Pre-Market Global Review - 7/12/13 - Taper Caper Turns Tide

Good Morning Traders,
 
As of this writing 5:00 AM EST, here’s what we see:
 
US Dollar –Up at 83.150, the Sept US Dollar is up 235 ticks and is trading at 83.150.             
Energies – August Oil is down at 104.73.        
Financials – The September 30 year bond is up 17 ticks and is trading at 134.24.      
Indices – The September S&P 500 emini ES contract is down at 1669.00 and is down 4 ticks.  
Gold – The August gold contract is trading down at 1275.10 and is down 49 ticks from its close.
 
Initial Conclusion: Finally we have a correlated market, unfortunately it's 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 lower with the exception being the Nikkei and Indian Sensex which closed higher.  As of this writing most 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 out at 8:30 AM EST.  This is major.               
3.  Preliminary UOM Consumer Sentiment is out at 9:55 AM EST.  This is major.     
4.  Preliminary UOM Inflation expectation is out at 9:55 AM EST  This is major.  
5.  FOMC Member Bullard speaks at 1 PM EST.  This is major.

Yesterday we said our bias was to upside as most of the markets were correlated except the Bonds.  The Net Result?  The Dow gained 161 points and the other indices gained as well.  Today we are dealing with a correlated market however it is correlated to the downside.  As such our bias is to the down side today.  It could be that after a solid week of gains the Smart Money wants to take money off the table.  Could this change? Of Course.  Remember anything can happen in a volatile market.

Yesterday we said the markets would go higher and they did; to the tune of triple digits for the Dow.  This was despite a not too stellar Unemployment Claims number that showed an increase in claims.  It would appear as though Mr. Bernanke's comments concerning not being in a rush to raise short term interest rates did the trick.  Today we have FOMC Member Bullard speak at 1 PM EST and hopefully he will continue Bernanke's rhetoric concerning interest rates.                                 

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.  
As an update on this issue, last week the White House extended the employer's mandate to 2015 versus 2014 and currently the house will vote on a similar measure for individuals.  The question is can you trust the folks in DC to implement anything?
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 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 104.31 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 $103 a barrel and resistance at 108.  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.

Pre-Market Global Review - 7/11/13 - The Taper Caper

Good Morning Traders,
 
As of this writing 4:45 AM EST, here’s what we see:
 
US Dollar –Down at 83.145, the Sept US Dollar is down 219 ticks and is trading at 83.145.             
Energies – August Oil is up at 106.79.        
Financials – The September 30 year bond is up 37 ticks and is trading at 134.02.      
Indices – The September S&P 500 emini ES contract is up at 1665.00 and is up 67 ticks.  
Gold – The August gold contract is trading up at 1284.60 and is up 376 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 higher with some exchanges closing higher to the tune of triple digits.  As of this writing all of Europe is trading higher.
 
  Possible challenges to traders today is the following            
1.  Unemployment Claims are out at 8:30 AM EST.  This is major.        
2.  Import/Export Prices are out at 8:30 AM EST.  This is not major.             
3.  Natural Gas Storage is out at 10:30 AM EST.  This will move the Nat Gas market.   
4.  FOMC Member Tarullo speaks at 11 AM EST.  This is major.
5.  30 Year Bond Auction starts at 1 PM EST
6.  Federal Budget Balance is out at 2 PM EST.  This could have an impact on afternoon trading.

Yesterday we said our bias was to upside as most of the markets were correlated except the Bonds.  We also mentioned that the FOMC minutes would have an impact on the markets and they did.  The Dow dropped 8 points but the other indices closed higher.  Today we are dealing with a nearly correlated market with the exception being Bonds.  If Bonds were trading lower I would say we had a correlated market, this not withstanding our bias is to upside today.  Why?  The US Dollar is trading lower, Gold is up and Europe is trading higher.  Could this change? Of Course.  Remember anything can happen in a volatile market.

Yesterday started off as expected with the markets initially gaining ground in the morning but then remained flat until 2 PM when the FOMC meeting minutes were revealed.  It turns out that about half the committee wanted QE program to end later this year and some wanted it to end immediately.  At first the markets applauded the news by trading higher.  As I mentioned a couple days ago the institutionals want higher interest rates as it means more passive income for them. Who cares if John Q. Public has to pay more for a house or car?  That won't affect us, right?  Well I guess this realization must have struck a cord because the Dow did close lower.  Not by much mind you, but it did close lower.  Bernanke's speech at 4:10 PM was only to recognize the 100th anniversary of the Federal Reserve.  He did mention that the "Fed was in no hurry to raise short term interest rates even after the Unemployment and inflation thresholds were met".  So now the great guessing game begins, with the key issue being when will the Fed taper?  My own personal guess is sometime next year with a better economy than we have now.  One economist commented that the Fed tapering off of QE is liken to shooting the economy in the foot.  I would have to agree but then again that is the "Taper Caper"....
                              

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 104.33 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 $103 a barrel and resistance at 108.  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.

Pre-Market Global Review - 7/10/13 - Off to a Good Start

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.

Pre-Market Global Review - 7/9/13 - Earnings Season Starts

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.

Pre-Market Global Review - 7/8/13 - "Good" Jobs Numbers?

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:

                               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.

Pre-Market Global Review - 7/5/13 - Jobs Friday

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.