Thursday, September 30, 2010

GDP Report Day - Review

Breakout Trade Update:

Target filled at 1153 for + 14 profits points per contract. As posted on Twitter.
Reversal scenario at key resistance level as described on Wednesday.
Today : Intraday Bearish High Volume Reversal at Weekly Resistance ( 5min -Volume Spike: 124k Ultra High )
Daily :  Bearish Pin Bar , Outside Day
New Swing Position : SHORT from 1145.75

Line In the Sand : 1141.25

Volume output on the S&P 500 rose for a third straight session, coming in at 3.67 billion shares today.

Despite some weakness over the past two sessions, the major indexes put in a stellar performance in Q3 - and the best September since 1939 . In terms of monthly performances overall, the broad market saw its best showing since April 2009.

Early on today, the market reacted positively to a revised estimate on Q2 GDP which is now estimated to come in at an annualized growth rate of 1.7% (previous estimate: GDP growth of 1.6%). As well, personal consumption is estimated to have risen by 2.2% (previous estimate: a rise of 2.0%). Meanwhile, core personal consumption data for Q2 was downwardly revised, now showing a growth in this category of one percent rather than the previously estimated 1.1%.

The latest reading on initial jobless claims (for the week ending September 25) came in better than expected: the number of such claims reportedly totaled 453,000 (consensus estimate: 457,000 initial claims). Week-over-week, the latest numbers thus show 16,000 fewer claims. Improvement was also seen among continuing claims - these fell 83,000 week-over-week to a total of 4.46 million. The latest reading on the Chicago PMI was also positive: For September, the reading was 60.4 (previous month: 56.7; consensus estimates for September: a reading of 56.0).

Because of this slew of positive economic data, the market did not take its (early) cues from Europe, as it often has in recent weeks. For instance, traders failed to show negative reactions to Moody's decision to downgrade Spain's debt, to a report indicating that Ireland's banking sector requires billions of new capital, nor to poor economic data from Japan.

Daily trading volume benefited from window dressing and end-of-quarter portfolio adjustments. In fact, today's volume was the second highest seen this month - on the NYSE, volume came in at close to 1.3 billion shares.

New Swing Position

Trade Plan : Breakout from Prev Narrow Day with target at Weekly Pivot
Possible Reversal at Weekly Zone
SELL Stop 1136 and BUY Stop 1144. Previous orders canceled.
6:15am - Crude Oil Futures Breakout above Prev High - (First Clue ). EURO Futures Pre-Report breakout to new highs ( Second Clue )
8:12am - New Orders : BUY Stop 1139, SELL Stop 1137.
8:30am - Filled : Long 1139. Reaction to GDP Report. SELL Stop 1141

If either one gets fill the other one will be the stop loss.
Setup : Daily Doji and NR 9.GDP Report. SP500 Index : Daily Inside Day
 ( Above E-Mailed to Subscribers Wed after the close )

It appears to have become fashionable to attribute any bout of weakness on the US markets directly to Europe. Today, especially in the absence of any major economic data releases, the major indexes apparently followed the US financial sector which was weak as it followed the banking sector in Europe. European protests - in Brussels and elsewhere - against austerity measures served to pressure equities in that region.

Trading on US markets has lacked a clear direction recently, but third quarter trading has been very positive overall, with the S&P 500 on track to producing a Q3 gain of nearly ten percent. In September alone, the S&P 500 has thus far rallied 9%, its best monthly gain since April 2009.

Trading has also been subdued as Q3 draws to a close and Q4 earnings season will not start until early October, with Alcoa reporting on October 7. Many large players are thus in a wait-and-see position, market commentators suggest.

The bond market appears to indicate that the US Federal Reserve will make a move to push long-term interest rates even lower in order to encourage economic growth. The Fed is believed to purchase Treasuries to accomplish this (i.e., raising bond prices and lowering yields). There is however some dissent among Fed members, with the Philadelphia Fed President stating today he does not favor further asset purchases by the Fed at this time

Tuesday, September 28, 2010

Black Gold ( Oil ) Trade Wins

First Crude Oil Futures trade wins. This sucker moves faster than ES !

Found Black Gold without getting dirty.

Saturday, September 25, 2010

Durable Goods Report Day-Review

The broad market saw its strongest single-session gain in two weeks and thus boosted the indexes to their fourth straight weekly gain after a few days of shallow consolidation. This puts the S&P 500 to a four-month high. Some market commentators however question the underlying fundamental economic strength of this rally saying instead that it is largely about 'window dressing' for the upcoming end of quarter.

Today, we did however see positive economic data releases (with the exception of housing data - see below). August durable goods orders data was released today and appeared to have a positive impact on trading. While durable goods order were actually down last month, slipping by 1.3% (which made for the worst monthly drop in a year), that decline was still better than the anticipated loss of 1.4% had economists had been expecting. When the transportation component of these goods orders is excluded, orders in fact spiked two percent higher (consensus estimate: an increase of only 0.6%).

The Commerce Department said today that August new home sales were largely unchanged month-over-month, coming in at an annualized 288,000 units, meeting consensus estimates. This data hardly indicates any recovery in the housing market, as the number of new homes sold was the second-lowest on record; August 2010 sales were in fact 29% below those registered a year earlier for the same month. One market analyst called this a 'pitiful performance', adding that a 'meaningful pickup in sales' would not be seen until next year.

According to the National Association of Realtors, in August sales of previously occupied homes were up 7.6% as compared to July, rising to a seasonally adjusted annual rate of 4.13 million. This number, too, is very low: it represents the second-poorest month in more than 10 years (note that July was the worst month for previously owned home sales in 15 years). In August 2010, the median sales price for a new home came in at $204,700, off by 1.2% compared to one year earlier (sales prices are now at their lowest levels since late 2003).

Anatomy of a Swing Trade


Long position from 1124 was liquidated at 1143.75 for + 19.75 points profits and NEW Swing position short 1143.75 on FED Day added another + 19.75 pts for a total of + 39.50 points per contract. Both profits gains being exactly the same is just a coincidence.

Friday, September 24, 2010

Update on SHORT Swing Position

Position in profit + 22 pts and expecting to find support between : 1109 and 1113

Friday Sept 24 UPDATE :

SHORT position liquidated at 1124.50 during Globex Session. Globex price action always gives clues . Now Out anf FLAT on my Swing Account.

Financial Press Overview:

US market weakness these days is often explained by some kind of trouble emerging from Europe. Case in point, today the press reported that early US equity weakness was precipitated by a lower reading on business activity in the countries that use the euro, as well as the fact that Ireland's economy contracted some 1.2% in Q2. The fact that US applications for unemployment benefits rose unexpectedly last week also contributed to a stalling of the recent September rally.

To put things into perspective, stocks have seen a huge rally in September that has thus far boosted the Dow some 6.5% this month, although overall the benchmark is only up 2.2% for the year. The Dow has closed higher on 13 of the past 16 sessions and has just now broken its winning streak. Some market commentators are however turning bearish, suggesting that the rally might be over and that economic data cannot support it from a fundamental perspective.

According to the Labor Department, first-time unemployment claims rose last week, up by 12,000. Specifically, initial jobless claims for the week ending September 18 came in at 465,000 (consensus estimate: 450,000 claims).

In other economic data, home sales improved after having recently slipped to 15-year lows. In August, existing home sales rose 7.6% month-over-month, coming in at an annualized 4.13 million units (consensus estimate: 4.1 million units). Furthermore, leading indicators for August (an index of future economic activity) rose more than expected. In spite of expectations for an increase of 0.1%, leading indicators came in up 0.3%.

Both silver and gold continued their meteoric rise to new highs. The continuous silver contract almost hit a 30-year high (around $21 per ounce) while gold traded near its all-time high (around $1296 per ounce).

Thursday, September 23, 2010

Pre-Open High Volume Reversal

As posted previously Saturday, Sept 18
the Reversal after the FED Day scenario as expected and called on last Saturday.
Long position from 1124 was liquidated at 1143.75 for + 19.75 points profits and NEW Swing position short: 1143.75
SETUP: 4 Hr MACD Bearish Divergence
RSI ( 2 ) Reading : 93
VIX Count
Other Intermarket Clues
Also 9-21 was a TTT SELL short day, that worked like a champ.

This Trade shown here is a Counter Trend Entry. The Trend is clearly down but the buyers initiated their longs at the key level shown on the chart. This is a classic High Volume Reversal with a very tight stop loss ( Low Risk ). Many of this HVR often occur but they failed to follow through, hitting the stop loss of many people that don't know what they are doing. For this trade to follow through immedietly , it must to take place at the correct exact level and at the correct magnitude of Volume, something that many day trading " Educators " or false pretenders don't teach you. Timing and Presicion is everything in trading.

Trading wisdom states that the majority is usually wrong.We make money from the imbalance of buyers and sellers that is created. This is how trend reversals and explosive moves occur. The question is, “Are you the first one on the scene when the imbalance takes place”?

Notable Quotes :
Jack Welch, another long time republican donor that expatriated thousands of US jobs during his GE position as CEO ,said in CNBC :
" We got very, very touch jobs outlook" . " Economy is not going to bail us out with these Government policies "
I wonder why he never said that during the Bush Administration when it was clearly worst than now.Double standards ? He is also spreading FALSE  rumors in CNBC about President Obama that he is
" Anti-Business ".
Warren Buffett, the worlds greatest investor, said that when the Government needs revenues the most, they should get it from the people that have the most ( wealthy citizens ).This statement is in full support of Higher Taxes Policies proposed by President Obama.

Other News : Communist China is increasing Oil deals with Iran ( CNBC ) ,while taking thousands of US jobs, thanks to previous republicans trade policies.

Wednesday, September 22, 2010

FED Day Review - Sept 21 Tuesday

At first investors were excited as the Fed implied they were ready to do more to help the economy, but excitement lulled as investors came to the realization that the FED simply doesn't have the elixir that is needed. They are going to be even more surprise when they realize that the Republicans don't have it either.

Tuesday, September 21, 2010

Fed-Day Performance

Fifth Day of Gains for the Market until Sept 26

Lookout below

FED-Day-Home Run Wins

Long Entry using the 1-min time frame.
The FED is thinking that if Obama must become a Magician , then he must do some Voodo Magic or Santeria to stimulate the economy and satisfy the latest higher standards imposed by the corrupted and wicked republican public and the Tea Party Radicals.
The President is calling on all known Magicians for a summit to the White House.

Pre-Open-First Trade Wins-Housing Starts Report

Only a Scalp since is very close to Prev High, can't get too greedy.
"Hedge Funds are Long Equities" ,CNBC
Usually they are wrong , DUH !

Monday, September 20, 2010

Monday-Before FED Day -Obama Houdini Speaks

Breakout before FED Day and the Bearish H &S is history and void.
Previous Short position liquidated and now Long
Waiting for Obama the Magician to fix all the problems in less than six months , left by the previous incompetent administrations.His bar was raised higher today by the good faith Republicans and Tea Party radicals.
The President will have perform magic now.

Saturday, September 18, 2010

Opt.Exp Friday Price Action Review

There is a high probability of a market trend reversal after this Opt. Exp and FED Day on next Tuesday. Also Sept 26 is a Cycle Turn Date ( Larry Williams ) But at a much higher price after the short squeeze is over.There is a heavy accumulation of stops above a key institutional level.
New Swing SHORT Position :
SOLD 1132.50 ( R- 1 )
Target to be determine later in the week.
Daily Bearish Pin Bar failed to close above key Monthly 1130 level.
Bearish 4Hr - MACD Divergence
Daily RSI ( 2 ) Overbought Reading : 99
Monday Sept 20 :
Update on Swing Position : Exit STOP Filled for 10 pts profits
Reason for Exit: Price Action during the Globex session and other clues.
Long from 1124

Risk Management Per Trade is the Key

For many experienced traders this concept is old but for new inexperienced traders this is essential and vital.

Thursday, September 16, 2010

Update on Open Position from August 31st

Long from 1054.25 , August 31st :
Open profits : + 73.25 Points
$ 3,662.50 per contract
Friday, Sept 17
" It's About Jobs Stupid "
Watching CNBC this morning, just heard this phrase from a Guest named Bernie Marcus.
This guest either suffers from Selective Amnesia ,
amnesia about particular events that is very convenient for the person who cannot remember, or he is just a pathological liar, either way it is a self serving attitude.
My responce to this guy : It is the Jobs Stupid . The undisputed historical facts are that it was the trade policies of the republican administrations that gave away millions of jobs to the Chinese Communists.
It is the Jobs STUPID : It is the jobs that were NOT created during the Bush Administration.
the fact is that the Bush years -- which were full of across-the-board tax cuts -- turned out to be the weakest eight-year span for the U.S. economy in decades.
It is Jobs STUPID : It is the lack of jobs that the American soldiers returning home will not have if the Republicans take over Congress, STUPID !
Republicans — and some Democrats — want to make all the tax cuts permanent or at least to extend them as long as the economy remains fragile. They fear that a tax increase would hurt the economic recovery.
Well, we all know that neither of those is going to happen. Republicans won't abandon their wealthiest donors to help out everyone else. The GOP will continue to block extension of tax cuts for the middle class unless the rich get theirs too.
So either all the Bush tax cuts will expire unless the Democrats cave and extend all of them. Of course extending tax cuts on the wealthiest Americans (those with incomes in excess of $200,000 for individuals or $250,000 for families) will only increase future deficits more, but that won't stop Republicans from claiming the deficit is all the fault of Democrats and "entitlement programs" (you know, Social Security and Medicare which are subject to a separate, regressive tax).
As for spending, thanks in large part to the costs of our wars in Afghanistan and Iraq, deficits will remain high (and no, our involvement in Iraq isn't over when you still have 50,000 US troops there). The companies that make bullets, bombs and drones and electrocute soldier in showers (Hi KBR!) will continue to do well, but everyone else will suffer from lack of spending.
Without some easing of credit for small business or government investment in rebuilding and modernizing our infrastructure (updating the electrical grid so that it loses less electricity, spending on or tax credits for new green technologies like wind and solar, fixing bridges and roads, investing in education, transportation, etc.) new jobs will be hard to come by.
The Democratic campaigns for the Fall should be be emphasizing that we are falling behind other developed nations because we refuse to INVEST in the infrastructure and new technologies that will secure more jobs now and better paying jobs in the future.
However, it seems the Dems are falling into the GOP trap of having the debate over the Bush tax cuts for the rich and corporate welfare that allows jobs to be outsourced overseas which we know failed to generate job growth in the past
Three million piddling jobs created in 8 years during the Bush Administration? ( Wall Street Journal article )
Remember, this came during a time when Bush increased government spending to private companies and to pay for our massive wars in the Middle East. It was the worst job creation during an economic recovery (from the recession created after the Tech stock bubble burst in 2000) ever. So why on God's Green Earth would any Democrat talk about tax cuts as being the panacea to our nation's job woes?
Every time a Republican says tax cuts create jobs a Democrat should be waving that Wall Street Journal article in his or her face. Every time they say we need to extend the Bush tax cuts for the wealthiest Americans we should be saying that isn't going to create jobs for the unemployed because the record proves it. Bush's job creation didn't even keep up with the rise in the workforce population.
In addition, during the halcycon years of the Bush tax cuts, 8.3 MILLION more people fell below the poverty line during his eight years. Median incomes fell from $52,500 at the end of 2000 (Clinton's last year)to an inflation adjusted $50,303 in 2008 That's a drop of 4.2 per cent.
So who benefited from the tax cuts? Not people who needed jobs, not most workers, not poor people. No, the people who most benefited from the tax cuts were MILLIONAIRES and BILLIONAIRES
So why are Democrats still talking about tax cuts? Eight years of tax cuts and Republican mismanagement cost us jobs, made health care more expensive or unavailable for more Americans, substantially increased poverty and lowered incomes for most Americans. That's the message Democrats should be speaking out about loudly and clearly at every campaign stop and in every speech and in every ad they run this year.

Wednesday, September 15, 2010

Precision Low-Risk Entry-WINS

Third Hour Long entry at key level,
Stop Loss : 2 ticks
Do not try this unless you know the Institutional Levels.

Friday, September 10, 2010

Another Low Risk Trade-Wins

Very Low Risk as in Precision Entry , Only Two ticks STOP Loss.

Thursday, September 9, 2010

Pre-Open Breakout Trade-Wins Again

Final target filled at 1110 for + 7 points gain per contract.

My subscribers must be very happy.

Previous Open position : Long from 1050

Monday, September 6, 2010

Weekly View Assesment of The Trend

What matters for equities is earnings and not GDP growth. US GDP growth projections are being cut, but earnings projections have been little affected so far. Investors and analysts are hoping that, to the extent the soft patch in US GDP growth lasts for only a few quarters ( and who cares about the part time workers without benefits ) and does not spillover to the rest of the world, US companies will be able to protect their revenues and profits (thanks to the Republicans ). Indeed, this is what happened during 2Q, when US companies were able to deliver strong top line and EPS growth even as US GDP grew at only a 1% pace.
The macro picture has deteriorated in recent months, but it has not collapsed. This has reduced the margin for error in terms of corporate earnings.
The market has been volatile, but it has remained resilient because we just aren’t seeing the weakness in corporate earnings. Persistent macro weakness and a few more earnings seasons will likely change that as corporations move to adjust expectations heading into a more difficult environment and the analysts subsequently play catch-up.
The Bulls saved the collapse on low volume this summer and the Bearish Head and Shoulders is in question.
Political comments by CNBC Analysts are in agreement that Investors and Corporate leaders are in a " nervous " mood. What the don't tell the public and viewers is that the majority of these people are republicans or independent high net worth individuals that never voted for this President and all they care for is lowering their taxes. CNBC maintains a republican bias and advocates a self serving anti-democratic view and anti-social-economic equality for many years, and that is odvious to anyone watching this channel. The obssesion with the Bush Tax Cuts continues in CNBC.

Saturday, September 4, 2010

Payrolls Day Review

Not a bad day . Four winners before the Open plus 6 more during the Day Session. Plus a winning Open Position.
As with the Manufacturing PMI report, however, the details point to a far less rosy picture than the headline figure and market reaction suggest ;

Aggregate hours worked were flat.

All the employment gains were part-time — full-time employment, as per the Household Survey, plunged 254,000.

Those working part-time for “economic reasons” surged 331,000 — the biggest increase in six months.

While private payrolls were better than expected, 10,000 of that +67,000 tally reflected returning construction workers who had been on strike.

Manufacturing employment was down 27,000 and total goods producing jobs were flat — hardly signs of a robust economic backdrop.

The diffusion index for private payrolls actually fell to 53.0 from 56.7 in July — a seven-month low. It was 68.0 at the April high, which is consistent with an economy slowing down to stall-speed.

The labor market gap widened with the all-inclusive U6 unemployment rate rising to a four-month high of 16.7% from 16.5% in July. This is why the odds are stacked against a sustained acceleration in wages.

Keep in mind that markets did not have much time to digest the US jobs reports Friday before markets closed, and could well take back gains next week upon reflection on the above details. Volumes in the stock market rallies were exceptionally thin, further undermining out belief in the rally.
Wishing all of you a wonderful Labor Day Weekend. If you have a full time job with benefits, consider yourself very lucky and enjoy it before the Chinese Communists take it away, complements of our Republicans politicians under pressure from their Corporate constituents( a.k.a Free Trade Bullshit Continues).

Labor Day Trade Wins Again

Long from 1054.25 , Open Position Gain + 49.25 points per contract:

My Subscribers were alerted to this High Probability / Low Risk Trade and now they are enyoing the fruits of their labor.

There is a tendency for the first day of the month to be higher. Seven of the last 9 first days have been up. The first day of the month is when a lot of new capital is available for investment.

It closed the month of August 10.75% above the low for the month. I have found that when we close in the bottom 20% of the range for the month, the next two months have a tendency to be up.

There were other clues that made this trade succesfull. August 31st was an NR6 , Daily Doji and that sets up another low risk breakout trade.