Good Morning Traders,
As
of this writing 4:35 AM EST, here’s what we see:
US Dollar –Up at 82.055, the Sept US Dollar is up 460 ticks and is trading at 82.055.
Energies – August Oil is down at 96.36.
Financials – The September 30 year bond is down 29 ticks and is trading at 137.03.
Indices – The September S&P
500 emini ES contract is down at 1612.75 and is down 44 ticks.
Gold – The August
gold contract is trading down at 1313.40 and is down 610 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 lower with some exchanges down by triple digits. As of
this writing all of Europe is trading down. It would appear as though no one liked what Mr. Bernanke said as global markets are clearly in retreat. Asia closed down by triple digits, no doubt as a follow thru with what happened yesterday on the US exchanges. Apparently at this hour, Europe is following that trend. The question is will the US reverse course or have the strength to reverse course?
Possible challenges to
traders today is the following
1. Unemployment Claims are out at 8:30 AM EST. This is major.
2. Flash Manufacturing PMI is out at 9 AM EST. This is major.
3. Existing Home Sales are out at 10 AM EST. This is major.
4. Philly Fed Manufacturing Index is out at 10 AM EST. This is major.
5. CB Leading Indicators are out at 10 AM EST. This is major
6. Natural Gas Supplies are out at 10:30 AM EST. This will move the Nat Gas market.
Yesterday we said our bias was neutral because it was FOMC Day and historically speaking the markets do not act with any sense of normalcy. The net result? The
Dow dropped 206 points and the other indices lost ground as well. Currently the markets aren't correlated but our bias is Neutral. Why? The Bonds are trading much lower and this is always bullish for the markets and indices. Additionally we have major economic news that could move the markets in any direction today. Could
this change? Of Course. Remember anything can happen in a volatile market.
Yesterday we said to be alert for the language on the FOMC Statement. The markets did not move much after the announcement on the Federal Funds Rate and apparently were waiting for the news conference to be held at 2:30 PM EST. Well the news conference started and apparently no one liked what Chairman Bernanke said as the markets proceeded to fall. Ironically the FOMC is neither changing the FFR nor is it currently tapering off QE but because he said they might do so (again the operative word is "might") if the economy picks up steam, the markets fell off. All he said was what he's stated previously on multiple occasions and yet the market falls off. Can you imagine if he said "we're never going to taper off QE, QE is here to stay forever". Do you think anyone would've bought it? I watched that press conference and he must have said at least a dozen times "the targets that we specified are a threshold, not a trigger". What he was referring to are the target of 6.5% unemployment rate and inflation above 2.5%. These are targets the FOMC declared in December, 2012 and yet now it's an issue. What he was further saying is that if these targets are met then the Fed would look at the overall economic landscape prior to tapering off the buyback program or increasing the FFR. Yet not one reporter even picked up on this. And you wonder why I don't trade FOMC Day?
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 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
97.79 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 96 a barrel and resistance
at 99. This could change. All we
need do is look at what happened last fall when crude was trading over
$100.00 a barrel. We'll have to monitor and see. Remember that crude is
the only commodity that is reflected immediately at the gas pump.
Future Challenges:
- Budget Battle - ongoing.
- Debt Ceiling in the August time frame.
- Asian Contagion - happening now
Crude
oil is trading 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 economic news is released and the markets give us better
direction. As
always watch and monitor your
order flow as anything can happen in this market. This is why
monitoring order flow in today's market is crucial. We as traders are
faced with numerous challenges that we didn't have a few short years
ago. High Frequency Trading is one of them. I'm not an advocate of
scalping however in a market as volatile as this
scalping is an alternative to trend trading.
Recently Published Articles:
http://www.barchart.com/headlines/story/10110400/leadership-or-lack-thereof
http://www.forexcrunch.com/asian-contagion/
http://www.traderslog.com/john-karnas/
Remember
that without knowledge of order flow
we as traders are risking our hard earned capital and the Smart Money
will have
no issue taking it from us. Regardless of whatever platform you use for
trading purposes you need to make sure it's monitoring order flow.
Sceeto does an excellent job at this. To fully capitalize on
this newsletter it is important that the reader understand how the
various market
correlate. More on this in subsequent editions.
Good Morning Traders,
As
of this writing 5:55 AM EST, here’s what we see:
US Dollar –Up at 80.780, the Sept US Dollar is up 31 ticks and is trading at 80.780.
Energies – August Oil is up at 99.08.
Financials – The September 30 year bond is down 1 tick and is trading at 139.17.
Indices – The September S&P
500 emini ES contract is up at 1648.50 and is up 13 ticks.
Gold – The August
gold contract is trading down at 1366.80 and is down 1 tick from its close.
Initial Conclusion: This is not a correlated market. The dollar is up+ and
oil is up+ which is not normal and the 30 year bond is trading lower. The Financials should always correlate
with
the US dollar such that if the dollar is lower then bonds should follow
and vice versa. The indices are up and the US dollar
is trading higher which is not correlated. Gold is trading lower which is correlated with the
US
dollar trading 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, Nikkei and Sensex closing higher. As of
this writing all of Europe is trading up.
Possible challenges to
traders today is the following
1. Crude Oil Inventories are out at 10:30 AM EST. This will move the oil markets.
2. FOMC Economic Projections are out at 2 PM EST. This is major.
3. FOMC Statement is out at 2 PM EST. This is major.
4. Federal Funds Rate is out at 2 PM EST. This is major.
5. FOMC Press Conference to start at 2:30 PM EST.
Yesterday we said our bias was to the upside as both the USD and Bonds were trading lower and this historically is positive for the markets and indices. The net result? The
Dow gained 138 points and the other indices gained as well. Today we are not dealing with a correlated market and ordinarily I might say our bias is to the upside because the Bonds are trading lower and the indices are higher. However this is not an ordinary day, it's FOMC Day and our bias is neutral meaning the markets can be driven in any direction today. Could
this change? Of Course. Remember anything can happen in a volatile market.
Today is FOMC Day and as most of my followers know by now, I don't trade on FOMC Day as the markets historically do not trade with any sense of normalcy. The interesting aspect about this particular meeting is Obama praising the efforts of Chairman Bernanke. Typically when a President does that it does not bode well for the person he's praising. It sounds to me as though President Obama has determined that Ben Bernanke won't be back for another term. If that is the case, it would be a shame as Ben Bernanke has done much to keep the financial system intact after the fallout of 2008. I know there are many who may dispute this but consider this as food for thought. What would have happened if the current Fed Chairman had raised rates prematurely? Access to capital would have been cutoff for many people and businesses and all the success we currently applaud (auto sales, lower mortgage rates, etc.) would be nonexistent. Think about that if you're considering throwing a stone at the Fed Chairman. Do we think that the Fed is going to raise the Federal Funds Rate? No, what will make today's meeting interesting is his comments on Quantitative Easing. Will the Fed provide language that QE will be tapered? That's the question for today. Of course we don't know that but will 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 lower and the US
Dollar is declining. This is not normal. Think of it this way. If the
stock
market is trading lower, it's safe to assume that the crude market will
follow suit and vice versa. Crude trades with the expectation that
business activity is expanding. The barometer of which is the equities
or stock market. If you view both the crude and index futures side by
side you will notice this. Yesterday August crude dropped to a low of
97.65 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 97.98 a barrel and resistance
at 99.14. 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 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 10:30 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/10110400/leadership-or-lack-thereof
http://www.forexcrunch.com/asian-contagion/
http://www.traderslog.com/john-karnas/
Remember
that without knowledge of order flow
we as traders are risking our hard earned capital and the Smart Money
will have
no issue taking it from us. Regardless of whatever platform you use for
trading purposes you need to make sure it's monitoring order flow.
Sceeto does an excellent job at this. To fully capitalize on
this newsletter it is important that the reader understand how the
various market
correlate. More on this in subsequent editions.
Good Morning Traders,
As
of this writing 6:05 AM EST, here’s what we see:
US Dollar –Down at 80.860, the Sept US Dollar is down 108 ticks and is trading at 80.860.
Energies – August Oil is down at 97.81.
Financials – The September 30 year bond is down 7 ticks and is trading at 139.10.
Indices – The September S&P
500 emini ES contract is up at 1638.75 and is up 20 ticks.
Gold – The August
gold contract is trading down at 1377.60 and is down 54 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 up and the US dollar
is trading lower which is 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.
Asia closed mixed with the Aussie, Nikkei and Sensex closing lower. As of
this writing all of Europe is trading up.
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 at 8:30 AM EST. This is major.
3. CPI is out at 8:30 AM EST. This is major.
4. Housing Starts are out at 8:30 AM EST. This is major.
5. G8 Meeting Day Two.
On Friday we said our bias was to the upside as the Bonds were correlated with the indices and Asia closed higher with Europe trading higher. The net result? The
Dow gained 110 points and the other indices gained as well. Today the markets aren't correlated however our bias is to the upside. Why? The USD and Bonds are correlated and are trading lower, this is bullish for the markets and indices. However kindly bear in mind that we have 4 major economic reports due out at 8:30 AM EST and these could drive the markets in any direction. Could
this change? Of Course. Remember anything can happen in a volatile market.
Yesterday we said our bias was to the upside as the Bonds were correlated with the indices and Asia closed higher with Europe trading higher. We had good economic reports that helped matters. Both the Empire State Manufacturing Index and NAHB Housing numbers came in better than expected and with that the markets took off. It seems that of late the markets are responding to economic reports as they should; meaning good economic numbers give good market results. Whether or not this trend stays in place or changes is yet to be seen but as always we'll 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 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 declining. This is not normal. Think of it this way. If the
stock
market is trading lower, it's safe to assume that the crude market will
follow suit and vice versa. Crude trades with the expectation that
business activity is expanding. The barometer of which is the equities
or stock market. If you view both the crude and index futures side by
side you will notice this. Yesterday August crude dropped to a low of
97.38 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 97.40 a barrel and resistance
at 98.69. 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 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.barchart.com/headlines/story/10110400/leadership-or-lack-thereof
http://www.forexcrunch.com/asian-contagion/
http://www.traderslog.com/john-karnas/
Remember
that without knowledge of order flow
we as traders are risking our hard earned capital and the Smart Money
will have
no issue taking it from us. Regardless of whatever platform you use for
trading purposes you need to make sure it's monitoring order flow.
Sceeto does an excellent job at this. To fully capitalize on
this newsletter it is important that the reader understand how the
various market
correlate. More on this in subsequent editions.
Good Morning Traders,
As
of this writing 5:05 AM EST, here’s what we see:
US Dollar –Up at 80.925, the Sept US Dollar is up 80 ticks and is trading at 80.925.
Energies – July Oil is up at 98.30.
Financials – The September 30 year bond is down 1 tick and is trading at 140.10.
Indices – The June S&P
500 emini ES contract is up at 1631.50 and is up 52 ticks.
Gold – The August
gold contract is trading down at 1386.20 and is down 14 ticks from its close.
Initial Conclusion: This is not a correlated market. The dollar is up+ and
oil is up+ which is not 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.
All of Asia closed higher with the exception of the Shanghai exchange which closed fractionally lower. As of
this writing all of Europe is trading up.
Possible challenges to
traders today is the following
1. Empire State Manufacturing Index is out at 8:30 AM EST. This is major.
2. NAHB Housing Market Index is out at 10 AM EST. This is major.
3. G8 Meeting starts today.
On Friday we said our bias was
neutral as we had a number of major reports due that we felt could drive the markets in any direction. The net result? The
Dow dropped 106 points and the other indices dropped as well. Today we are not dealing with a correlated market however our bias is to the upside. Why? Asia closed higher and Europe is currently trading higher. The Bonds are staring to trade lower which is bullish for the markets and indices. Could
this change? Of Course. Remember anything can happen in a volatile market.
On Friday we said our bias was neutral, however subscribers to Market Tea Leaves who listened to our Market Bias video heard me say that ordinarily I say our bias is to the downside but because we had major economic reports that could serve to drive the markets in any direction. Well the economic reports came and went and they weren't too stellar. PPI came in higher and the talking heads will have you believe that this is positive. It isn't positive because it means that Producers (aka manufacturers) are paying more money for raw materials and components. Guess what? Eventually consumers may be paying for that hike. Current Account came in better than expected which is good for the government as it shows austerity is working from a fiscal point of view. However TIC purchases are down, capacity utilization down, industrial production flat, consumer sentiment down, consumer inflation expectation higher. This is not good for an economy whose main source of GDP is consumer spending. 70% of the US economy is driven by consumer spending and these reports do not bode well for that. So on one hand the folks in DC will state "see, it's working; we're spending less" but what they haven't quite figured out yet is that this austerity policy will also stump growth and growth is what's needed. Of course they'll also state "well look at the job growth figures, we've created more jobs than expected last month." Oh really? Is that why the unemployment rate increased last month? If that were the case it should have decreased. Even the IMF has stated that the US economy is in danger of falling back into a downturn. Now I'm not stating that this will occur nor do I know that but I'm wondering when the folks in DC are going to wake up and realize that this economy needs to grow and not by a paltry 2 percent annually. It needs to grow by 5% or greater to resolve many of the economic issues we face. Lets face it; many of the issues we have: balanced budget, tax revenues (or lack thereof), job creation, etc. would be solved by a growing economy. I think we need a forward thinking group of folks in DC to realize that...
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
In April I had the opportunity to interview Mr. Dan Cook, Director of
Business Development for Nadex.com Nadex is an exchange that is devoted
solely to binary options. Recently there's been quite a bit of
misinformation regarding Binary Options and how they work. Some have
even speculated that opening a Binary Option trading account is the same
as identity theft. My objective is to dispel these myths and to alert
the retail trader as to what a binary option is, how to trade them, how
to amend an order and how to exit a trade for profit. Nadex is a
Chicago based exchange that abides by the rules of CFTC. I've created
an eBook that will discuss and show how a trader can capitalize on this
innovative instrument. This is an 8 page eBook loaded with charts,
diagrams etc. Each chart/diagram shown has been approved by Nadex and
has gone thru their compliance department. When last I heard compliance
departments for exchanges are tough when it comes to
misrepresentation. Feel free to download and to share with those you
know. It's time we saw some innovation....
To View and Download this article, go to:
https://markettealeaves.sharefile.com/d/s59fb4ac49ca47508
My interview with Dan can be viewed at:
http://youtu.be/ENRRbwH6A_o
Please
note the video is about a half hour in length and we plan on producing
more in the near future. Also note that in the near future we will have
other videos where we will interview various trading leaders.
As
I write this the crude markets are trading higher and the US
Dollar is advancing. This is not normal. Think of it this way. If the
stock
market is trading lower, it's safe to assume that the crude market will
follow suit and vice versa. Crude trades with the expectation that
business activity is expanding. The barometer of which is the equities
or stock market. If you view both the crude and index futures side by
side you will notice this. On Friday August crude dropped to a low of
96.42 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 96.11 a barrel and resistance
at 99.55. This could change. All we
need do is look at what happened last fall when crude was trading over
$100.00 a barrel. We'll have to monitor and see. Remember that crude is
the only commodity that is reflected immediately at the gas pump.
Future Challenges:
- Budget Battle - ongoing.
- Debt Ceiling in the August time frame.
- Asian Contagion - happening now
Crude
oil is trading higher and the US Dollar is advancing. This is not normal.
Crude typically makes 3 major moves (long or short) during the
course of any trading day: around 7 AM EST, 9 AM EST and 2 PM EST when
the crude market closes. If crude makes major moves around those time
frames, then this would suggest normal trending, if not it would suggest
that something is not quite right. If you feel compelled to trade
consider doing so after 10 AM when the economic 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/10110400/leadership-or-lack-thereof
http://www.forexcrunch.com/asian-contagion/
http://www.traderslog.com/john-karnas/
Remember
that without knowledge of order flow
we as traders are risking our hard earned capital and the Smart Money
will have
no issue taking it from us. Regardless of whatever platform you use for
trading purposes you need to make sure it's monitoring order flow.
Sceeto does an excellent job at this. To fully capitalize on
this newsletter it is important that the reader understand how the
various market
correlate. More on this in subsequent editions.
Good Morning Traders,
As
of this writing 5:35 AM EST, here’s what we see:
US Dollar –Up at 81.100, the Sept US Dollar is up 138 ticks and is trading at 81.100.
Energies – July Oil is up at 97.09.
Financials – The September 30 year bond is up 21 ticks and is trading at 140.12.
Indices – The June S&P
500 emini ES contract is down at 1635.25 and is down 6 ticks.
Gold – The August
gold contract is trading up at 1380.10 and is up 23 ticks from its close.
Initial Conclusion: This is not a correlated market. The dollar is up+ and
oil is up+ which is not normal and the 30 year bond is trading higher. The Financials should always correlate
with
the US dollar such that if the dollar is lower then bonds should follow
and vice versa. The indices are down and the US dollar
is trading higher which is correlated. Gold is trading higher which is not correlated with the
US
dollar trading up. I tend to believe
that Gold has an inverse
relationship with the US Dollar as when the US Dollar is down, Gold
tends to rise in value and vice-versa. Think of it as a seesaw, when one
is up the other should be down. I point this out to you to make you
aware that when we don't have a correlated market, it means something is
wrong. As traders you need to be aware of this and proceed with your
eyes wide open.
All of Asia closed higher. As of
this writing all of Europe is trading up. Japan finally broke the spell that's been looming over the markets this past week, probably as a follow thru with what happened yesterday on the US markets. There's a report basically stating that Ben Bernanke will attempt to calm the markets down relative to backing off their QE program and that he'll do it at the upcoming FOMC Meeting next week. In all likelihood by the time he does that the market will be expecting it and will be calm. The bad news is if he doesn't say anything about it the market will probably sell off with the idea an concept of "they lied to us". This is the problem when rumors don't manifest. This report is sating "unnamed officials" and that could be anyone. So the market buys into this and goes higher. Sounds like the Smart Money Network at work again...
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. Current Account is out at 8:30 AM EST. This is not major.
4. Capacity Utilization Rate is out at 9:15 AM EST. This is not major.
5. Industrial Production is out at 9:15 AM EST. This is not major.
6. Preliminary UOM Consumer Sentiment is out at 9:55 AM EST. This is major.
7. Preliminary UOM Inflation Expectations is out at 9:55 AM EST. This is not major.
Yesterday we said our bias was neutral as we had a number of major reports due and Europe and Asia both traded to the downside. Additionally the markets weren't correlated but we did have good economic news early in the AM that set the tone for the day. The net result? The
Dow gained 181 points and the other indices gained as well. Today the markets
aren't correlated and hence our bias is neutral. Additionally we have
major economic reports that could drive the markets in any direction
today. Could
this change? Of Course. Remember anything can happen in a volatile market.
Yesterday the Smart Money finally got into the act and decided to break the trend and drive the markets higher. Yesterday morning I stated that Thursday was going to be a critical day as it would have marked the beginning of a downtrend in the markets if it fell. Fortunately we had good economic news in terms of retail sales, unemployment claims, etc. that set the tone for the trading day and even Europe looked better. Today we do have some major economic reports so we'll have to see how the markets fare. Additionally we'll need to keep our eye on Japan and what they do as clearly this week the Nikkei has taken its toll on markets worldwide.
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
In April I had the opportunity to interview Mr. Dan Cook, Director of
Business Development for Nadex.com Nadex is an exchange that is devoted
solely to binary options. Recently there's been quite a bit of
misinformation regarding Binary Options and how they work. Some have
even speculated that opening a Binary Option trading account is the same
as identity theft. My objective is to dispel these myths and to alert
the retail trader as to what a binary option is, how to trade them, how
to amend an order and how to exit a trade for profit. Nadex is a
Chicago based exchange that abides by the rules of CFTC. I've created
an eBook that will discuss and show how a trader can capitalize on this
innovative instrument. This is an 8 page eBook loaded with charts,
diagrams etc. Each chart/diagram shown has been approved by Nadex and
has gone thru their compliance department. When last I heard compliance
departments for exchanges are tough when it comes to
misrepresentation. Feel free to download and to share with those you
know. It's time we saw some innovation....
To View and Download this article, go to:
https://markettealeaves.sharefile.com/d/s59fb4ac49ca47508
My interview with Dan can be viewed at:
http://youtu.be/ENRRbwH6A_o
Please
note the video is about a half hour in length and we plan on producing
more in the near future. Also note that in the near future we will have
other videos where we will interview various trading leaders.
As
I write this the crude markets are trading higher and the US
Dollar is advancing. This is not normal. Think of it this way. If the
stock
market is trading lower, it's safe to assume that the crude market will
follow suit and vice versa. Crude trades with the expectation that
business activity is expanding. The barometer of which is the equities
or stock market. If you view both the crude and index futures side by
side you will notice this. Yesterday July crude dropped to a low of
95.02 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.
- Asian Contagion - happening now
Crude
oil is trading higher and the US Dollar is advancing. This is not normal.
Crude typically makes 3 major moves (long or short) during the
course of any trading day: around 7 AM EST, 9 AM EST and 2 PM EST when
the crude market closes. If crude makes major moves around those time
frames, then this would suggest normal trending, if not it would suggest
that something is not quite right. If you feel compelled to trade
consider doing so after 10 AM when the economic 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/10110400/leadership-or-lack-thereof
http://www.forexcrunch.com/asian-contagion/
http://www.traderslog.com/john-karnas/
Remember
that without knowledge of order flow
we as traders are risking our hard earned capital and the Smart Money
will have
no issue taking it from us. Regardless of whatever platform you use for
trading purposes you need to make sure it's monitoring order flow.
Sceeto does an excellent job at this. To fully capitalize on
this newsletter it is important that the reader understand how the
various market
correlate. More on this in subsequent editions.
