Pre-Market Global Review - 4/22/13 - Affordable Care?

Good Morning Traders,
 
As of this writing 4:20 AM EST, here’s what we see:
 
US Dollar –Up at 82.895 the US Dollar is up 49 ticks and is trading at 82.895.         
Energies – June Oil is up at 88.32.  
Financials – The June 30 year bond is down 14 ticks and is trading at 147.22.   
Indices – The June S&P 500 emini ES contract is up at 1553.00 and is up 20 ticks.  
Gold – The June gold contract is trading up at 1421.20 and is up 256 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 lower.  The Financials should always correlate with the US dollar such that if the dollar is lower then bonds should follow and vice versa.  The indices are up and the US dollar is trading higher which is not correlated.  Gold is trading higher which is not correlated with the US dollar trading 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 with the exception of Shanghai closed higher.  As of this writing all of Europe is trading higher. 

  Possible challenges to traders today is the following    
1.  FOMC Member Dudley speaks at 8:30 AM EST.  
2.  Existing Home Sales are out at 10 AM EST.  This is major.        


On Friday we said our bias was to the upside as the markets were correlated as such.  Whereas the Dow did close higher by 11 points, it was a bumpy ride.  Today the markets (as of this writing) aren't correlated however our bias is to the upside today.  The reason is because the bond market is trading lower and Gold is trading higher.  Gold has proven itself to be a bellwether in terms of market direction.  Look at what happened last week when it dropped.   Could this change? Of Course.  Remember anything can happen in a volatile market.
 
As it relates to "Affordable Care" I happen to be in a unique position.  I'm a licensed insurance professional in my state of domicile.  Here in New Jersey (aka Chris Christieland)  we have some of the toughest regulations for insurance companies in the nation.  Recently I had the opportunity to explore some of the ramifications of the Affordable Care Act aka Obamacare.  When this law was first enacted in 2010, I like many of my countrymen applauded the act as the United States is the only civilized nation in the Western world that doesn't have national healthcare.  However, there are some cracks in the foundation, so to speak.  First, the threshold for "vouchers" is $93,000, meaning that if a family doesn't earn a minimum of that amount, they're entitled to "vouchers" or tax credits to help pay for premiums.  You might say "well that sounds like a good deal."  It would be except that the law makes no stipulation on what is considered "affordable."  Most major insurance carriers are publicly traded entities, which means they are beholden to share owners, not policyholders.  What does anyone think is going to happen if by law these firms must offer benefits to people who wouldn't ordinarily qualify for benefits?  The premiums will go up.  Case-in-point a family that currently pays $1,100.00 a month for benefits on Cobra and now has to get an individual plan will see that premium increase to  upwards past $2,000.00 and the so-called voucher will only pay for half that amount.  New Jersey does not have cobra continuation and some well know firms have refused to offer insurance here because the regulations are that tough.  I assumed when this law was passed that the government would pay for benefits for those persons who couldn't afford insurance by other means.  Nope.  Everyone pays.  I suspect that as time progresses we'll find that the Affordable Care Act isn't that affordable.
 
 As readers are probably aware I don't trade equities.   While we're on this discussion, let's define what is meant by a good earnings report.  A company must exceed their prior quarter's earnings per share and must provide excellent forward guidance.  Any falloff between earning per share or forward guidance will not bode well for the company's shares.  This is one of the reasons I don't trade equities but prefer futures.  There is no earnings reports with futures and we don't have to be concerned about lawsuits, scandals, malfeasance, etc.

Anytime the market isn't correlated it's giving you a clue that something isn't right and you should proceed with caution. Today our bias is to the upside.  Could this change?  Of course.  In a volatile market anything can happen.  We'll have to monitor and see.  
 
On Friday, April 5th I had the opportunity to interview Carl Weiss from Algo Futures.  We talked at length about his thoughts on the future of the markets and new and upcoming endeavors.  Ultimately this is the story of an American entrepreneur and what he had to go thru to create a solution that can be used by any trader.  If any reader wants to know and is curious about what it takes to be self-made in America, then you need to listen to this.  Additionally our friends at TradersLog.com have graciously published my article on this subject.  It can be viewed at:
 http://www.traderslog.com/interview-with-carl-weiss/    
My interview with Carl can be viewed at:

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 slightly 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 June crude dropped to a low of 87.82 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 85.00 a barrel and resistance at 92.  This could change.  All we need do is look at what happened last fall when crude was trading over $100.00 a barrel. We'll have to monitor and see.  Remember that crude is the only commodity that is reflected immediately at the gas pump. 



Future Challenges:
- Budget Battle - ongoing.
- Debt Ceiling in the August time frame.      
- European Contraction - happening now 


Crude oil is trading slightly higher 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.forexcrunch.com/effects-of-sequestrationthus-far/
http://www.investing.com/analysis/us-economy:-why-we%27re-here,-how-did-this-happen%20-163629

Remember that without knowledge of order flow we as traders are risking our hard earned capital and the Smart Money will have no issue taking it from us.  Regardless of whatever platform you use for trading purposes you need to make sure it's monitoring order flow.  Sceeto does an excellent job at this.  To fully capitalize on this newsletter it is important that the reader understand how the various market correlate.  More on this in subsequent blogs.



To view previous issues of Market Tea Leaves visit our archive.

Pre-Market Global Review - 4/19/13 - Dark Cap, White Cap

Good Morning Traders,
 
As of this writing 4:35 AM EST, here’s what we see:
 
US Dollar –Down at 82.660 the US Dollar is down 21 ticks and is trading at 82.660.       
Energies – June Oil is up at 88.58.
Financials – The June 30 year bond is down 14 ticks and is trading at 148.00. 
Indices – The June S&P 500 emini ES contract is up at 1542.75 and is up 35 ticks.  
Gold – The June gold contract is trading up at 1413.20 and is up 207 ticks from its close.
  
Initial Conclusion: This is a correlated market to the upside.  The dollar is down- and oil is up+ which is 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 higher which is correlated with the US dollar trading down.   I tend to believe that Gold has an inverse relationship with the US Dollar as when the US Dollar is down, Gold tends to rise in value and vice-versa. Think of it as a seesaw, when one is up the other should be down.   I point this out to you to make you aware that when we don't have a correlated market, it means something is wrong.  As traders you need to be aware of this and proceed with your eyes wide open. 

All of Asia closed higher.  As of this writing all of Europe is trading higher. 

  Possible challenges to traders today is the following  
1.  No Major Economic news for the US markets.
2.  Lack of major economic news.       
3.  FOMC Member Stein speaks at 12 noon. 
4.  Day Two - G20 meeting.
5.  Day One - IMF meeting.

Yesterday we said our bias was to the upside as the markets were correlated as such.  Unfortunately we had not too stellar economic reports that drove the markets lower.  Unemployment Claims came in greater than expected, Philly Fed Manufacturing Index came in lower than expected and the CB Leading Indicators came in lower than expected.  As such the Dow dropped 82 points.  Today the markets are correlated to the upside.  Hence our bias is to the upside.  Could this change? Of Course.  Remember anything can happen in a volatile market.
 
Last night I watched the news because I like to keep abreast of what's happening either from a political or financial point of view.  The political point of view is because the markets in the United States are very much driven by what's going on in DC.  In any case, I'm watching the news and all they kept talking about were two men: one in a dark baseball cap and the other with a white cap turned around.  This is in tandem with the bombing that took place in Boston this past Monday.  Now our thoughts are for the victims of that tragedy and I like all Americans want to see justice done.  But I wouldn't want this to turn into a vigilante hunt and apparently the media is doing precisely that.  The commentator (who is quite well known) tried to convince the listening audience that these two men were the bombers.  In other words they're guilty before proven innocent.  I couldn't believe it.  The FBI who is covering the investigation claims to have photos of the white cap guy laying his backpack, yet we don't see it.  They claim that he dined in a "foreign" restaurant prior to the bombing, yet we don't see it.  The commentator even said during the broadcast "he's guilty" and one of his guests pointed out that the FBI still has to make a case out of it and still the commentator claimed "there's no case to be made, he's guilty."  The FBI doesn't know the names of these two individuals and has at best highly circumstantial evidence.  I think that they released these photos because they want info on these men and will chase every lead regardless of where it comes from.  If that's the case every ex-brother-in-law is in danger of being questioned.  Looking at the bigger picture, I think this country fell asleep after 2011.  After all Bin Laden was killed, there's no more terrorists, right?  This was the first successful attack after 2011, if in fact it turns out to be an act of terror.  Who told us last year that we were safe?  Who told us that terrorism was negated?  You guessed it, our newly elected President did.  Why do you think Obama went to Boston and addressed the State Congress?  I have nothing against this President.  I believe him to be a humane individual but I wish he stop falling asleep behind the wheel, as he often does.  
 
 As readers are probably aware I don't trade equities.   While we're on this discussion, let's define what is meant by a good earnings report.  A company must exceed their prior quarter's earnings per share and must provide excellent forward guidance.  Any falloff between earning per share or forward guidance will not bode well for the company's shares.  This is one of the reasons I don't trade equities but prefer futures.  There is no earnings reports with futures and we don't have to be concerned about lawsuits, scandals, malfeasance, etc.
 
Anytime the market isn't correlated it's giving you a clue that something isn't right and you should proceed with caution. Today our bias is to the upside.  Could this change?  Of course.  In a volatile market anything can happen.  We'll have to monitor and see.  
 
On Friday, April 5th I had the opportunity to interview Carl Weiss from Algo Futures.  We talked at length about his thoughts on the future of the markets and new and upcoming endeavors.  Ultimately this is the story of an American entrepreneur and what he had to go thru to create a solution that can be used by any trader.  If any reader wants to know and is curious about what it takes to be self-made in America, then you need to listen to this.  Additionally our friends at TradersLog.com have graciously published my article on this subject.  It can be viewed at:
 http://www.traderslog.com/interview-with-carl-weiss/    
My interview with Carl can be viewed at:

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 June crude dropped to a low of 86.50 a barrel and held.  We'll have to monitor and see if crude either goes lower or holds at the present level.   We'll have to see where crude falls to before we can establish a support and resistance level.  At this time crude can fall further.  This could change.  All we need do is look at what happened last fall when crude was trading over $100.00 a barrel. We'll have to monitor and see.  Remember that crude is the only commodity that is reflected immediately at the gas pump. 



Future Challenges:
- Budget Battle - ongoing.
- Debt Ceiling in the August time frame.      
- European Contraction - happening now 


Crude oil is trading 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.forexcrunch.com/battle-of-the-budgets-dead-ahead/

http://www.barchart.com/headlines/story/9204041/the-debt-ceiling-and-its-impact-on-the-global-economy    
http://www.forexcrunch.com/effects-of-sequestrationthus-far/


Remember that without knowledge of order flow we as traders are risking our hard earned capital and the Smart Money will have no issue taking it from us.  Regardless of whatever platform you use for trading purposes you need to make sure it's monitoring order flow.  Sceeto does an excellent job at this.  To fully capitalize on this newsletter it is important that the reader understand how the various market correlate.  More on this in subsequent blogs.



To view previous issues of Market Tea Leaves visit our archive.

Pre-Market Global Review - 4/18/13 - GOP - Guns Over People

Good Morning Traders,
 
As of this writing 5:20 AM EST, here’s what we see:
 
US Dollar –Down at 82.700 the US Dollar is down 91 ticks and is trading at 82.700.      
Energies – June Oil is up at 87.68.
Financials – The June 30 year bond is down 2 ticks and is trading at 147.29. 
Indices – The June S&P 500 emini ES contract is up at 1540.00 and is up 12 ticks.
Gold – The June gold contract is trading up at 1386.90 and is up 42 ticks from its close.

Quick Note: Unless otherwise shown the above contract months are now June.   

Initial Conclusion: Finally a correlated market to the upside.  The dollar is down- and oil is up+ which is 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 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 the Aussie, Hang Seng and Nikkei trading lower and the rest of Asia closed higher.  As of this writing all of Europe is trading higher.
 
Possible challenges to traders today is the following
1.  Unemployment Claims are out at 8:30 AM EST.  This is major.
2.  Philly Fed Manufacturing Index is out at 10 AM EST.  This is major.       
3.  CB Leading Index is out at 10 AM EST.  This is major 
4.  Natural Gas Storage is out at 10:30 AM EST.  This will move the Nat Gas market.
5.  FOMC Member Raskin speaks at 12 Noon.

Yesterday we said our bias was to the downside as the market were correlated as such.  The net result?  The Dow dropped 138 points.  Today the markets are correlated to the upside.  Hence our bias is to the upside.  Could this change? Of Course.  Remember anything can happen in a volatile market.
 
Last night this President decided to slam Congress over not passing extended background checks for gun control.  Republican Senator Ayotte decided to vote against it as she felt it was an undue and un-necessary government intrusion on private citizens.  Obama slammed it hard accusing the gun lobby of lying about the bill.  Well, Mr. President if you feel that strongly about it, why don't you just issue an Executive Order and do something about it?  After all 92% of Americans think its a good idea and you no longer need to be concerned about re-election.  When are you going to realize that the GOP aren't your friends and you can wine them and dine them to your hearts content and guess what?  They're still not your friends!  To add insult to injury the Republican Senators in Congress are now demanding a "reboot" for digital medical records claiming that they'll never be ready in time for January.   Coming from the software industry, I can only imagine what happened.  Someone probably said "well you know we need to analyze what has to be done in order to determine the way to implement the proposed solution, we need to do an "as is" study in order to determine the "to be" solution"  " And you know that's going to require capital to do so."  In the meantime they've had over 3 years to do so and may miss the targeted implementation date.  I cannot begin to tell you how many times I've heard this same nonsense from the Fortune 1000.  They'll all looking for capital to do a "study" because they have to get it "right".  Because you know that if they don't get it right someone's head will wind up on a chopping block and the CIO is determined that it won't be their head.  It would appear to me that this President thinks all he has to do is sign bills and auto magically it will just appear.  As anyone knows who's responsible for making things happen, you can approve something, you can fund something, but there's no guarantee that it will happen unless you stay on top of it.  I'm not suggesting micro-managing but I am saying you can hold meetings to insure that the targeted deadlines are met.  You can hold people accountable.  Anyone whose ever managed anything knows what I'm talking about.
 
 As readers are probably aware I don't trade equities.   While we're on this discussion, let's define what is meant by a good earnings report.  A company must exceed their prior quarter's earnings per share and must provide excellent forward guidance.  Any falloff between earning per share or forward guidance will not bode well for the company's shares.  This is one of the reasons I don't trade equities but prefer futures.  There is no earnings reports with futures and we don't have to be concerned about lawsuits, scandals, malfeasance, etc.
 
Anytime the market isn't correlated it's giving you a clue that something isn't right and you should proceed with caution. Today our bias is to the upside.  Could this change?  Of course.  In a volatile market anything can happen.  We'll have to monitor and see.  
 
On Friday, April 5th I had the opportunity to interview Carl Weiss from Algo Futures.  We talked at length about his thoughts on the future of the markets and new and upcoming endeavors.  Ultimately this is the story of an American entrepreneur and what he had to go thru to create a solution that can be used by any trader.  If any reader wants to know and is curious about what it takes to be self-made in America, then you need to listen to this.  Additionally our friends at TradersLog.com have graciously published my article on this subject.  It can be viewed at:
 http://www.traderslog.com/interview-with-carl-weiss/    

My interview with Carl can be viewed at:

 
 
 

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 June crude dropped to a low of 86.06 a barrel in the overnight session and as of this writing is starting to rebound.  We'll have to monitor and see if crude either goes lower or holds at the present level.   We'll have to see where crude falls to before we can establish a support and resistance level.  At this time crude can fall further.  This could change.  All we need do is look at what happened last fall when crude was trading over $100.00 a barrel. We'll have to monitor and see.  Remember that crude is the only commodity that is reflected immediately at the gas pump. 



Future Challenges:
- Budget Battle - ongoing.
- Debt Ceiling in the August time frame.      
- European Contraction - happening now 


Crude oil is trading 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.forexcrunch.com/battle-of-the-budgets-dead-ahead/

http://www.barchart.com/headlines/story/9204041/the-debt-ceiling-and-its-impact-on-the-global-economy    
http://www.forexcrunch.com/effects-of-sequestrationthus-far/


Remember that without knowledge of order flow we as traders are risking our hard earned capital and the Smart Money will have no issue taking it from us.  Regardless of whatever platform you use for trading purposes you need to make sure it's monitoring order flow.  Sceeto does an excellent job at this.  To fully capitalize on this newsletter it is important that the reader understand how the various market correlate.  More on this in subsequent blogs.



To view previous issues of Market Tea Leaves visit our archive.

Pre-Market Global Review - 4/17/13 - Effects of the Sequester ...thus far

Good Morning Traders,
 
As of this writing 5:50 AM EST, here’s what we see:
 
US Dollar –Up at 82.085 the US Dollar is up 262 ticks and is trading at 82.085.       
Energies – June Oil is down at 88.21.
Financials – The June 30 year bond is up 3 ticks and is trading at 147.24. 
Indices – The June S&P 500 emini ES contract is down at 1560.00 and is down 36 ticks.
Gold – The June gold contract is trading down at 1384.70 and is down 34 ticks from its close.

Quick Note: Unless otherwise shown the above contract months are now June.   

Initial Conclusion: This is a correlated market, unfortunately it is correlated to the downside.  The dollar is up+ and oil is down- which is normal and the 30 year bond is trading 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 and Nikkei higher and the rest of Asia closed lower.  As of this writing all of Europe is trading lower.
 
Possible challenges to traders today is the following
1.  Crude Oil Inventories are out at 10:30 AM EST.  This will move the oil markets.
2.  FOMC Member Rosengren speaks at 12 noon EST.  This is not major.       
3.  Beige Book is out at 2 PM EST.  This is major 


Yesterday we said our bias was to the upside as we felt that after the sell off on Monday, the markets were due for a rebound.  The net result?  The Dow gained 158 points.  Today the markets are correlated but are correlated to the downside.  Hence our bias is to the downside.  Could this change? Of Course.  Remember anything can happen in a volatile market.
 
Is it me or has anyone else noticed that since the sequester came into play, the economic reports we've been getting have been less than stellar?  On Monday the Empire State Manufacturing index was down, NAHB housing numbers down and yesterday Building Permits were down.  I noticed this on Friday and wrote an article about it.  That article can be viewed at http://www.forexcrunch.com/effects-of-sequestrationthus-far/
 it makes for interesting reading as we are now seeing the effects of sequestration.
 
 As readers are probably aware I don't trade equities.   While we're on this discussion, let's define what is meant by a good earnings report.  A company must exceed their prior quarter's earnings per share and must provide excellent forward guidance.  Any falloff between earning per share or forward guidance will not bode well for the company's shares.  This is one of the reasons I don't trade equities but prefer futures.  There is no earnings reports with futures and we don't have to be concerned about lawsuits, scandals, malfeasance, etc.
 
Anytime the market isn't correlated it's giving you a clue that something isn't right and you should proceed with caution. Today our bias is to the downside.  Could this change?  Of course.  In a volatile market anything can happen.  We'll have to monitor and see.  
 
On Friday, April 5th I had the opportunity to interview Carl Weiss from Algo Futures.  We talked at length about his thoughts on the future of the markets and new and upcoming endeavors.  Ultimately this is the story of an American entrepreneur and what he had to go thru to create a solution that can be used by any trader.  If any reader wants to know and is curious about what it takes to be self-made in America, then you need to listen to this.  Additionally our friends at TradersLog.com have graciously published my article on this subject.  It can be viewed at:
 http://www.traderslog.com/interview-with-carl-weiss/  
My interview with Carl can be viewed at:

 
 
 

Please note the video is about a half hour in length and we plan on producing more in the near future.  Also note that in the near future we will have other videos where we will interview various trading leaders.

As I write this the crude markets are trading lower and the US Dollar is advancing.  This is normal.  Think of it this way.  If the stock market is trading lower, it's safe to assume that the crude market will follow suit and vice versa.  Crude trades with the expectation that business activity is expanding.  The barometer of which is the equities or stock market.  If you view both the crude and index futures side by side you will notice this. Yesterday June crude dropped to a low of 88.46 a barrel in the overnight session and as of this writing is starting to rebound.  We'll have to monitor and see if crude either goes lower or holds at the present level.   We'll have to see where crude falls to before we can establish a support and resistance level.  At this time crude can fall further.  This could change.  All we need do is look at what happened last fall when crude was trading over $100.00 a barrel. We'll have to monitor and see.  Remember that crude is the only commodity that is reflected immediately at the gas pump. 



Future Challenges:
- Budget Battle - ongoing.
- Debt Ceiling in the August time frame.      
- European Contraction - happening now 


Crude oil is trading lower and the US Dollar is advancing.  This is normal.  Crude typically makes 3 major moves (long or short) during the course of any trading day: around 7 AM EST, 9 AM EST and 2 PM EST when the crude market closes.  If crude makes major moves around those time frames, then this would suggest normal trending, if not it would suggest that something is not quite right.  If you feel compelled to trade consider doing so after 10:30 AM when the inventory 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.forexcrunch.com/battle-of-the-budgets-dead-ahead/

http://www.barchart.com/headlines/story/9204041/the-debt-ceiling-and-its-impact-on-the-global-economy    
http://www.forexcrunch.com/effects-of-sequestrationthus-far/


Remember that without knowledge of order flow we as traders are risking our hard earned capital and the Smart Money will have no issue taking it from us.  Regardless of whatever platform you use for trading purposes you need to make sure it's monitoring order flow.  Sceeto does an excellent job at this.  To fully capitalize on this newsletter it is important that the reader understand how the various market correlate.  More on this in subsequent blogs.



To view previous issues of Market Tea Leaves visit our archive.

Pre-Market Global Review - 4/16/13 - China Catches Cold - World takes aspirin

Good Morning Traders,
 
As of this writing 5:30 AM EST, here’s what we see:
 
US Dollar –Up at 82.525 the US Dollar is up 18 ticks and is trading at 82.525.       
Energies – May Oil is down at 87.95.
Financials – The June 30 year bond is down 3 ticks and is trading at 147.27. 
Indices – The June S&P 500 emini ES contract is up at 1550.00 and is up 26 ticks.
Gold – The June gold contract is trading up at 1376.30 and is up 152 ticks from its close.

Quick Note: Unless otherwise shown the above contract months are now June.   

Initial Conclusion: This is not a correlated market.  The dollar is up+ and oil is down- which is normal but the 30 year bond is trading lower.  The Financials should always correlate with the US dollar such that if the dollar is lower then bonds should follow and vice versa.  The indices are up and the US dollar is trading higher which is not correlated.  Gold is trading higher which is not correlated with the US dollar trading up.   I tend to believe that Gold has an inverse relationship with the US Dollar as when the US Dollar is down, Gold tends to rise in value and vice-versa. Think of it as a seesaw, when one is up the other should be down.   I point this out to you to make you aware that when we don't have a correlated market, it means something is wrong.  As traders you need to be aware of this and proceed with your eyes wide open. 

Asia closed mixed with the Shanghai, Sensex and Singapore higher and the rest of Asia closed lower.  As of this writing all of Europe is trading lower.
 
Possible challenges to traders today is the following
1.  FOMC Member Dudley speaks at 8 AM EST.  This is not 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.  Building Permits are out at 8:30 AM EST.  This is major.
5.  Housing Starts are out at 8:30 AM EST.  This is major.
6.  ECB President Mario Draghi speaks at 9 AM EST.
7.  Capacity Utilization Rate is out at 9:15 AM EST.  This is not major.
8.  Industrial Production is out at 9:15 AM EST.  This is not major.
9.  Treasury Secretary Lew speaks at 10 AM EST.
10.  FOMC Member Duke speak st 12 Noon.
11.  FOMC Member Yellen speaks at 3 PM EST.
12.  Treasury Secretary Lew speaks at 3 PM EST...again         
 
 Yesterday we said our bias was neutral because the markets weren't correlated and we felt the markets could go in any direction.  We also advised readers to avoid trading if you didn't have an open position.  The net result?  The Dow dropped 266 points and logged the worse performance in 5 months.  Today the markets aren't correlated but our bias is to the upside.  Why?  We feel that after yesterday's sell off, the markets are due for a rebound.  Could this change? Of Course.  Remember anything can happen in a volatile market.
 
It is amazing to me that China, who little more than a decade ago was not considered a world economic power could post a GDP number within 3 tenths of a point off could such a calamity worldwide.  It could only mean that the rest of the world must owe China money.  In the United States this kind of news wouldn't be considered welcome news either but I don't think it would set off a worldwide event which is exactly what happened yesterday.  Gold fell, oil fell and the markets weren't correlated.  Oil fell with the expectation that if things weren't great in China then there wouldn't be as much demand worldwide.  This is to be expected.  What I think really shocked everyone was gold.   We haven't seen gold drop this much in one day since the 1980's.  Gold is starting to rebound now but only time will tell if it can recapture its luster.  Along with Gold the futures are starting to rebound as well but as in all things we'll have to monitor and see.
 
 As readers are probably aware I don't trade equities.   While we're on this discussion, let's define what is meant by a good earnings report.  A company must exceed their prior quarter's earnings per share and must provide excellent forward guidance.  Any falloff between earning per share or forward guidance will not bode well for the company's shares.  This is one of the reasons I don't trade equities but prefer futures.  There is no earnings reports with futures and we don't have to be concerned about lawsuits, scandals, malfeasance, etc.
 
Anytime the market isn't correlated it's giving you a clue that something isn't right and you should proceed with caution. Today our bias is to the upside.  Could this change?  Of course.  In a volatile market anything can happen.  We'll have to monitor and see.  
On Friday, April 5th I had the opportunity to interview Carl Weiss from Algo Futures.  We talked at length about his thoughts on the future of the markets and new and upcoming endeavors.  Ultimately this is the story of an American entrepreneur and what he had to go thru to create a solution that can be used by any trader.  If any reader wants to know and is curious about what it takes to be self-made in America, then you need to listen to this.  Additionally our friends at TradersLog.com have graciously published my article on this subject.  It can be viewed at:
 http://www.traderslog.com/interview-with-carl-weiss/ My interview with Carl can be viewed at:

 
 
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 crude dropped to a low of 86.06 a barrel in the overnight session and as of this writing is starting to rebound.  We'll have to monitor and see if crude either goes lower or holds at the present level.   We'll have to see where crude falls to before we can establish a support and resistance level.  At this time crude can fall further.  This could change.  All we need do is look at what happened last fall when crude was trading over $100.00 a barrel. We'll have to monitor and see.  Remember that crude is the only commodity that is reflected immediately at the gas pump. 



Future Challenges:
- Budget Battle - ongoing.
- Debt Ceiling in the August time frame.      
- European Contraction - happening now 


Crude oil is trading lower and the US Dollar is advancing.  This is normal.  Crude typically makes 3 major moves (long or short) during the course of any trading day: around 7 AM EST, 9 AM EST and 2 PM EST when the crude market closes.  If crude makes major moves around those time frames, then this would suggest normal trending, if not it would suggest that something is not quite right.  If you feel compelled to trade consider doing so after 10 AM when the markets give us better direction.  As always watch and monitor your order flow as anything can happen in this market.  This is why monitoring order flow in today's market is crucial.  We as traders are faced with numerous challenges that we didn't have a few short years ago.  High Frequency Trading is one of them.   I'm not an advocate of scalping however in a market as volatile as this scalping is an alternative to trend trading.

Recently Published Articles:      

http://www.forexcrunch.com/battle-of-the-budgets-dead-ahead/

http://www.barchart.com/headlines/story/9204041/the-debt-ceiling-and-its-impact-on-the-global-economy    
http://www.forexcrunch.com/effects-of-sequestrationthus-far/


Remember that without knowledge of order flow we as traders are risking our hard earned capital and the Smart Money will have no issue taking it from us.  Regardless of whatever platform you use for trading purposes you need to make sure it's monitoring order flow.  Sceeto does an excellent job at this.  To fully capitalize on this newsletter it is important that the reader understand how the various market correlate.  More on this in subsequent blogs.



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