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.
Good Morning Traders,
As
of this writing 5:00 AM EST, here’s what we see:
US Dollar –Down at 80.950, the Sept US Dollar is down 217 ticks and is trading at 80.950.
Energies – July Oil is down at 95.30.
Financials – The September 30 year bond is up 29 ticks and is trading at 139.21.
Indices – The June S&P
500 emini ES contract is down at 1602.25 and is down 30 ticks.
Gold – The August
gold contract is trading down at 1386.90 and is down 56 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 higher. The Financials should always correlate
with
the US dollar such that if the dollar is lower then bonds should follow
and vice versa. The indices are down and the US dollar
is trading lower which is not correlated. Gold is trading lower which is not correlated with the
US
dollar trading down. I tend to believe
that Gold has an inverse
relationship with the US Dollar as when the US Dollar is down, Gold
tends to rise in value and vice-versa. Think of it as a seesaw, when one
is up the other should be down. I point this out to you to make you
aware that when we don't have a correlated market, it means something is
wrong. As traders you need to be aware of this and proceed with your
eyes wide open.
All of Asia closed lower. As of
this writing all of Europe is trading lower. Asia has been selling off dramatically this entire week and has wrecked havoc in both Europe and the US. The Japanese are adamant about keeping the Yen low so as to make their products and services lower price wise. Ironically this is not working out well for them because over the past week, the Yen has risen. When a country's currency goes up, what does that mean? It means their equity markets are going down. What happened to the Nikkei recently? It's gone down. The West is apparently asleep at the wheel with Europe dealing with recession and high unemployment and the US not knowing where it even stands. Seemingly we are in the midst of an economic downturn. When you see the Bonds trading higher than anything else, it only means one thing: traders are fleeing to the "safety" of bonds.
Possible challenges to
traders today is the following
1. Core Retail Sales are out at 8:30 AM EST. This is major.
2. Retail Sales are out at 8:30 AM EST. This is major.
3. Unemployment Claims are out at 8:30 AM EST. This is major.
4. Import Prices are out at 8:30 AM EST. This is not major.
5. Business Inventories are out at 10 AM EST. This is not major.
6. Natural Gas Supply is out at 10:30 AM EST. This will move the Nat Gas market.
7. 30 Year Bond Auction starts at 1 PM EST. This could affect afternoon trading.
Yesterday we said our bias was to
the upside as all of the futures were pointing up. Although the futures weren't correlated, I truly believed that after 2 down days the Smart Money would be putting capital back on the table. The net result? The Dow dropped
127 points and the other indices dropped 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 it appeared as though the markets wanted to go higher. Europe was starting to trade to the upside, the Indices were higher as well as Gold. When the opening bell rang, the markets went up initially and then mid-morning slide back into negative territory and remained there the rest of the day. The only bright spot was crude, that did well. All of this with no major economic news to report. Today is critical as an adage on the street is 3 days make a trend. If today isn't positive, it will mark a trend to downside. Could it be that the June Swoon is becoming a reality? As always we'll have to monitor and see...
As
readers are probably aware I don't trade equities. While we're on
this discussion, let's define what is meant by a good earnings report. A
company must exceed their prior quarter's earnings per share and must
provide excellent forward guidance. Any falloff between earning per
share or forward guidance will not bode well for the company's shares. This is one of the
reasons I don't
trade equities but prefer futures. There is no earnings reports with
futures and we don't have to be concerned about lawsuits, scandals,
malfeasance, etc.
Anytime
the market isn't correlated it's giving you a clue that something isn't
right and you should proceed with caution. Today our bias is neutral.
Could this change? Of course. In a
volatile market anything can happen. We'll have to monitor and see.
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
94.46 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 91.00 a barrel and resistance
at 96. 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/personal-spending-deep-sixs-rally/
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
blogs.
Good Morning Traders,
As
of this writing 5:15 AM EST, here’s what we see:
US Dollar –Up at 81.395, the US Dollar is up 85 ticks and is trading at 81.395.
Energies – July Oil is up at 95.49.
Financials – The September 30 year bond is up 2 ticks and is trading at 139.12.
Indices – The June S&P
500 emini ES contract is up at 1634.00 and is up 28 ticks.
Gold – The August
gold contract is trading up at 1378.10 and is up 11 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 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.
With the exception of the Aussie exchange all of Asia closed lower. As of
this writing all of Europe is trading higher.
Possible challenges to
traders today is the following
1. No Major Economic news to speak of.
2. Crude Oil Inventories are out at 10:30 AM EST. This will move the oil markets.
3. 10 Year Bond Auction starts at 1 PM EST. This could affect afternoon trading.
4. Federal Budget Balance is out at 2 PM EST. This could affect afternoon trading.
Yesterday we said our bias was to
the downside as none of the futures were correlated at all. As you're no doubt aware even if there was the slight chance of correlation I would mention it and determine a bias. The net result? The Dow dropped 117 points and the other indices dropped as well. Today we are dealing with a completely uncorrelated market. Unlike yesterday whereby all futures were pointed down, today everything is pointed up! This tells you that traders can't make up their minds and as such the markets could be driven in any direction today. Our bias is to the upside only because after two losing sessions, we think the Smart Money wants to drive the markets higher. Could
this change? Of Course. Remember anything can happen in a volatile market.
Yesterday it appeared as though the proverbial "June Swoon" had finally arrived as the markets were set up for a global sell off and that's pretty much what we got. So now instead of "sell in May and go away" it's now the "June Swoon". The idea being that if the markets don't sell off in May, they'll do so in June. The only problem is that they don't tell you when to get back in the markets. Some pundits say October, others November and some say the 1st full week after Labor Day. In my mind the markets will always have dips and upswings. It happens every trading day so to think that there is seasonality for trading defeats the purpose. The last two years have proven that we don't have to have the summer doldrums whereby volumes fall off and trading action is minimal. The reason I'm stating that this year is because we have major events that will occur during the summer. Namely the upcoming budget battle. The Federal Budget needs to be in place by September 30th as October 1 starts a new fiscal year for the US government. At some point during the summer (I'm guessing August) the battle will commence. The Democrats will have their agenda and the GOP will have their own, so time will tell how it all plays out. Thus far, the folks in DC are burying their heads in the sand, pretending it doesn't exist and that are no problems. My take is they won't do anything until the very last minute when they have to. Think about what happened at the beginning of this year with the Fiscal Cliff...
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. Yesterday July crude dropped to a low of
94.04 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 91.00 a barrel and resistance
at 96. 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 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 10:30 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/personal-spending-deep-sixs-rally/
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
blogs.
Good Morning Traders,
As
of this writing 5:35 AM EST, here’s what we see:
US Dollar –Down at 81.655, the US Dollar is down 248 ticks and is trading at 81.655.
Energies – July Oil is down at 95.50.
Financials – The September 30 year bond is down 13 ticks and is trading at 138.13.
Indices – The June S&P
500 emini ES contract is down at 1633.50 and is down 34 ticks.
Gold – The August
gold contract is trading down at 1369.80 and is down 167 ticks from its close.
Initial Conclusion: This is not a correlated market. The dollar is down- and
oil is down- which is not normal and the 30 year bond is trading lower. The Financials should always correlate
with
the US dollar such that if the dollar is lower then bonds should follow
and vice versa. The indices are down and the US dollar
is trading lower which is not correlated. Gold is trading lower which is not correlated with the
US
dollar trading down. I tend to believe
that Gold has an inverse
relationship with the US Dollar as when the US Dollar is down, Gold
tends to rise in value and vice-versa. Think of it as a seesaw, when one
is up the other should be down. I point this out to you to make you
aware that when we don't have a correlated market, it means something is
wrong. As traders you need to be aware of this and proceed with your
eyes wide open.
All of Asia closed lower. As of
this writing all of Europe is trading lower.
Possible challenges to
traders today is the following
1. No Major Economic news to speak of.
2. NFIB Small Business Index is out at 7:30 AM EST. This is not major.
3. Wholesale Inventories are out at 10 AM EST. This is not major.
Yesterday we said our bias was to the upside as the Bonds were trading higher, Europe was trading to the upside and the Nikkei in Japan shot up by over 600 points. The US markets after an initial spike up went into negative territory and moved between positive and negative territory the rest of the session to close down 9 points, the Nasdaq closed up by 5 and the S&P flat lined. Today we are not dealing with a correlated market, in fact we are dealing with a completely uncorrelated market, as such our bias is to the downside. Could
this change? Of Course. Remember anything can happen in a volatile market.
Yesterday with no major economic news to report, the markets initially went higher as the good news released before the opening bell was that Standard & Poors raised US creditworthiness to stable. This was the same Standard & Poors that downgraded US debt in August of 2011. I guess they don't want the US Government to scrutinize their books as they did after the lower rating of government bonds from AAA to AA in 2011. This plus the lack of economic news and the NSA controversy led to a muddle thru day whereby the markets didn't really have a sense of direction. Economic news can be either good or bad for the markets. On the plus side they do give a sense of direction, on the downside the news given made not be perceived as positive and the markets may react negatively to it.
As
readers are probably aware I don't trade equities. While we're on
this discussion, let's define what is meant by a good earnings report. A
company must exceed their prior quarter's earnings per share and must
provide excellent forward guidance. Any falloff between earning per
share or forward guidance will not bode well for the company's shares. This is one of the
reasons I don't
trade equities but prefer futures. There is no earnings reports with
futures and we don't have to be concerned about lawsuits, scandals,
malfeasance, etc.
Anytime
the market isn't correlated it's giving you a clue that something isn't
right and you should proceed with caution. Today our bias is to the downside.
Could this change? Of course. In a
volatile market anything can happen. We'll have to monitor and see.
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 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 July crude dropped to a low of
95.19 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 91.00 a barrel and resistance
at 96. This could change. All we
need do is look at what happened last fall when crude was trading over
$100.00 a barrel. We'll have to monitor and see. Remember that crude is
the only commodity that is reflected immediately at the gas pump.
Future Challenges:
- Budget Battle - ongoing.
- Debt Ceiling in the August time frame.
- European Contraction - happening now
Crude
oil is trading lower and the US Dollar is declining. This is not normal.
Crude typically makes 3 major moves (long or short) during the
course of any trading day: around 7 AM EST, 9 AM EST and 2 PM EST when
the crude market closes. If crude makes major moves around those time
frames, then this would suggest normal trending, if not it would suggest
that something is not quite right. If you feel compelled to trade
consider doing so after 10 AM when the markets give us better
direction. As
always watch and monitor your
order flow as anything can happen in this market. This is why
monitoring order flow in today's market is crucial. We as traders are
faced with numerous challenges that we didn't have a few short years
ago. High Frequency Trading is one of them. I'm not an advocate of
scalping however in a market as volatile as this
scalping is an alternative to trend trading.
Recently Published Articles:
http://www.barchart.com/headlines/story/10110400/leadership-or-lack-thereof
http://www.forexcrunch.com/personal-spending-deep-sixs-rally/
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
blogs.
Good Morning Traders,
As
of this writing 5:00 AM EST, here’s what we see:
US Dollar –Up at 81.155, the US Dollar is up 225 ticks and is trading at 81.155.
Energies – July Oil is down at 95.76.
Financials – The September 30 year bond is down 3 ticks and is trading at 139.22.
Indices – The June S&P
500 emini ES contract is up at 1645.00 and is up 26 ticks.
Gold – The August
gold contract is trading down at 1378.10 and is down 49 ticks from its close.
Initial Conclusion: This is not a correlated market. The dollar is up+ and
oil is down- which is normal but the 30 year bond is trading lower. The Financials should always correlate
with
the US dollar such that if the dollar is lower then bonds should follow
and vice versa. The indices are up and the US dollar
is trading higher which is not correlated. Gold is trading lower which is correlated with the
US
dollar trading up. I tend to believe
that Gold has an inverse
relationship with the US Dollar as when the US Dollar is down, Gold
tends to rise in value and vice-versa. Think of it as a seesaw, when one
is up the other should be down. I point this out to you to make you
aware that when we don't have a correlated market, it means something is
wrong. As traders you need to be aware of this and proceed with your
eyes wide open.
With the exception of Shanghai which closed lower, all of Asia closed higher. As of
this writing all of Europe is trading mixed with the German DAX trading higher and the rest of Europe trading lower.
Possible challenges to
traders today is the following
1. No Major Economic news to speak of.
2. Lack of economic news.
3. FOMC Member Bullard speaks at 9:50 AM EST. This is not major.
On Friday we said our bias was
neutral because the markets weren't correlated and given that it was Jobs Friday, I'm loath to make a call on that day as the markets can be driven in any direction. The Dow gained 207 points and the other indices gained as well. Today the markets aren't correlated but our bias is to the upside as the Bonds are trading lower. Overnight is Asia the Nikkei gained over 600 points and Gold is trading lower which means the fear factor is declining. Could
this change? Of Course. Remember anything can happen in a volatile market.
Well Jobs Friday came and went and apparently the US economy created 175,000 new jobs versus 167,000 expected. This is good news but the unemployment rate went to 7.6% versus 7.5% previously. We are told that the reason for this is because the participation rate has increased. In other words and according to the Dept. of Labor more people are participating and looking for work. This is the most ridiculous thing I ever heard of but it wouldn't be the first time for the DOL. Do they really think that at one point in May millions of people decided to look for work? The truth is more people are now eligible to look for work. Who are they? Did anyone consider college graduates who are now entering the workforce? Wouldn't that be a surprise this time of year? I wonder...
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 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 July crude dropped to a low of
93.72 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 91.00 a barrel and resistance
at 96. 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.barchart.com/headlines/story/10110400/leadership-or-lack-thereof
http://www.forexcrunch.com/personal-spending-deep-sixs-rally/
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
blogs.
Good Morning Traders,
As
of this writing 5:30 AM EST, here’s what we see:
US Dollar –Up at 81.825, the US Dollar is up 23 ticks and is trading at 81.825.
Energies – July Oil is up at 95.11.
Financials – The September 30 year bond is up 8 ticks and is trading at 141.13.
Indices – The June S&P
500 emini ES contract is down at 1621.50 and is down 5 ticks.
Gold – The August
gold contract is trading down at 1410.10 and is down 57 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 lower which is correlated with the
US
dollar trading up. I tend to believe
that Gold has an inverse
relationship with the US Dollar as when the US Dollar is down, Gold
tends to rise in value and vice-versa. Think of it as a seesaw, when one
is up the other should be down. I point this out to you to make you
aware that when we don't have a correlated market, it means something is
wrong. As traders you need to be aware of this and proceed with your
eyes wide open.
Asia closed lower with the exception of the Indian Sensex exchange which closed higher. As of
this writing all of Europe is trading mixed.
Possible challenges to
traders today is the following
1. Non-Farm Employment Change is out at 8:30 AM EST. This is major.
2. Unemployment Rate is out at 8:30 AM EST. This is major.
3. Average Hourly Earnings are out at 8:30 AM EST. This is major.
4. Consumer Credit is out at 3:30 PM EST. This is could affect afternoon trading.
Yesterday we said our bias was neutral because the markets weren't correlated and didn't appear to have any sense of direction. The Dow dropped over 100 points intraday but came back to close 80 points higher. The other major indices closed higher as well. Today is Jobs Friday and as such I do not trade on this day as the markets historically have never shown me that it has any sense of normalcy on this day. As such our bias is neutral. Could
this change? Of Course. Remember anything can happen in a volatile market.
Wow, talk about volatility. The markets dropped initially with the Dow dropping more than 100 points and then decided to go higher closing 80 points higher from Wednesday's close. The ECB had their meeting and press conference and apparently the Europeans didn't like what he said as they all closed to the downside. Today we have the monthly Jobs Report and as many of my followers know, I don't trade Jobs Friday or FOMC Day as the markets have never shown me any sense of normalcy on those days. Therefore my bias is neutral. 167,000 net new jobs are expected, we'll see what the results are...
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 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 July crude dropped to a low of
93.80 a
barrel and held. We'll have to monitor and see
if
crude
either goes lower or holds at the present level. It would appear at
the present time that crude has support at 91.00 a barrel and resistance
at 96. 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 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.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
blogs.
