Global Pre-Market Review - 5/20/13 - Consumer Sentiment Up, Markets Up

Good Morning Traders,
 
As of this writing 5:00 AM EST, here’s what we see:
 
US Dollar –Down at 84.080 the US Dollar is Down 307 ticks and is trading at 84.080.             
Energies – June Oil is down at 95.69.        
Financials – The June 30 year bond is down 6 ticks and is trading at 143.25.      
Indices – The June S&P 500 emini ES contract is down at 1662.75 and is down 1 tick.  
Gold – The June gold contract is trading down at 1352.00 and is down 127 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 fractionally and the US dollar is trading lower which is not correlated.  Gold is trading lower 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, possibly as follow thru to the US markets on Friday.  As of this writing Europe is trading higher.
 
  Possible challenges to traders today is the following            
1.  FOMC Member Dale speaks at 1 PM EST.  This is not major.        
2.  No Major economic news
3.  Lack of economic news.

On Friday we said our bias was to the upside as the Bonds were trading lower which is bullish for the markets and indices.  The net result being that the Dow gained 121 points.  Today we are not dealing with a correlated market however our bias is neutral.  We feel that due to the upmove on Friday, the Smart Money will be looking to take "money off the table".  Whereas Asia closed higher and Europe is currently trading higher, European banks have a bank holiday today and this can mean a flat session for the Continent.  Could this change? Of Course.  Remember anything can happen in a volatile market.
 
On Friday we said our bias was to the upside as the Bonds were trading lower and that is always bullish for the markets and indices.  Why?  Traditional logic says that when the markets are lower then escape to the "safety" of bonds.  So if the Bonds are lower this is indicative of a market that wants to go higher.  UOM Consumer Sentiment came in far greater than expected.  83.7 versus 77.9 expected.  The Conference Board Leading Index came in at 0.6% versus 0.3%, which was better than expected.  All in all it was a good day for the markets and trading in general.  Will this follow thru today?  Again 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 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. On Friday June crude dropped to a low of 94.80 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 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.

Pre-Market Global Review - 5/17/13 - Mr. Market gets it Right

Good Morning Traders,
 
As of this writing 4:50 AM EST, here’s what we see:
 
US Dollar –Up at 84.080 the US Dollar is Up 358 ticks and is trading at 84.080.             
Energies – June Oil is down at 95.24.        
Financials – The June 30 year bond is down 3 ticks and is trading at 145.11.      
Indices – The June S&P 500 emini ES contract is up at 1650.00 and is up 8 ticks.  
Gold – The June gold contract is trading down at 1375.11 and is down 118 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 up and the US dollar is trading higher 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. 
Asia closed mixed, with the Aussie, Sensex and Singapore exchanges closing lower.  The rest of Asia closed higher.  As of this writing Europe is trading lower.
 
  Possible challenges to traders today is the following            
1.  Preliminary UOM Consumer Sentiment is out at 9:55 AM EST.  This is major.        
2.  Preliminary UOM Inflation Expectations is out at 9:55 AM EST.  This is major. 
3.  Conference Board Leading Index is out at 10 AM EST.  This is major.
4.  Chairman Bernanke Speaks at 11 AM EST.  This is major.  Correction: Bernanke will be speaking on Saturday, not today....


Yesterday we said our bias was neutral because the markets were correlated to the downside and we felt the market could move in any direction with the number of reports involved. The net result being that the Dow dropped 43 points.  Today we are not dealing with a correlated market however our bias is to the upside today.  Why?  The Bonds are trading lower which is always bullish for the indices.  Could this change? Of Course.  Remember anything can happen in a volatile market.
 
Yesterday we had 8 economic reports, none of which were really good.  Every report was negative except for Building Permits which came in higher.  Mind you that the Building Permits are for existing homes, in other words you have a major project in your home.  Unemployment Claims came in far higher than expected.  Finally the markets didn't advance on negative news, which is what you should expect.  Today we have Ben Bernanke speaking and as we have no idea what he's going to say, you should be mindful of that if trading today.  Last Friday he spoke and the market advanced but as usual 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.  
 
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 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 June crude dropped to a low of 93.24 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 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 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.forexcrunch.com/obamacare-and-its-impact-on-the-us
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.

Pre-Market Global Review - 5/16/13 - "Good" Economic News Rallys Markets

Good Morning Traders,
 
As of this writing 4:40 AM EST, here’s what we see:
 
US Dollar –Up at 84.080 the US Dollar is Up 119 ticks and is trading at 84.080.             
Energies – June Oil is down at 93.45.        
Financials – The June 30 year bond is up 9 ticks and is trading at 144.15.      
Indices – The June S&P 500 emini ES contract is down at 1651.25 and is down 12 ticks.  
Gold – The June gold contract is trading down at 1368.50 and is down 270 ticks from its close.
 
Initial Conclusion: Finally 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 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. 
Asia closed mixed, with the Aussie and Japan Nikkei closing lower.  The rest of Asia closed higher.  As of this writing Europe is trading mixed with London trading higher and the rest of Europe trading lower.
 
  Possible challenges to traders today is the following            
1.  Building Permits are out at 8:30 AM EST.  This is major.        
2.  Core CPI is out 8:30 AM EST.  This is major. 
3.  CPI is out at 8:30 AM EST.  This is major.
4.  Unemployment Claims are out at 8:30 AM EST.  This is major.
5.  Housing Starts are out at 8:30 AM EST.  This is major.
6.  Philly Fed Manufacturing Index is out at 10 AM EST.  This is major.
7.  Natural Gas Storage is out at 10:30 AM EST.  This will move the Nat Gas markets.
8.  FOMC Member Raskin Speaks at 12:30 PM EST.  This is not major.    
  

Yesterday we said our bias was neutral because the markets weren't correlated and we felt the market could move in any direction with the number of reports involved. Asia had closed higher and Europe was trading higher.  The net result being that the Dow advanced 61 points.  Today we are dealing with a correlated market however it is correlated to the downside.  Ordinarily I would our bias is to the downside however once again we have 8 economic reports out today, most of which are major.  Therefore our bias is neutral as the markets could be driven in any direction today.  Could this change? Of Course.  Remember anything can happen in a volatile market.
 
Yesterday we had 8 economic reports, none of which were really good.  Every report was negative except for the NAHB Housing Index which came 1 point higher than expected.  Mind you that the NAHB number is a survey of home builders, not homeowners.  What would you expect a home builder to say, things aren't that great?  Case-in-point recently my wife and I went to look at new homes by a major home builder.  They won't tell us the prices for a home on a new phase of development.  This plus Google going to $900.00 a share certainly didn't hurt as the markets went up.  You have to wonder what's fueling these markets as sooner or later it will be payback time and I suspect that this may catch many investors for a surprise.  Today we also have 8 economic reports, 6 of which are major.  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 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 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 June crude dropped to a low of 92.13 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 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 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.forexcrunch.com/obamacare-and-its-impact-on-the-us
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.

Pre-Market Global Review - 5/15/13 - Tuesday Rally

Good Morning Traders,
 
As of this writing 6:05 AM EST, here’s what we see:
 
US Dollar –Up at 83.940 the US Dollar is Up 227 ticks and is trading at 83.940.             
Energies – June Oil is down at 93.68.        
Financials – The June 30 year bond is down 6 ticks and is trading at 143.28.      
Indices – The June S&P 500 emini ES contract is down at 1646.25 and is down 7 ticks.  
Gold – The June gold contract is trading down at 1413.00 and is down 115 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 higher which is 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 higher.
 
  Possible challenges to traders today is the following            
1.  PPI is out at 8:30 AM EST.  This is major.        
2.  Core PPI is 8:30 AM EST.  This is major. 
3.  Empire State Manufacturing Index is out at 8:30 AM EST.  This is major.
4.  TIC Long Term Purchases is out  at 9 AM EST.  This is not major.
5.  Capacity Utilization Rate is out at 9:15 AM EST.  This is not major.
6.  Industrial Production is out at 9:15 AM EST.  This is not major.
7.  NAHB Housing Market Index is out at 10 AM EST.  This is major.
8.  Crude Oil Inventory is out at 10:30 AM EST.  This will move the crude market.    
  

Yesterday we said our bias was to the downside because the Bonds and USD weren't correlated. Asia had closed to the downside and Europe was trading lower.  However the Smart Money thought otherwise and the Dow closed up 123 points.  Today we are not dealing with a correlated market and in theory our bias should be to the downside but we have 8 economic reports, 4 of which are major and can drive the markets in any direction.  Therefore our bias is neutral.  Could this change? Of Course.  Remember anything can happen in a volatile market.
 
Well just when you think you've had everything figured the market pulls a surprise.  Despite the fact that we didn't have a correlated market and there was no major economic news the Smart Money decides to propel the market higher.  I've read somewhere that for the last 18 Tuesdays in a row the markets have traded higher.  Now I personally wouldn't put too much stock into that as anything can happen and if the markets aren't correlated I wouldn't trust voodoo to make the markets higher.  But it just goes to show you that anything can happen in a volatile market.  If the big institutions decide that they're going higher, they're going higher.  No point in fighting the tape.  Today we have 8 economic reports, 4 of which are major.  So be mindful of that 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 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 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. On Friday June crude dropped to a low of 93.88 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 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 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 crude 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.forexcrunch.com/obamacare-and-its-impact-on-the-us
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.

Pre-Market Global Review - 5/14/13 - Retail Sales Slump Dow

Good Morning Traders,
 
As of this writing 5:05 AM EST, here’s what we see:
 
US Dollar –Down at 83.200 the US Dollar is down 165 ticks and is trading at 83.200.             
Energies – June Oil is down at 95.08.        
Financials – The June 30 year bond is up 8 ticks and is trading at 144.28.      
Indices – The June S&P 500 emini ES contract is down at 1628.25 and is down 10 ticks.  
Gold – The June gold contract is trading up at 1436.50 and is up 22 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 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. 
The Asian markets closed mixed with the Aussie, Sensex and Singapore closing higher and the rest of Asia closed lower.  As of this writing all of  Europe is trading lower.
 
  Possible challenges to traders today is the following            
1.  NFIB Small Business Index is out at 7:30 AM EST.  This is not major.        
2.  Import Prices are out at 8:30 AM EST.  This is not major.      
  
 
Yesterday we said our bias was to the downside because the Bonds and USD weren't correlated. Asia had closed to the downside and Europe was trading lower.  The net result?  The Dow closed down 26 points.  Today the markets aren't correlated and our bias is to the downside.  Why?  The Bonds and USD aren't correlated and the indices are trading lower.   Asia closed mixed and currently Europe is trading lower.  Could this change? Of Course.  Remember anything can happen in a volatile market.
 
In our Market Bias video yesterday we mentioned that Core Retail Sales and Retail Sales were going to be major market movers and whereas the report was good, it wasn't enough to drive the markets higher.  But we mentioned that our bias was to the downside because the markets weren't correlated.  That's the thing about Market Correlation, at the end of the day it usually prevails.  We also mentioned our bias was to the downside because we didn't see correlation.  Some of you have asked when is the best time to trade.  I would suggest after 10 AM EST.  Why 10 AM?  Because the market usually changes direction at that time.  What if a report comes out at 10 AM?  Wait until 10:30.  One of my rules is to never trade into a report but rather see how the market reacts to it and then capitalize.  Why?  Because we don't the results of the report and we don't know how the market to it.  Just some food for thought.

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. On Friday June crude dropped to a low of 94.51 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 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.forexcrunch.com/obamacare-and-its-impact-on-the-us
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.

Pre-Market Global Review - 5/13/13 - Bernanke Bolsters Markets

Good Morning Traders,
 
As of this writing 5:00 AM EST, here’s what we see:
 
US Dollar –Up at 83.330 the US Dollar is up 99 ticks and is trading at 83.330.             
Energies – June Oil is down at 95.21.        
Financials – The June 30 year bond is down 5 ticks and is trading at 144.27.      
Indices – The June S&P 500 emini ES contract is down at 1624.50 and is down 20 ticks.  
Gold – The June gold contract is trading down at 1442.00 and is down 46 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 higher which is 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. 
With the exception of the Nikkei exchange the rest of Asia closed lower.  As of this writing all of  Europe is trading lower.
 
  Possible challenges to traders today is the following            
1.  Core Retail Sales are out at 8:30 AM EST.  This is major.        
2.  Retail Sales are out at 8:30 AM EST.  This is major.      
3.  Business Inventories are out at 10 AM EST.  This is not major.   
 
On Friday we said our bias was to the upside because the Bonds and USD were down. Asia had closed to the upside and Europe was trading higher.  The net result?  The Dow closed up 35 points.  Today the markets aren't correlated and our bias is to the downside.  Why?  The Bonds and USD aren't correlated and Gold is trading lower.   Asia closed mainly lower and currently Europe is trading lower.  Could this change? Of Course.  Remember anything can happen in a volatile market.
 
In our Market Bias video on Friday we mentioned that the market mover for the day was Ben Bernanke speaking as there wasn't any economic news to speak of.  Well Ben did speak and although the markets moved in and out of positive territory all day, at the end the market closed up.  Bernanke spoke mainly to the financial community (banks) in terms of conditions as they stand currently but also expressed concern that financial institutions may over reach in terms of yields.  He was expressing concerns about an ultra low interest rate environment and the risks thereof.  I believe he's concerned about the dangers of deflation as opposed to inflation.  This is the same type of situation that Japan dealt with in the 1990's and may very well have to deal with again as their interest rate is lower than ours.  I think Mr. Benanke needs to speak with anyone who does weekly food shopping.  They will certainly inform him that prices aren't going down, quite the contrary; in many cases they're rising.  So there is no real concern over deflation, it's more inflation that should be the object of concern.  The Fed also stated in December that they will not consider raising the FFR (Federal Funds Rate) aka the overnight rate unless inflation creps up and the Unemployment Rate is below 6.5%.  It doesn't appear as though they'll be backing down any time soon.  Be that as it may the markets liked what they heard and reacted favorably to it.

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 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. On Friday June crude dropped to a low of 93.41 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 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 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.forexcrunch.com/obamacare-and-its-impact-on-the-us
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.

For previous issues feel free to visit our archives.