Good Morning Traders,
As
of this writing 4:45 AM EST, here’s what we see:
US Dollar –Up at 83.340, the Sept US Dollar is up 83 ticks and is trading at 83.340.
Energies – August Oil is up at 98.15.
Financials – The September 30 year bond is up 15 ticks and is trading at 136.07.
Indices – The September S&P
500 emini ES contract is up at 1610.50 and is up 15 ticks.
Gold – The August
gold contract is trading up at 1263.50 and is up 78 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.
Asia closed mainly higher with the exception being the Hang Seng and Sensex exchanges. As
of this
writing all of Europe is trading lower.
Possible challenges to
traders today is the following
1. Factory Orders are out at 10 AM EST. This is major.
2. IBD Economic Optimism is out at 10 AM EST. This is major.
3. Total Vehicle Sales - all day.
4. FOMC Member Dudley speaks at 12:30 PM EST. This is major.
Yesterday we said our bias was to the upside as the markets were correlated. The Net Result? The Dow gained 65 points and the other indices gained as well. Today we are not dealing with a correlated market and currently this reminds me of Friday's situation where all instruments are moving higher. As such our bias is neutral as the markets can go in any direction today. Could
this change? Of Course. Remember anything can happen in a volatile market.
Yesterday we said our bias was to upside as yesterday morning the markets were correlated as such. That's the thing about Market Correlation, it will give you a good sense of direction going forward for that day. Of course having good economic news didn't hurt either. ISM Manufacturing, Construction Spending all came in with good results and clearly that can't hurt. My concern yesterday was a report that came out from the German publication: Der Speigel that claimed the NSA had bugged EU Headquarters in both Washington and Brussels; in fact I mentioned this in our Market Bias video because yesterday morning the DAX was dropping like a rock and looked like the Paris exchange would follow suit. The situation stabilized however and Europe did close higher. It makes you wonder, if this is true what are the folks in DC thinking? The Europeans are not our enemies, if anything they are our allies. I don't understand an administration allowing this, if true. But then again, I'm not too crazy about having my phone tapped either....
On Friday, June 7th I had the
opportunity to interview Mr. Sal Spedele regarding ObamaCare. Sal is a
20 year veteran of the Insurance Industry and we spoke at length
regarding the ramifications of the Patient Protection and Affordable
Care Act aka ObamaCare. If you are at all concerned about the future of
Health Insurance in the United States, then you need to listen to this
interview and act on it. Sal and his team is offering complimentary
advisory services to inform you of your rights and ramifications of this
Act. To download the article on ObamaCare, go to:
https://markettealeaves.sharefile.com/d/s978a806ae2e41569
To view my discussion with Sal:
http://youtu.be/sR_ine0b5Ro
As
readers are probably aware I don't trade equities. While we're on
this discussion, let's define what is meant by a good earnings report. A
company must exceed their prior quarter's earnings per share and must
provide excellent forward guidance. Any falloff between earning per
share or forward guidance will not bode well for the company's shares. This is one of the
reasons I don't
trade equities but prefer futures. There is no earnings reports with
futures and we don't have to be concerned about lawsuits, scandals,
malfeasance, etc.
Anytime
the market isn't correlated it's giving you a clue that something isn't
right and you should proceed with caution. Today our bias is neutral.
Could this change? Of course. In a
volatile market anything can happen. We'll have to monitor and see.
In
May, I spoke with John Karnas, CEO of Trend Following Trades. John has
an interesting background as he was a trader for a number of years
prior to buying Trend Following Trades. John is a believer in Trading
Plans and has a very precise method of developing aspiring traders. To
download the article I've written, go to:
https://markettealeaves.sharefile.com/d/sdf8f77f6e2c4347a
My discussion with John can be viewed at:
http://youtu.be/uVwHpMq1604
Please
note the video is about a half hour in length and we plan on producing
more in the near future. Also note that in the near future we will have
other videos where we will interview various trading leaders.
As
I write this the crude markets are trading higher and the US
Dollar is 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 August crude dropped to a low of
96.29 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 95 a barrel and resistance
at 99. This could change. All we
need do is look at what happened last fall when crude was trading over
$100.00 a barrel. We'll have to monitor and see. Remember that crude is
the only commodity that is reflected immediately at the gas pump.
Future Challenges:
- Budget Battle - ongoing.
- Debt Ceiling in the August time frame.
- Asian Contagion - happening now
Crude
oil is trading 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 reports are released and the markets give us better
direction. As
always watch and monitor your
order flow as anything can happen in this market. This is why
monitoring order flow in today's market is crucial. We as traders are
faced with numerous challenges that we didn't have a few short years
ago. High Frequency Trading is one of them. I'm not an advocate of
scalping however in a market as volatile as this
scalping is an alternative to trend trading.
Recently Published Articles:
http://www.barchart.com/headlines/story/10110400/leadership-or-lack-thereof
http://www.forexcrunch.com/asian-contagion/
http://www.traderslog.com/john-karnas/
Remember
that without knowledge of order flow
we as traders are risking our hard earned capital and the Smart Money
will have
no issue taking it from us. Regardless of whatever platform you use for
trading purposes you need to make sure it's monitoring order flow.
Sceeto does an excellent job at this. To fully capitalize on
this newsletter it is important that the reader understand how the
various market
correlate. More on this in subsequent editions.
Good Morning Traders,
As
of this writing 4:40 AM EST, here’s what we see:
US Dollar –Down at 83.345, the Sept US Dollar is down 41 ticks and is trading at 83.345.
Energies – August Oil is up at 96.57.
Financials – The September 30 year bond is down 19 ticks and is trading at 135.08.
Indices – The September S&P
500 emini ES contract is up at 1602.75 and is up 14 ticks.
Gold – The August
gold contract is trading up at 1241.70 and is up 180 ticks from its close.
Initial Conclusion: This is a correlated market and thus far it is correlated 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.
All of Asia closed higher with the exception of Singapore which closed fractionally lower. As
of this
writing all of Europe is trading lower with the except of London which is trading fractionally higher. A report came out from Der Speigel that stated that the NSA was spying on the EU headquarters in both Washington, DC and Brussels and at this hour it is driving some of the exchanges in Europe lower.
Possible challenges to
traders today is the following
1. Final Manufacturing PMI is out at 9 AM EST. This is major.
2. ISM Manufacturing PMI is out at 10 AM EST. This is major.
3. Construction Spending is out at 10 AM EST. This is major.
4. ISM Manufacturing Prices are out at 10 AM EST. This is not major.
On Friday we said our bias is neutral as it seems that every instrument was trading higher except Gold. A neutral bias means the market could go in either direction. Having the Chicago PMI coming in far less than expected didn't help matters as the Dow dropped 114 points and the other indices didn't fare too well either. Today we are dealing with a correlated market and as such our bias is to the upside. Could
this change? Of Course. Remember anything can happen in a volatile market.
On Friday we said the market bias was neutral which generally means "hang on to your money". As it was the last day of the quarter I would have advised caution anyway as in prior years we used to have a phenomena called "window dressing" which is a polite way of artifically propping up share prices to make them look more attractive. Not so much in recent times. We do however have the issue of mixed signals from the Fed as on Friday prior to market open FOMC Member Stern suggested that the Fed may taper off the 85 billion dollar buyback program as early as September. That's all it took to send the markets reeling. Now I said this talk wouldn't amount to much as Stern is not an "A" player in the Fed world, yet this comment was enough. What makes this tough is we keep getting mixed signals from the Fed on this matter. Some say don't worry about it and others (liken to Stern) make these ridiculous comments that have a negative effect on markets. In the business world we used to have an unwritten rule that basically said if you represent an entity (whatever that may be) you sing from the same hymn book. In other words whomever someone speaks to in that company, the message needs to be the same regardless of who they talk to. I saw this firsthand in the technology world years ago when SAP was making inroads in the United States. Whomever someone spoke to at SAP, the message was the same: "we don't negotiate price and we will cost justify why you should spend what we suggest." To my knowledge no one ever broke that rule. It's a shame that the Fed doesn't practice the same as what they say has an impact on global markets....
On Friday, June 7th I had the
opportunity to interview Mr. Sal Spedele regarding ObamaCare. Sal is a
20 year veteran of the Insurance Industry and we spoke at length
regarding the ramifications of the Patient Protection and Affordable
Care Act aka ObamaCare. If you are at all concerned about the future of
Health Insurance in the United States, then you need to listen to this
interview and act on it. Sal and his team is offering complimentary
advisory services to inform you of your rights and ramifications of this
Act. To download the article on ObamaCare, go to:
https://markettealeaves.sharefile.com/d/s978a806ae2e41569
To view my discussion with Sal:
http://youtu.be/sR_ine0b5Ro
As
readers are probably aware I don't trade equities. While we're on
this discussion, let's define what is meant by a good earnings report. A
company must exceed their prior quarter's earnings per share and must
provide excellent forward guidance. Any falloff between earning per
share or forward guidance will not bode well for the company's shares. This is one of the
reasons I don't
trade equities but prefer futures. There is no earnings reports with
futures and we don't have to be concerned about lawsuits, scandals,
malfeasance, etc.
Anytime
the market isn't correlated it's giving you a clue that something isn't
right and you should proceed with caution. Today our bias is to the upside.
Could this change? Of course. In a
volatile market anything can happen. We'll have to monitor and see.
In
May, I spoke with John Karnas, CEO of Trend Following Trades. John has
an interesting background as he was a trader for a number of years
prior to buying Trend Following Trades. John is a believer in Trading
Plans and has a very precise method of developing aspiring traders. To
download the article I've written, go to:
https://markettealeaves.sharefile.com/d/sdf8f77f6e2c4347a
My discussion with John can be viewed at:
http://youtu.be/uVwHpMq1604
Please
note the video is about a half hour in length and we plan on producing
more in the near future. Also note that in the near future we will have
other videos where we will interview various trading leaders.
As
I write this the crude markets are trading higher and the US
Dollar is declining. This is normal. Think of it this way. If the
stock
market is trading lower, it's safe to assume that the crude market will
follow suit and vice versa. Crude trades with the expectation that
business activity is expanding. The barometer of which is the equities
or stock market. If you view both the crude and index futures side by
side you will notice this. On Friday August crude dropped to a low of
96.33 a
barrel and held. We'll have to monitor and see
if
crude
either goes lower or holds at the present level. It would appear at
the present time that crude has support at 95 a barrel and resistance
at 98. This could change. All we
need do is look at what happened last fall when crude was trading over
$100.00 a barrel. We'll have to monitor and see. Remember that crude is
the only commodity that is reflected immediately at the gas pump.
Future Challenges:
- Budget Battle - ongoing.
- Debt Ceiling in the August time frame.
- Asian Contagion - happening now
Crude
oil is trading higher and the US Dollar is declining. This is normal.
Crude typically makes 3 major moves (long or short) during the
course of any trading day: around 7 AM EST, 9 AM EST and 2 PM EST when
the crude market closes. If crude makes major moves around those time
frames, then this would suggest normal trending, if not it would suggest
that something is not quite right. If you feel compelled to trade
consider doing so after 10 AM when the economic reports are released and the markets give us better
direction. As
always watch and monitor your
order flow as anything can happen in this market. This is why
monitoring order flow in today's market is crucial. We as traders are
faced with numerous challenges that we didn't have a few short years
ago. High Frequency Trading is one of them. I'm not an advocate of
scalping however in a market as volatile as this
scalping is an alternative to trend trading.
Recently Published Articles:
http://www.barchart.com/headlines/story/10110400/leadership-or-lack-thereof
http://www.forexcrunch.com/asian-contagion/
http://www.traderslog.com/john-karnas/
Remember
that without knowledge of order flow
we as traders are risking our hard earned capital and the Smart Money
will have
no issue taking it from us. Regardless of whatever platform you use for
trading purposes you need to make sure it's monitoring order flow.
Sceeto does an excellent job at this. To fully capitalize on
this newsletter it is important that the reader understand how the
various market
correlate. More on this in subsequent editions.
Good Morning Traders,
As
of this writing 5:35 AM EST, here’s what we see:
US Dollar –Up at 83.220, the Sept US Dollar is up 68 ticks and is trading at 83.220.
Energies – August Oil is up at 97.65.
Financials – The September 30 year bond is up 8 ticks and is trading at 135.27.
Indices – The September S&P
500 emini ES contract is up at 1612.75 and is up 25 ticks.
Gold – The August
gold contract is trading down at 1202.00 and is down 98 ticks from its close.
Initial Conclusion: This is not a correlated market. The dollar is up+ and
oil is up+ which is not normal but the 30 year bond is trading 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 lower which is correlated with the
US
dollar trading up. I tend to believe
that Gold has an inverse
relationship with the US Dollar as when the US Dollar is down, Gold
tends to rise in value and vice-versa. Think of it as a seesaw, when one
is up the other should be down. I point this out to you to make you
aware that when we don't have a correlated market, it means something is
wrong. As traders you need to be aware of this and proceed with your
eyes wide open.
All of Asia closed higher, mostly to the tune of triple digits. As of this
writing all of Europe is trading mixed with the London and Frankfurt exchange trading fractionally higher, the rest of Europe is trading lower.
Possible challenges to
traders today is the following
1. FOMC Member Stein speaks at 8 AM EST. This is not major.
2. Chicago PMI is out at 9:45 AM EST. This is major.
3. Revised UOM Consumer Sentiment is out at 9:55 AM EST. This is major.
4. Revised UOM Inflation Expectations are out at 9:55 AM EST. This is major.
Yesterday
we said our bias was to the upside as we were dealing with a nearly correlated market with the only culprit being the Bonds. The Net Result? The Dow gained 114 points and the other indices rose as well. At one point the market was up over 155 points and the Dow retook the 15,000 mark. Today the markets aren't correlated and it seems as though every instrument except Gold is trading higher therefore our bias is neutral. Could
this change? Of Course. Remember anything can happen in a volatile market.
Yesterday we poised the question do the US markets follow Europe? Well after a choppy start in Europe (At one point yesterday morning they were down), the market rebounded and had a positive effect on the US. Of course excellent economic news didn't hurt either. Excellent pending home sales plus good personal income growth all boded well for the US markets. Unemployment Claims lower than expected needs to be taken with a grain of salt however as the more people who exhaust their benefits are now considered "employed" by the Dept. of Labor. Getting back to my question, I recall recently interviewing Markus Heitkoetter of Rockwell Trading and asking him that question. Markus commented that there was a time when the European exchanges would wait for the US to open and give direction, however now not so much. Markus is German and has spent many years trading in Europe, at the point that I did the interview with him, he had just returned from Europe after teaching a week long trading session.
Another difference he pointed out is the attitude between European and American traders. He said "if I asked a European why they took a trade they can give me 5 compelling business reasons why they took it", if I asked a North American: "because it felt good." He did acknowledge that the North Americans are getting better at it but it makes you wonder, doesn't it? One of the reasons why I interview market leaders is so you can benefit from their knowledge and experience and the one thing all of them have said and reiterated is the importance of planning. In other words, it's not an accident...
On Friday, June 7th I had the
opportunity to interview Mr. Sal Spedele regarding ObamaCare. Sal is a
20 year veteran of the Insurance Industry and we spoke at length
regarding the ramifications of the Patient Protection and Affordable
Care Act aka ObamaCare. If you are at all concerned about the future of
Health Insurance in the United States, then you need to listen to this
interview and act on it. Sal and his team is offering complimentary
advisory services to inform you of your rights and ramifications of this
Act. To download the article on ObamaCare, go to:
https://markettealeaves.sharefile.com/d/s978a806ae2e41569
To view my discussion with Sal:
http://youtu.be/sR_ine0b5Ro
As
readers are probably aware I don't trade equities. While we're on
this discussion, let's define what is meant by a good earnings report. A
company must exceed their prior quarter's earnings per share and must
provide excellent forward guidance. Any falloff between earning per
share or forward guidance will not bode well for the company's shares. This is one of the
reasons I don't
trade equities but prefer futures. There is no earnings reports with
futures and we don't have to be concerned about lawsuits, scandals,
malfeasance, etc.
Anytime
the market isn't correlated it's giving you a clue that something isn't
right and you should proceed with caution. Today our bias is neutral.
Could this change? Of course. In a
volatile market anything can happen. We'll have to monitor and see.
In
May, I spoke with John Karnas, CEO of Trend Following Trades. John has
an interesting background as he was a trader for a number of years
prior to buying Trend Following Trades. John is a believer in Trading
Plans and has a very precise method of developing aspiring traders. To
download the article I've written, go to:
https://markettealeaves.sharefile.com/d/sdf8f77f6e2c4347a
My discussion with John can be viewed at:
http://youtu.be/uVwHpMq1604
Please
note the video is about a half hour in length and we plan on producing
more in the near future. Also note that in the near future we will have
other videos where we will interview various trading leaders.
As
I write this the crude markets are trading higher and the US
Dollar is 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 August crude dropped to a low of
95.49 a
barrel and held. We'll have to monitor and see
if
crude
either goes lower or holds at the present level. It would appear at
the present time that crude has support at 94 a barrel and resistance
at 98. This could change. All we
need do is look at what happened last fall when crude was trading over
$100.00 a barrel. We'll have to monitor and see. Remember that crude is
the only commodity that is reflected immediately at the gas pump.
Future Challenges:
- Budget Battle - ongoing.
- Debt Ceiling in the August time frame.
- Asian Contagion - happening now
Crude
oil is trading higher and the US Dollar is 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 reports are released and the markets give us better
direction. As
always watch and monitor your
order flow as anything can happen in this market. This is why
monitoring order flow in today's market is crucial. We as traders are
faced with numerous challenges that we didn't have a few short years
ago. High Frequency Trading is one of them. I'm not an advocate of
scalping however in a market as volatile as this
scalping is an alternative to trend trading.
Recently Published Articles:
http://www.barchart.com/headlines/story/10110400/leadership-or-lack-thereof
http://www.forexcrunch.com/asian-contagion/
http://www.traderslog.com/john-karnas/
Remember
that without knowledge of order flow
we as traders are risking our hard earned capital and the Smart Money
will have
no issue taking it from us. Regardless of whatever platform you use for
trading purposes you need to make sure it's monitoring order flow.
Sceeto does an excellent job at this. To fully capitalize on
this newsletter it is important that the reader understand how the
various market
correlate. More on this in subsequent editions.
Good Morning Traders,
As
of this writing 4:50 AM EST, here’s what we see:
US Dollar –Down at 83.120, the Sept US Dollar is down 108 ticks and is trading at 83.120.
Energies – August Oil is up at 95.81.
Financials – The September 30 year bond is up 6 ticks and is trading at 135.05.
Indices – The September S&P
500 emini ES contract is up at 1596.50 and is up 4 ticks.
Gold – The August
gold contract is trading up at 1237.70 and is up 79 ticks from its close.
Initial Conclusion: This is nearly a correlated market. The dollar is down- and
oil is up+ which is normal but the 30 year bond is trading higher. The Financials should always correlate
with
the US dollar such that if the dollar is lower then bonds should follow
and vice versa. The indices are up and the US dollar
is trading lower which is correlated. Gold is trading higher which is correlated with the
US
dollar trading down. I tend to believe
that Gold has an inverse
relationship with the US Dollar as when the US Dollar is down, Gold
tends to rise in value and vice-versa. Think of it as a seesaw, when one
is up the other should be down. I point this out to you to make you
aware that when we don't have a correlated market, it means something is
wrong. As traders you need to be aware of this and proceed with your
eyes wide open.
All of Asia closed higher, including the Chinese Shanghai exchange. 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. Core PCE Price Index m/m is out at 8:30 AM EST. This is not major.
3. Personal Spending is out at 8:30 AM EST. This is major.
4. Personal Income is out at 8:30 AM EST. This is major.
5. Pending Home Sales are out at 10 AM EST. This is major.
6. FOMC Member Dudley speaks at 10 AM EST.
7. FOMC Member Powell speaks at 10:30 AM EST.
8. Natural Gas Inventories are released at 10:30 AM EST. This will move the Nat Gas market.
Yesterday
we said our bias was to the downside as the Financials (both USD and Bonds) were trading higher and usually that is not a bullish sign. Apparently Mr. Market thought otherwise as the Dow
gained 150 points and the other indices gained ground as well. Today we are dealing with a nearly correlated market as the Bonds are the culprit. If Bonds were trading lower I would say we had a correlated to the upside. Given that both Asia closed higher and Europe is currently trading higher, our bias is to the upside but bear in mind that we have 4 major economic reports due out today and they can drive the markets in any direction. Could
this change? Of Course. Remember anything can happen in a volatile market.
Yesterday we asked the question will the market thru on the gains made on Monday? Well despite not too good economic news the markets didn't disappoint. Under ordinary situations reporting a 1.8% growth in GDP versus 2.4% expected would have brought the markets down but it appears as though the Smart Money wanted to put capital back on the table. Bear in mind that the markets dropped over 700 points from a week ago when Bernanke spoke and I suspect the bulls want their money back. One reporter actually blamed the consumer for the bad GDP. Well Mr. Reporter, we said months ago that this sequester will come home to roost as it's liken to an invisible vampire that strikes when you least expect it. Another aspect that we are seeing is the US markets following Europe's lead as when the Continent is trading higher, it appears to bode well for the US markets. We'll have to explore this further and see....
On Friday, June 7th I had the
opportunity to interview Mr. Sal Spedele regarding ObamaCare. Sal is a
20 year veteran of the Insurance Industry and we spoke at length
regarding the ramifications of the Patient Protection and Affordable
Care Act aka ObamaCare. If you are at all concerned about the future of
Health Insurance in the United States, then you need to listen to this
interview and act on it. Sal and his team is offering complimentary
advisory services to inform you of your rights and ramifications of this
Act. To download the article on ObamaCare, go to:
https://markettealeaves.sharefile.com/d/s978a806ae2e41569
To view my discussion with Sal:
http://youtu.be/sR_ine0b5Ro
As
readers are probably aware I don't trade equities. While we're on
this discussion, let's define what is meant by a good earnings report. A
company must exceed their prior quarter's earnings per share and must
provide excellent forward guidance. Any falloff between earning per
share or forward guidance will not bode well for the company's shares. This is one of the
reasons I don't
trade equities but prefer futures. There is no earnings reports with
futures and we don't have to be concerned about lawsuits, scandals,
malfeasance, etc.
Anytime
the market isn't correlated it's giving you a clue that something isn't
right and you should proceed with caution. Today our bias is to the downside.
Could this change? Of course. In a
volatile market anything can happen. We'll have to monitor and see.
In
May, I spoke with John Karnas, CEO of Trend Following Trades. John has
an interesting background as he was a trader for a number of years
prior to buying Trend Following Trades. John is a believer in Trading
Plans and has a very precise method of developing aspiring traders. To
download the article I've written, go to:
https://markettealeaves.sharefile.com/d/sdf8f77f6e2c4347a
My discussion with John can be viewed at:
http://youtu.be/uVwHpMq1604
Please
note the video is about a half hour in length and we plan on producing
more in the near future. Also note that in the near future we will have
other videos where we will interview various trading leaders.
As
I write this the crude markets are trading higher and the US
Dollar is declining. This is normal. Think of it this way. If the
stock
market is trading lower, it's safe to assume that the crude market will
follow suit and vice versa. Crude trades with the expectation that
business activity is expanding. The barometer of which is the equities
or stock market. If you view both the crude and index futures side by
side you will notice this. Yesterday August crude dropped to a low of
93.68 a
barrel and held. We'll have to monitor and see
if
crude
either goes lower or holds at the present level. It would appear at
the present time that crude has support at 93 a barrel and resistance
at 97. This could change. All we
need do is look at what happened last fall when crude was trading over
$100.00 a barrel. We'll have to monitor and see. Remember that crude is
the only commodity that is reflected immediately at the gas pump.
Future Challenges:
- Budget Battle - ongoing.
- Debt Ceiling in the August time frame.
- Asian Contagion - happening now
Crude
oil is trading higher and the US Dollar is declining. This is normal.
Crude typically makes 3 major moves (long or short) during the
course of any trading day: around 7 AM EST, 9 AM EST and 2 PM EST when
the crude market closes. If crude makes major moves around those time
frames, then this would suggest normal trending, if not it would suggest
that something is not quite right. If you feel compelled to trade
consider doing so after 10 AM when the economic reports are released and the markets give us better
direction. As
always watch and monitor your
order flow as anything can happen in this market. This is why
monitoring order flow in today's market is crucial. We as traders are
faced with numerous challenges that we didn't have a few short years
ago. High Frequency Trading is one of them. I'm not an advocate of
scalping however in a market as volatile as this
scalping is an alternative to trend trading.
Recently Published Articles:
http://www.barchart.com/headlines/story/10110400/leadership-or-lack-thereof
http://www.forexcrunch.com/asian-contagion/
http://www.traderslog.com/john-karnas/
Remember
that without knowledge of order flow
we as traders are risking our hard earned capital and the Smart Money
will have
no issue taking it from us. Regardless of whatever platform you use for
trading purposes you need to make sure it's monitoring order flow.
Sceeto does an excellent job at this. To fully capitalize on
this newsletter it is important that the reader understand how the
various market
correlate. More on this in subsequent editions.
Good Morning Traders,
As
of this writing 5:05 AM EST, here’s what we see:
US Dollar –Up at 82.935, the Sept US Dollar is up 135 ticks and is trading at 82.935.
Energies – August Oil is down at 95.06.
Financials – The September 30 year bond is up 10 ticks and is trading at 134.15.
Indices – The September S&P
500 emini ES contract is up at 1586.50 and is up 20 ticks.
Gold – The August
gold contract is trading down at 1232.30 and is down 433 ticks from its close.
Initial Conclusion: This is not a correlated market. The dollar is up+ and
oil is down- which is normal and the 30 year bond is trading higher. The Financials should always correlate
with
the US dollar such that if the dollar is lower then bonds should follow
and vice versa. The indices are 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 about half the exchanges closing higher and
the other closing lower. As of this
writing all of Europe is trading higher.
Possible challenges to
traders today is the following
1. Final GDP q/q is out at 8:30 AM EST. This is major.
2. Final GDP Price Index q/q is out at 8:30 AM EST. This is major.
3. Crude Oil Inventories are out at 10:30 AM EST. This will move the crude markets.
Yesterday
we said our bias was to the upside as the markets were nearly correlated with the exception of the Bonds. The net result? The Dow gained 100 points and the other indices gained ground as well. Today we are not dealing with a correlated market. The Financials are trading higher and the indices are as well which is not correlated. Hence our bias is to the downside today. Could
this change? Of Course. Remember anything can happen in a volatile market.
Yesterday we said the markets were poised to go higher as the futures were nearly correlated and it looked as though Asia was regaining some lost ground. Europe followed this and closed higher and the Dow closed higher...finally. This was helped by positive news on the economic front. Durable Goods, Core Durable Goods, New Home Sales all served to bolster the indices. Even Case-Schiller reported a 12% gain in home prices, although I would be a little leery of that. The question is will we have follow thru today? Bear in mind that the Dow is off about 600 points from last Tuesday's close ( before Bernanke's befuddlement). As always we'll have to monitor and see...
On Friday, June 7th I had the
opportunity to interview Mr. Sal Spedele regarding ObamaCare. Sal is a
20 year veteran of the Insurance Industry and we spoke at length
regarding the ramifications of the Patient Protection and Affordable
Care Act aka ObamaCare. If you are at all concerned about the future of
Health Insurance in the United States, then you need to listen to this
interview and act on it. Sal and his team is offering complimentary
advisory services to inform you of your rights and ramifications of this
Act. To download the article on ObamaCare, go to:
https://markettealeaves.sharefile.com/d/s978a806ae2e41569
To view my discussion with Sal:
http://youtu.be/sR_ine0b5Ro
As
readers are probably aware I don't trade equities. While we're on
this discussion, let's define what is meant by a good earnings report. A
company must exceed their prior quarter's earnings per share and must
provide excellent forward guidance. Any falloff between earning per
share or forward guidance will not bode well for the company's shares. This is one of the
reasons I don't
trade equities but prefer futures. There is no earnings reports with
futures and we don't have to be concerned about lawsuits, scandals,
malfeasance, etc.
Anytime
the market isn't correlated it's giving you a clue that something isn't
right and you should proceed with caution. Today our bias is to the downside.
Could this change? Of course. In a
volatile market anything can happen. We'll have to monitor and see.
In
May, I spoke with John Karnas, CEO of Trend Following Trades. John has
an interesting background as he was a trader for a number of years
prior to buying Trend Following Trades. John is a believer in Trading
Plans and has a very precise method of developing aspiring traders. To
download the article I've written, go to:
https://markettealeaves.sharefile.com/d/sdf8f77f6e2c4347a
My discussion with John can be viewed at:
http://youtu.be/uVwHpMq1604
Please
note the video is about a half hour in length and we plan on producing
more in the near future. Also note that in the near future we will have
other videos where we will interview various trading leaders.
As
I write this the crude markets are trading lower and the US
Dollar is advancing. This is normal. Think of it this way. If the
stock
market is trading lower, it's safe to assume that the crude market will
follow suit and vice versa. Crude trades with the expectation that
business activity is expanding. The barometer of which is the equities
or stock market. If you view both the crude and index futures side by
side you will notice this. Yesterday August crude dropped to a low of
94.59 a
barrel and held. We'll have to monitor and see
if
crude
either goes lower or holds at the present level. It would appear at
the present time that crude has support at 93 a barrel and resistance
at 97. This could change. All we
need do is look at what happened last fall when crude was trading over
$100.00 a barrel. We'll have to monitor and see. Remember that crude is
the only commodity that is reflected immediately at the gas pump.
Future Challenges:
- Budget Battle - ongoing.
- Debt Ceiling in the August time frame.
- Asian Contagion - happening now
Crude
oil is trading lower and the US Dollar is advancing. This is normal.
Crude typically makes 3 major moves (long or short) during the
course of any trading day: around 7 AM EST, 9 AM EST and 2 PM EST when
the crude market closes. If crude makes major moves around those time
frames, then this would suggest normal trending, if not it would suggest
that something is not quite right. If you feel compelled to trade
consider doing so after 10:30 AM when the economic reports/crude inventory numbers are released and the markets give us better
direction. As
always watch and monitor your
order flow as anything can happen in this market. This is why
monitoring order flow in today's market is crucial. We as traders are
faced with numerous challenges that we didn't have a few short years
ago. High Frequency Trading is one of them. I'm not an advocate of
scalping however in a market as volatile as this
scalping is an alternative to trend trading.
Recently Published Articles:
http://www.barchart.com/headlines/story/10110400/leadership-or-lack-thereof
http://www.forexcrunch.com/asian-contagion/
http://www.traderslog.com/john-karnas/
Remember
that without knowledge of order flow
we as traders are risking our hard earned capital and the Smart Money
will have
no issue taking it from us. Regardless of whatever platform you use for
trading purposes you need to make sure it's monitoring order flow.
Sceeto does an excellent job at this. To fully capitalize on
this newsletter it is important that the reader understand how the
various market
correlate. More on this in subsequent editions.
Good Morning Traders,
As
of this writing 5:05 AM EST, here’s what we see:
US Dollar –Down at 82.480, the Sept US Dollar is down 153 ticks and is trading at 82.480.
Energies – August Oil is up at 95.90.
Financials – The September 30 year bond is up 25 ticks and is trading at 135.19.
Indices – The September S&P
500 emini ES contract is up at 1577.50 and is up 37 ticks.
Gold – The August
gold contract is trading up at 1286.60 and is up 95 ticks from its close.
Initial Conclusion: This is a nearly correlated market. The dollar is down- and
oil is up+ which is normal but the 30 year bond is trading higher. The Financials should always correlate
with
the US dollar such that if the dollar is lower then bonds should follow
and vice versa. The indices are up and the US dollar
is trading lower which is correlated. Gold is trading higher which is correlated with the
US
dollar trading down. I tend to believe
that Gold has an inverse
relationship with the US Dollar as when the US Dollar is down, Gold
tends to rise in value and vice-versa. Think of it as a seesaw, when one
is up the other should be down. I point this out to you to make you
aware that when we don't have a correlated market, it means something is
wrong. As traders you need to be aware of this and proceed with your
eyes wide open.
Asia closed mixed with about half the exchanges closing higher and the other closing lower. The good news is the Shanghai exchange that caused the problem yesterday closed fractionally lower. As of this writing all of Europe is trading higher.
Possible challenges to
traders today is the following
1. Core Durable Goods Orders are out at 8:30 AM EST. This is major.
2. Durable Goods are out at 8:30 AM EST. This is major.
3. S&P Case Schiller HPI is out at 9 AM EST. This is major.
4. HPI is out at 9 AM EST. This is major.
5. CB Consumer Confidence is out at 10 AM EST. This is major.
6. New Home Sales is out at 10 AM EST. This is major.
7. Richmond Manufacturing Index is out at 10 AM EST. This is major.
Yesterday we said our bias was to the downside as the Bonds weren't correlated with the USD and Gold was trading lower. The net result? The Dow dropped 139 points and the other indices didn't fare too well either. Today the markets aren't correlated with the culprit being Bonds. If the Bonds were trading lower we would have a completely correlated market to the upside, however our bias is to the upside today. Asia has started to rebound and Europe is trading higher. Bear in mind that we have a number of major reports today that could drive the markets in any direction. Could
this change? Of Course. Remember anything can happen in a volatile market.
On Sunday evening the Shanghai exchange dropped by 5.3% which was the biggest drop for this market since August, 2009 when it dropped by 6.7%. This in turn caused the Asian markets to drop significantly which in turn effected Europe and eventually the US markets. Are we seeing more Asian Contagion whereby what happens in the Far East will eventually effect the US? Shanghai is significant as China is now the world's number 2 economy and the US is tied to China whether we like it or not but I guess that's one of the "benefits" of outsourcing. Sounds great going in and any Accountant can easily cost justify but there are ramifications. One of those ramifications are if they have a downturn, it will easily affect the US as it could mean orders placed here won't be filled by Chinese suppliers and US firms will have late and backlogged orders which will be reflected in quarterly earnings and we all know what that means... Wouldn't it be "innovative" if American companies started to produce their own goods again? Guess nobody thought about a backup plan, just in case...
On Friday, June 7th I had the
opportunity to interview Mr. Sal Spedele regarding ObamaCare. Sal is a
20 year veteran of the Insurance Industry and we spoke at length
regarding the ramifications of the Patient Protection and Affordable
Care Act aka ObamaCare. If you are at all concerned about the future of
Health Insurance in the United States, then you need to listen to this
interview and act on it. Sal and his team is offering complimentary
advisory services to inform you of your rights and ramifications of this
Act. To download the article on ObamaCare, go to:
https://markettealeaves.sharefile.com/d/s978a806ae2e41569
To view my discussion with Sal:
http://youtu.be/sR_ine0b5Ro
As
readers are probably aware I don't trade equities. While we're on
this discussion, let's define what is meant by a good earnings report. A
company must exceed their prior quarter's earnings per share and must
provide excellent forward guidance. Any falloff between earning per
share or forward guidance will not bode well for the company's shares. This is one of the
reasons I don't
trade equities but prefer futures. There is no earnings reports with
futures and we don't have to be concerned about lawsuits, scandals,
malfeasance, etc.
Anytime
the market isn't correlated it's giving you a clue that something isn't
right and you should proceed with caution. Today our bias is to the upside.
Could this change? Of course. In a
volatile market anything can happen. We'll have to monitor and see.
In
May, I spoke with John Karnas, CEO of Trend Following Trades. John has
an interesting background as he was a trader for a number of years
prior to buying Trend Following Trades. John is a believer in Trading
Plans and has a very precise method of developing aspiring traders. To
download the article I've written, go to:
https://markettealeaves.sharefile.com/d/sdf8f77f6e2c4347a
My discussion with John can be viewed at:
http://youtu.be/uVwHpMq1604
Please
note the video is about a half hour in length and we plan on producing
more in the near future. Also note that in the near future we will have
other videos where we will interview various trading leaders.
As
I write this the crude markets are trading higher and the US
Dollar is declining. This is normal. Think of it this way. If the
stock
market is trading lower, it's safe to assume that the crude market will
follow suit and vice versa. Crude trades with the expectation that
business activity is expanding. The barometer of which is the equities
or stock market. If you view both the crude and index futures side by
side you will notice this. On Friday August crude dropped to a low of
92.68 a
barrel and held. We'll have to monitor and see
if
crude
either goes lower or holds at the present level. It would appear at
the present time that crude has support at 93 a barrel and resistance
at 97. This could change. All we
need do is look at what happened last fall when crude was trading over
$100.00 a barrel. We'll have to monitor and see. Remember that crude is
the only commodity that is reflected immediately at the gas pump.
Future Challenges:
- Budget Battle - ongoing.
- Debt Ceiling in the August time frame.
- Asian Contagion - happening now
Crude
oil is trading higher and the US Dollar is declining. This is normal.
Crude typically makes 3 major moves (long or short) during the
course of any trading day: around 7 AM EST, 9 AM EST and 2 PM EST when
the crude market closes. If crude makes major moves around those time
frames, then this would suggest normal trending, if not it would suggest
that something is not quite right. If you feel compelled to trade
consider doing so after 10 AM when the economic reports are released and the markets give us better
direction. As
always watch and monitor your
order flow as anything can happen in this market. This is why
monitoring order flow in today's market is crucial. We as traders are
faced with numerous challenges that we didn't have a few short years
ago. High Frequency Trading is one of them. I'm not an advocate of
scalping however in a market as volatile as this
scalping is an alternative to trend trading.
Recently Published Articles:
http://www.barchart.com/headlines/story/10110400/leadership-or-lack-thereof
http://www.forexcrunch.com/asian-contagion/
http://www.traderslog.com/john-karnas/
Remember
that without knowledge of order flow
we as traders are risking our hard earned capital and the Smart Money
will have
no issue taking it from us. Regardless of whatever platform you use for
trading purposes you need to make sure it's monitoring order flow.
Sceeto does an excellent job at this. To fully capitalize on
this newsletter it is important that the reader understand how the
various market
correlate. More on this in subsequent editions.
