside as the markets were correlated. The Net Result? The Dow gained 65 points and the other indices gained as well. Today we are not dealing with a correlated market and currently this reminds me of Friday's situation where all instruments are moving higher. As such our bias is neutral as the markets can go in any direction today. Could
this change? Of Course. Remember anything can happen in a volatile market.
Yesterday we said our bias was to upside as yesterday morning the markets were correlated as such. That's the thing about Market Correlation, it will give you a good sense of direction going forward for that day. Of course having good economic news didn't hurt either. ISM Manufacturing, Construction Spending all came in with good results and clearly that can't hurt. My concern yesterday was a report that came out from the German publication: Der Speigel that claimed the NSA had bugged EU Headquarters in both Washington and Brussels; in fact I mentioned this in our Market Bias video because yesterday morning the DAX was dropping like a rock and looked like the Paris exchange would follow suit. The situation stabilized however and Europe did close higher. It makes you wonder, if this is true what are the folks in DC thinking? The Europeans are not our enemies, if anything they are our allies. I don't understand an administration allowing this, if true. But then again, I'm not too crazy about having my phone tapped either....
On Friday, June 7th I had the
opportunity to interview Mr. Sal Spedele regarding ObamaCare. Sal is a
20 year veteran of the Insurance Industry and we spoke at length
regarding the ramifications of the Patient Protection and Affordable
Care Act aka ObamaCare. If you are at all concerned about the future of
Health Insurance in the United States, then you need to listen to this
interview and act on it. Sal and his team is offering complimentary
advisory services to inform you of your rights and ramifications of this
Act. To download the article on ObamaCare, go to:
https://markettealeaves.sharefile.com/d/s978a806ae2e41569
To view my discussion with Sal:
http://youtu.be/sR_ine0b5Ro
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.
In
May, I spoke with John Karnas, CEO of Trend Following Trades. John has
an interesting background as he was a trader for a number of years
prior to buying Trend Following Trades. John is a believer in Trading
Plans and has a very precise method of developing aspiring traders. To
download the article I've written, go to:
https://markettealeaves.sharefile.com/d/sdf8f77f6e2c4347a
My discussion with John can be viewed at:
http://youtu.be/uVwHpMq1604
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. Yesterday August crude dropped to a low of
96.29 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 95 a barrel and resistance
at 99. 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.
- Asian Contagion - happening now
Crude
oil is trading higher 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 economic reports 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.barchart.com/headlines/story/10110400/leadership-or-lack-thereof
http://www.forexcrunch.com/asian-contagion/
http://www.traderslog.com/john-karnas/
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 editions.
