Another Low Risk Trade-Wins

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

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

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.

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.

The Market's Dilemma

Weekly Long Term Picture looks sideways and the fundamentals look very uncertain.

It is a traders market and Buy and Hold does not apply.

Beware !

GDP Report Day - Review

The Long Term Trend Line from the March Low held on friday and now the 1040 Level becomes the major Line In the Sand between Bulls and Bears.

The Clue was in the 20-Day Low:

The fact that new NYSE 20-day lows declined despite the S&P trading 0.7% below last Tuesday’s low indicated we would see a close back over Wed 1054.50 close by next Tuesday at the latest.

Typically you’ll see an expansion of new 20-day NYSE lows when the SPX trades below the previous day’s low given that this is a much more sensitive measure than the 52-week high/low data. When this doesn’t occur, it’s a supportive sign for stocks, and the S&P has a strong record of posting a subsequently higher close within the next four sessions. Of the last 30 occurrences, all 30 led to a higher SPX close (above the setup day’s close) within four days… It worked again this time.

During the Globex session on Sunday if any retracement occurres it will find support at 1054.25, which is Friday's I B High and with the confluence of the previous VAH 1055.50. This 1054 level is also the 38.2 Fibonacci retracement from Friday's High. You can Bank on it !

Monday , August 30th

As predicted above the market retraced back to 1054.75 that is only two ticks from 1054.25 ( Prev I B High ) and is also the 50% Fibonacci retracement from Globex High. The 1055 is the Pivot. Sold 1055 in the 6th Hour . That was the Line In the Sand. The target is 1010

Position was exited during the Globex session for a 10 pts profit.

Tuesday - August 31

BUY Stop 1054.25 . Filled Long 1054.25 - Open Position + 27.50 Pts

Setup : N R 6 and Doji

Wednesday September 1st : Long from 1054.25