Good Morning Traders,
As
of this writing 5:05 AM EST, here’s what we see:
US Dollar –Down at 82.480, the Sept US Dollar is down 153 ticks and is trading at 82.480.
Energies – August Oil is up at 95.90.
Financials – The September 30 year bond is up 25 ticks and is trading at 135.19.
Indices – The September S&P
500 emini ES contract is up at 1577.50 and is up 37 ticks.
Gold – The August
gold contract is trading up at 1286.60 and is up 95 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.
Asia closed mixed with about half the exchanges closing higher and the other closing lower. The good news is the Shanghai exchange that caused the problem yesterday closed fractionally lower. As of this writing all of Europe is trading higher.
Possible challenges to
traders today is the following
1. Core Durable Goods Orders are out at 8:30 AM EST. This is major.
2. Durable Goods are out at 8:30 AM EST. This is major.
3. S&P Case Schiller HPI is out at 9 AM EST. This is major.
4. HPI is out at 9 AM EST. This is major.
5. CB Consumer Confidence is out at 10 AM EST. This is major.
6. New Home Sales is out at 10 AM EST. This is major.
7. Richmond Manufacturing Index is out at 10 AM EST. This is major.
Yesterday we said our bias was to the downside as the Bonds weren't correlated with the USD and Gold was trading lower. The net result? The Dow dropped 139 points and the other indices didn't fare too well either. Today the markets aren't correlated with the culprit being Bonds. If the Bonds were trading lower we would have a completely correlated market to the upside, however our bias is to the upside today. Asia has started to rebound and Europe is trading higher. Bear in mind that we have a number of major reports today that could drive the markets in any direction. Could
this change? Of Course. Remember anything can happen in a volatile market.
On Sunday evening the Shanghai exchange dropped by 5.3% which was the biggest drop for this market since August, 2009 when it dropped by 6.7%. This in turn caused the Asian markets to drop significantly which in turn effected Europe and eventually the US markets. Are we seeing more Asian Contagion whereby what happens in the Far East will eventually effect the US? Shanghai is significant as China is now the world's number 2 economy and the US is tied to China whether we like it or not but I guess that's one of the "benefits" of outsourcing. Sounds great going in and any Accountant can easily cost justify but there are ramifications. One of those ramifications are if they have a downturn, it will easily affect the US as it could mean orders placed here won't be filled by Chinese suppliers and US firms will have late and backlogged orders which will be reflected in quarterly earnings and we all know what that means... Wouldn't it be "innovative" if American companies started to produce their own goods again? Guess nobody thought about a backup plan, just in case...
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
92.68 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 93 a barrel and resistance
at 97. 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/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 82.775, the Sept US Dollar is up 258 ticks and is trading at 82.775.
Energies – August Oil is down at 93.36.
Financials – The September 30 year bond is down 35 ticks and is trading at 133.31.
Indices – The September S&P
500 emini ES contract is down at 1572.00 and is down 48 ticks.
Gold – The August
gold contract is trading down at 1283.90 and is down 82 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, some to the tune of triple digits. As of this writing all of Europe is trading lower.
Possible challenges to
traders today is the following
1. No Major economic news.
2. Lack of economic news.
On Friday we said our bias was to the upside as Europe was trading higher (at the time) and the USD was trending higher. The net result? The Dow gained 41 points, the S&P gained 4 but the Nasdaq fell 8 points probably due to Oracle's miss on Earnings Thursday night. Today the markets aren't correlated with the Bonds and Gold trading lower, hence our bias is to the downside today. Could
this change? Of Course. Remember anything can happen in a volatile market.
On Friday we said our bias was to the upside as the Nikkei in Japan rebounded on Thursday night and Europe was trending higher. We also felt that after two days of losses, the Smart Money might be willing to put money back on the table. They didn't disappoint as the Dow gained. It was in effect a volatile session as the markets were on a roller coaster ride going from positive to negative territory and finally settling in positive ground, although slightly. It would also appear that Quadruple Witching Friday didn't hurt as usually it can....
On Friday, June 7th I had the
opportunity to interview Mr. Sal Spedele regarding ObamaCare. Sal is a
20 year veteran of the Insurance Industry and we spoke at length
regarding the ramifications of the Patient Protection and Affordable
Care Act aka ObamaCare. If you are at all concerned about the future of
Health Insurance in the United States, then you need to listen to this
interview and act on it. Sal and his team is offering complimentary
advisory services to inform you of your rights and ramifications of this
Act. To download the article on ObamaCare, go to:
https://markettealeaves.sharefile.com/d/s978a806ae2e41569
To view my discussion with Sal:
http://youtu.be/sR_ine0b5Ro
As
readers are probably aware I don't trade equities. While we're on
this discussion, let's define what is meant by a good earnings report. A
company must exceed their prior quarter's earnings per share and must
provide excellent forward guidance. Any falloff between earning per
share or forward guidance will not bode well for the company's shares. This is one of the
reasons I don't
trade equities but prefer futures. There is no earnings reports with
futures and we don't have to be concerned about lawsuits, scandals,
malfeasance, etc.
Anytime
the market isn't correlated it's giving you a clue that something isn't
right and you should proceed with caution. Today our bias is to the downside.
Could this change? Of course. In a
volatile market anything can happen. We'll have to monitor and see.
In
May, I spoke with John Karnas, CEO of Trend Following Trades. John has
an interesting background as he was a trader for a number of years
prior to buying Trend Following Trades. John is a believer in Trading
Plans and has a very precise method of developing aspiring traders. To
download the article I've written, go to:
https://markettealeaves.sharefile.com/d/sdf8f77f6e2c4347a
My discussion with John can be viewed at:
http://youtu.be/uVwHpMq1604
Please
note the video is about a half hour in length and we plan on producing
more in the near future. Also note that in the near future we will have
other videos where we will interview various trading leaders.
As
I write this the crude markets are trading lower and the US
Dollar is advancing. This is normal. Think of it this way. If the
stock
market is trading lower, it's safe to assume that the crude market will
follow suit and vice versa. Crude trades with the expectation that
business activity is expanding. The barometer of which is the equities
or stock market. If you view both the crude and index futures side by
side you will notice this. On Friday August crude dropped to a low of
93.13 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 93 a barrel and resistance
at 97. 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/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 5:40 AM EST, here’s what we see:
US Dollar –Down at 82.095, the Sept US Dollar is down 1 tick and is trading at 82.095.
Energies – August Oil is up at 95.32.
Financials – The September 30 year bond is up 14 ticks and is trading at 136.18.
Indices – The September S&P
500 emini ES contract is up at 1594.75 and is up 43 ticks.
Gold – The August
gold contract is trading up at 1289.60 and is up 34 ticks from its close.
Initial Conclusion: This is not a correlated market. The dollar is down- and
oil is up+ which is normal but the 30 year bond is trading higher. The Financials should always correlate
with
the US dollar such that if the dollar is lower then bonds should follow
and vice versa. The indices are 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 with the exception of the Japanese Nikkei exchange.
As of
this writing all of Europe is trading up. It would appear as though the Japanese have broken the downward trend set in place Wednesday afternoon after the Fed news conference. Europe is trading higher at this hour, so the question is will the US markets follow Europe and trade higher?
Possible challenges to
traders today is the following
1. No Major economic news.
2. Lack of economic news.
3. Quadruple Witching Friday.
Yesterday we said our bias was neutral because the markets worldwide were on a global retreat. Not only was every exchange and index in retreat but Gold fell below 1,300.00 an ounce and quite frankly I can't recall the last time it traded at that level. The Dow dropped 354 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? Europe is trading higher, the USD is trading lower, oil and Gold are starting to rebound. Could
this change? Of Course. Remember anything can happen in a volatile market.
Yesterday we said our bias was neutral as we had major economic news that could drive the markets in any direction. And it did; to the downside with no glimmer of rebounding at all today. The economic news was pretty good. New Home Sales and Philly Fed were excellent reports. Not enough to drive the market higher. The only dim spot was Unemployment Claims that came in higher than expected. Today we have no economic news that could possibly drive the markets, so perhaps after two days of triple digit losses the Smart Money may decide to put some money back on the table. The potential bright spot today is Quadruple Witching Friday. This occurs four times a year and encompasses the rollover of Stock Index Futures, Options on Stock Index Futures, Stock Options and Single Stock Futures. Ordinarily Quadruple Witching is considered a volatile session, perhaps that may not be the case today, 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 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
94.63 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 94 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 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/10110400/leadership-or-lack-thereof
http://www.forexcrunch.com/asian-contagion/
http://www.traderslog.com/john-karnas/
Remember
that without knowledge of order flow
we as traders are risking our hard earned capital and the Smart Money
will have
no issue taking it from us. Regardless of whatever platform you use for
trading purposes you need to make sure it's monitoring order flow.
Sceeto does an excellent job at this. To fully capitalize on
this newsletter it is important that the reader understand how the
various market
correlate. More on this in subsequent editions.
Good Morning Traders,
As
of this writing 4:35 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.
