Good Evening,
Let me point out the obvious:
**Initial claims were higher than expected every week this month, culminating with a 427k print yesterday
**The Dow traded above 12,800
**Gold cleared the 1550 level
**Silver almost touched 50
**The dollar continued its decline
**The AUD climbed to an all time high - almost hitting 1.10
**The Fed came through with: extended and extremely accomodative
More than point out the obvious, I really want to make sure that traders out there understand what it is they should be looking for. They should not be looking for "the next big thing" or listening to CNBC (or any other analyst, software program or "educator") for the holy grail or for ideas.
I will put this in CAPS: UNTIL YOU KNOW WHO YOU ARE AS A TRADER, IF YOU LISTEN TO OTHERS, YOU WILL FAIL.
I can prove this by a few questions:
**How many of you know what type of trader you are: meaning, what style you are?
**How many of you know the proper amount in dollars and more importantly, percentages to risk of your account on any one trade?
**How many of you know the proper dollar amount or percentage to risk of each individual trade you put on?
**How many of you can look at your entire portfolio which includes all assets, trading accounts, retirement accounts and have a good understanding of how to maximize your profit and income generation while sleeping well at night because you are protected correctly given YOUR situation and what the markes are telling us to do, both fundamentally and technically?
**How many of you can put together a fundamental and technical picture of the market(s) that you are trading?
If you can't answer YES to these questions, then you are in dangerous waters if you think that someone out there is going to make you profitable.
Between this blog and the bi-monthly webinars and in some cases, one-on-one coaching, you can cut out a lot of the crap that's out there, focus on who YOU are as a trader/investor and move on with safe, high probability, low risk, high reward trades, IF you have the emotional control and discipline to implement your trading plan when you see an opportunity, stick to your plan as an un-emotional trader and let the charts tell you how to manage the trade.
Have a great weekend and Be Environmentally Cool
Coach Brian
Friday, April 29, 2011
Thursday, April 28, 2011
The Local's Take: Moving Average Commentary
Good Afternoon,
I am not posting any charts on this blog as we went through a bunch last night in the webinar (thanks to all who stuck through the initial audio problems) where we had perfect markets to introduce moving averages. You were able to see how moving averages suffer in rangebound markets, but not in THESE markets - the trend is your friend and you can use moving averages in the following ways:
**support or resistance
**when the price crosses the moving average it gives you a buy, sell, entry or exit indicator
**crossover - using the faster MA to cross the slower MA and signal an entry or exit.
These markets are continuing to be a moving average traders dream, but yo must know how to apply them and how to use them. You also have to know which period is right for you as a trader depending on your style.
Talk about style - the markets got style, but the economic calendar doesn't. The markets look at it and say: you got nothing! Did you see the 427k print in initial claims? Doesn't matter, does it? The markets went up another 1/2 percent today - that is almost 750 points in 8 days - not bad, especially when we should see a lousy to below expectations jobs report in 6 trading days.
So, what does this all mean? It means that writing protection this month could hurt. It also means that I had to do it - I had to buy protection. Ask me if I have a trading plan? Yes, and here it is: because the markets went too far too fast. How long did I buy the protection for? Which strike? Most of you can figure that one out, but I feel like my wallet would hate me if I didn't buy some protection.
I will give the weekly closing commentary tomorrow afternoon with a look ahead at next week's "busy" economic calendar. As I said last night in the webinar, nothing matters except the Fed's rhetoric and they didn't dissapoint.
Happy Trading and Be Environmentally Cool
Coach Brian
I am not posting any charts on this blog as we went through a bunch last night in the webinar (thanks to all who stuck through the initial audio problems) where we had perfect markets to introduce moving averages. You were able to see how moving averages suffer in rangebound markets, but not in THESE markets - the trend is your friend and you can use moving averages in the following ways:
**support or resistance
**when the price crosses the moving average it gives you a buy, sell, entry or exit indicator
**crossover - using the faster MA to cross the slower MA and signal an entry or exit.
These markets are continuing to be a moving average traders dream, but yo must know how to apply them and how to use them. You also have to know which period is right for you as a trader depending on your style.
Talk about style - the markets got style, but the economic calendar doesn't. The markets look at it and say: you got nothing! Did you see the 427k print in initial claims? Doesn't matter, does it? The markets went up another 1/2 percent today - that is almost 750 points in 8 days - not bad, especially when we should see a lousy to below expectations jobs report in 6 trading days.
So, what does this all mean? It means that writing protection this month could hurt. It also means that I had to do it - I had to buy protection. Ask me if I have a trading plan? Yes, and here it is: because the markets went too far too fast. How long did I buy the protection for? Which strike? Most of you can figure that one out, but I feel like my wallet would hate me if I didn't buy some protection.
I will give the weekly closing commentary tomorrow afternoon with a look ahead at next week's "busy" economic calendar. As I said last night in the webinar, nothing matters except the Fed's rhetoric and they didn't dissapoint.
Happy Trading and Be Environmentally Cool
Coach Brian
Wednesday, April 27, 2011
The Local's Take: Afternoon Commentary
Good Afternoon,
So in 7 trading days, we have done 5% in the DIA. I took a snapshot of the SPY, so you can see the upmove. Ben and the Fed did their thing and I will talk about it in depth in tonight's webinar.
We still get some employment data tomorrow with claims, but again, do they matter at this point. I think you have to look at the economic calendar "from a distance" as it may not matter until we hit 13000 in the DOW or we get further down the road with a few more quarters of data. So, as I said on Monday, buy and stay long equities and stay short the dollar and hedge very, very carefully in very, very select locations.
Other topics on tonight's webinar:
**moving averages!! - what a great time to use them
**your account size and your trade size
**fundamental (ha!) news and technical analysis
**and of course, inter-market relationships
So here is that chart of the SPY - notice the past 7 days:
Moving into the renewable energy sector, we have VLO, Valero and a recent update:
Valero Energy is using wind energy to power a refinery in Texas. The $150 million clean energy project will use 33 wind turbines to provide up to half of the energy needed. Did you know that energy PRODUCTION is the most water intensive of any uses for water out there? Agriculture is second. So every time you drive, you are using water and or course that other commodity, oil!
This is a great stock with a perfect price range for people starting out with options as the stock volume is immense and the option inerest is great, providing low spreads.
Moving to another producer, Whiting Petroleum, WLL:
Why do I have this up here? Because it has had a massive run and it looks like Whole Foods (WFMI) which I had on the blog the past few days. WFMI is double topping and I talked about generating income with covered calls. Can you do the same with WLL if you have it in your portfolio? By the way, the May 75's are giving 1.50 which is 2% in 23 days. Here is a chart of WFMI as a reference:
Before we move to forex, and this actually looks like a forex chart as it is trending and breaking out, trending and breaking out, we have the retail sector: RTH. Go to the mall, go to a bar, a restaurant and you will see people shopping, dining and drinking. The economy is robust:
Moving to forex, the BUFFALO BOUNCES didn't work today, but that is OK - a small price to pay for a massive run up in the equity portfolio:
Thank you Ben for giving me more fodder for tonight's moving average talk on the Interbank FX webinar.
Happy Trading and Be Environmentally Cool
Coach Brian
Tuesday, April 26, 2011
The Local's Take: Bullish Commentary
Good Afternoon,
Just for the record, since I have started this blog, I haven't had a "Bearish Commentary" when it comes to the broad markets and I am definitely not bearish now. I basically put an "all out buy" on the blog yesterday and the markets cooperated. As we will see, the SPY broke out today and is at a new bull market high.
Why was I so bullish? We have lots of data tomorrow with Durable Goods and the Fed. Look back at the markets and do some research to the few days leading up to a Fed announcement. We rally (hard) about 90% of the time. It seems that the markets are daring the Fed to NOT say EXTENDED. Basically, the closer it gets to an announcement, the more the markets rally as they are saying: "don't dissapoint us Ben!" because we will fall hard if you do anything but stay accomodative. So my expectation is: we will see the Fed say that:
**inflation isn't proven to be a consistent problem (go buy some milk!)
**rates will be low for an extended period.
If we don't get that message, look out below! In addition, we have public appearances by Ben as well as initial claims and GDP and then we are only a week away from the unemployment report. I estimate that we will add no more than 200k jobs.
To the markets we go and I want to show you that breakout in the SPY:
Moving into the forex markets and this is why I title my webinars (next one tomorrow evening) BACK TO BASICS because every currency pair is acting differently. We had a beautiful DOUBLE FALL LINE TRADE in the GBP/USD:
Look at what the EUR/USD did during the same timeframe:
Not too similar on a day trade, but overall the pattern is weak USD as shown in both charts on a daily timeframe (GBP/USD is on top and EUR/USD is on bottom)
The dollar smashing continues as equities leaked higher today. USD/CAD is around .9400.
Let's wrap up with our socially responsible investing plays starting with WFMI - I have been calling for protection due to a severe increase in price and the potential for double tops: covered calls at resistance anyone?
Cheap LED's anyone with the worldwide leader, CREE:
Not sure are you? This is a good example of a LAGGARD. The markets rally hard and this stock gets pummeled - this is where you know fundamentals are in charge and it can be dangerous to trade it to the long side, but you may want to invest in it as its yield may become more attractive.
Happy Trading and see you tomorrow night for the webinar,
Coach Brian
Just for the record, since I have started this blog, I haven't had a "Bearish Commentary" when it comes to the broad markets and I am definitely not bearish now. I basically put an "all out buy" on the blog yesterday and the markets cooperated. As we will see, the SPY broke out today and is at a new bull market high.
Why was I so bullish? We have lots of data tomorrow with Durable Goods and the Fed. Look back at the markets and do some research to the few days leading up to a Fed announcement. We rally (hard) about 90% of the time. It seems that the markets are daring the Fed to NOT say EXTENDED. Basically, the closer it gets to an announcement, the more the markets rally as they are saying: "don't dissapoint us Ben!" because we will fall hard if you do anything but stay accomodative. So my expectation is: we will see the Fed say that:
**inflation isn't proven to be a consistent problem (go buy some milk!)
**rates will be low for an extended period.
If we don't get that message, look out below! In addition, we have public appearances by Ben as well as initial claims and GDP and then we are only a week away from the unemployment report. I estimate that we will add no more than 200k jobs.
To the markets we go and I want to show you that breakout in the SPY:
Moving into the forex markets and this is why I title my webinars (next one tomorrow evening) BACK TO BASICS because every currency pair is acting differently. We had a beautiful DOUBLE FALL LINE TRADE in the GBP/USD:
Look at what the EUR/USD did during the same timeframe:
Not too similar on a day trade, but overall the pattern is weak USD as shown in both charts on a daily timeframe (GBP/USD is on top and EUR/USD is on bottom)
The dollar smashing continues as equities leaked higher today. USD/CAD is around .9400.
Let's wrap up with our socially responsible investing plays starting with WFMI - I have been calling for protection due to a severe increase in price and the potential for double tops: covered calls at resistance anyone?
Cheap LED's anyone with the worldwide leader, CREE:
Not sure are you? This is a good example of a LAGGARD. The markets rally hard and this stock gets pummeled - this is where you know fundamentals are in charge and it can be dangerous to trade it to the long side, but you may want to invest in it as its yield may become more attractive.
Happy Trading and see you tomorrow night for the webinar,
Coach Brian
Monday, April 25, 2011
The Local's Take: Holiday Commentary
Good Afternoon,
Easter is a huge holiday around the world - in Germany it is as big or bigger than Christmas and I always remember the 4 day weekend while trading Bunds, Bobls and Shatz in Chicago. I probably traded a few shots over those long weekends as well!
So if you are trading in the markets, you know that volume on Friday and today were well below normal, so I don't make anything of a 2.5 point pullback in the SPY. Remember, we have retraced over 80% of our 2007-2009 bear market move, so even if we pull back 500 points, we are still in a bull trend. How high will it go? Not sure, but I do expect higher highs before we consolidate or actually see a change in trend.
I tell all of my clients that depending on how long you are in the markets (what percentage you have long in equities, mutual funds, real estate, etc...) to look for high probability and low risk trading areas.
Before we get to that, let's talk about the BUSY economic calendar:
**Earnings
**Durable Goods
**FOMC
**Bernanke is speaking (bernankspeak)
**initial claims
**GDP
Moving into sectors, let's take a look at a stock in the volatile energy sector, CNX:
Has it already left the station? Pretty valid trendline as it has touched many points and has been in existence for quite a while. You have to be bullish the commodity sector...what a great sector into forex!
The dollar has been getting hammered for weeks on end, today it is pretty sideways to flat, but again, that is due to little participation as we have a bank holiday in many countries.
Hard to belive we are approaching May Day and then soon after that, summer vacation. Remember, we aren't as bright in America as our European counterparts. They actually use all of their alotted vacation time, whereas we don't.
So here we are, on our highs and we are about 4 to 5 weeks from summer vacation. I don't see the markets derailing any time soon and I don't see the Fed changing their stance anytime soon, so it is more of the same. Stay long and protect lightly when necessary depending on your exposure.
I took advantage of last week's incredible rally to write some light protection.
Happy Trading and Be Environmentally Cool
Coach Brian
Thursday, April 21, 2011
The Local's Take: Afternoon Commentary
Good Afternoon,
And the beat goes on! We have more "mediocre" economic news but higher equity prices. Surprised? You shouldn't be. This is to be expected in the "the fed is in charge" economy. Remember, they promised extended low rates at their last meeting, so even with higher initial claims and lower Philly Fed, fundamentals are just good enough and the Fed is still in the picture enough to get us to new highs in the Dow Jones.
If you missed my inter-relationship market webinar and want to catch up on a little trading psychology and fibonacci retracment introduction, please click here for the link. Wow! Now that I see that, I did cram a lot of information into my last webinar!
Whether it is a live class, a webinar or a market commentary post, I always start with the fundamentals. So here they are (notice the revisions to last week's unemployment claims number). I won't even go on the ramble about what these "misses" used to do to economic marktets, but with volatiliy at extreme lows, no matter how "off" a number comes in at, it isn't getting the markets excited. So as I said, the beat goes on. Let's look at volatilty and then the fundamentals.
On to the charts and let's start with forex and the absolute pounding of the dollar. The GBP has truly broken out against the USD, so here is a daily chart showing the breakout and then a 15 minute chart showing a BUFFALO BOUNCE and a DOUBLE FALL LINE TRADE that I was getting into and out of while talking to a fellow trader about trendlines in the EUR. We realize, hands off unless you have very specific entries and exits as the dollar doesn't want to do anything but go lower.
So there you have it, Breakout! The 6 pairs I keep an eye on are killing the dollar. Inflation anyone? Let's look at silver, hopefully you have already bought your Mother's Day presents!
Our socially responsible stock of the day gives a good look at good time to get defensive? Using the Fib's in conjuction with a potential double top gives you a low risk area to sell and/or buy protection.
Hopefully you are stocked up on your commodity plays as they have had a nice run this week.
Happy Trading and by all means, don't look at the economic calendar, just buy, buy, buy!
Coach Brian
And the beat goes on! We have more "mediocre" economic news but higher equity prices. Surprised? You shouldn't be. This is to be expected in the "the fed is in charge" economy. Remember, they promised extended low rates at their last meeting, so even with higher initial claims and lower Philly Fed, fundamentals are just good enough and the Fed is still in the picture enough to get us to new highs in the Dow Jones.
If you missed my inter-relationship market webinar and want to catch up on a little trading psychology and fibonacci retracment introduction, please click here for the link. Wow! Now that I see that, I did cram a lot of information into my last webinar!
Whether it is a live class, a webinar or a market commentary post, I always start with the fundamentals. So here they are (notice the revisions to last week's unemployment claims number). I won't even go on the ramble about what these "misses" used to do to economic marktets, but with volatiliy at extreme lows, no matter how "off" a number comes in at, it isn't getting the markets excited. So as I said, the beat goes on. Let's look at volatilty and then the fundamentals.
On to the charts and let's start with forex and the absolute pounding of the dollar. The GBP has truly broken out against the USD, so here is a daily chart showing the breakout and then a 15 minute chart showing a BUFFALO BOUNCE and a DOUBLE FALL LINE TRADE that I was getting into and out of while talking to a fellow trader about trendlines in the EUR. We realize, hands off unless you have very specific entries and exits as the dollar doesn't want to do anything but go lower.
So there you have it, Breakout! The 6 pairs I keep an eye on are killing the dollar. Inflation anyone? Let's look at silver, hopefully you have already bought your Mother's Day presents!
Our socially responsible stock of the day gives a good look at good time to get defensive? Using the Fib's in conjuction with a potential double top gives you a low risk area to sell and/or buy protection.
Hopefully you are stocked up on your commodity plays as they have had a nice run this week.
Happy Trading and by all means, don't look at the economic calendar, just buy, buy, buy!
Coach Brian
Monday, April 18, 2011
The Local's Take: Afternoon Commentary
Good Afternoon,
A client asked me where I see the next support levels. So I drew my Fibonacci's and looked at a moving average as a back up in order to provide some information.
With a light economic calendar and but a full earnings calendar, we were broadsided with a downgrade in credit from the US to Europe (which included Greece). We have known that credit spreads have been widening, so is this a really nice buying opportunity? Will equities shrug this off like they have shrugged off Egyp, Libya, Japan and countless credit downgrades across the world? Will earnings still be strong enough to keep us near new highs? I figured we could stay at or near these high levels and maybe even above for another quarter or two, but if unemployment started to rise again, then we may be derailed as the fall session started up. I am curious to see how low we go and how many "support" levels we break. This "big" support level is the post-Japan 1250 area, but below that, it starts to become a little more fuzzy.
Prior to getting there, we have the 61.8 level which coincides with the 100 period exponential moving average.
Certain stocks are giving us some interesting levels as well:
You can sell May 12's for .30, which is about 2.5% in less than a month and you would end up owning BAC close to its major support level of 11.00.
Ford is still sitting on a long term trendline, is it enough of a discount to get back in?
I think you just have to use stops if you are buying equities at these high levels, but overall I think the trend should continue as it isn't broken yet.
Moving further into the socially responsible area, we may have a trend that is finally broken. Whole Foods:
Do we finally have our lower high scenario in place and can yo become bearish versus bullish to neutral?
Moving to forex, it was a huge standard deviation trading day with many BUFFALO BOUNCES as we had massive moves. Dollar strength on the equity breakdown and then the trend came back to help us get a few DOUBLE FALL LINE TRADES.
Looking forward to seeing how we close and then what tomorrow brings. Got to run as the equities are rallying and the GBP may give us one more DOUBLE FALL LINE TRADE on the day.
We have entry...
Happy Trading and Be Environmentally Cool
Coach Brian
A client asked me where I see the next support levels. So I drew my Fibonacci's and looked at a moving average as a back up in order to provide some information.
With a light economic calendar and but a full earnings calendar, we were broadsided with a downgrade in credit from the US to Europe (which included Greece). We have known that credit spreads have been widening, so is this a really nice buying opportunity? Will equities shrug this off like they have shrugged off Egyp, Libya, Japan and countless credit downgrades across the world? Will earnings still be strong enough to keep us near new highs? I figured we could stay at or near these high levels and maybe even above for another quarter or two, but if unemployment started to rise again, then we may be derailed as the fall session started up. I am curious to see how low we go and how many "support" levels we break. This "big" support level is the post-Japan 1250 area, but below that, it starts to become a little more fuzzy.
Prior to getting there, we have the 61.8 level which coincides with the 100 period exponential moving average.
Certain stocks are giving us some interesting levels as well:
You can sell May 12's for .30, which is about 2.5% in less than a month and you would end up owning BAC close to its major support level of 11.00.
Ford is still sitting on a long term trendline, is it enough of a discount to get back in?
I think you just have to use stops if you are buying equities at these high levels, but overall I think the trend should continue as it isn't broken yet.
Moving further into the socially responsible area, we may have a trend that is finally broken. Whole Foods:
Do we finally have our lower high scenario in place and can yo become bearish versus bullish to neutral?
Moving to forex, it was a huge standard deviation trading day with many BUFFALO BOUNCES as we had massive moves. Dollar strength on the equity breakdown and then the trend came back to help us get a few DOUBLE FALL LINE TRADES.
Looking forward to seeing how we close and then what tomorrow brings. Got to run as the equities are rallying and the GBP may give us one more DOUBLE FALL LINE TRADE on the day.
We have entry...
Happy Trading and Be Environmentally Cool
Coach Brian
Thursday, April 14, 2011
The Local's Take: Afternoon Commentary
Good Afternoon,
I have posted a few charts regarding how the buyers are definitely in charge. This is just another day that proves this. Down 100 points and now down only 20 - we still have to see where we close, but I will post a chart of the past few weeks where we have some red days, but none of them have closed on their lows.
Before getting into the charts - and we have many to discuss, esepcially in forex, I want to provide you with the link to the webinar page where last night's free webinar will be posted shortly. If you haven't received it via dropbox, email me to get a link to the file.
Let's go to the fundamentals. The initial unemployment claims came in above the 400k and even more so above the expectations of 380k - makes sense that a measly 100 point drop (although some look at that as a huge drop) is now bought back up to where we are only down 20 points. As I mentioned, buyers are in charge! Even more interesting is the PPI number - the ex-food and energy component came in higher than expected but the headline number that includes food and energy came in below expectations. Wow - someone please make sense of that for me!
Regardless, as I mentioned in last night's webinar, we get the fundamental news, then absorb it and see what the markets are doing with that news on the technical side. As I mentioned, here is the SPY with buyers taking advantage of any dip:
As I told one of my clients, I am bearish to neutral, but with an understanding that the risk is to the upside as long as the fed is in play. Looking at the banking sector, we have JPM
Is the current retracement enough to be bullish on or would you look at the larger picture and wait for a price point closer to the low 40's. Again, the trend is your friend and the trend is up, but you still have to have a "what if" scenario in your trading plan in case the trade goes against you. If you are bullish, what strategy? Purchase calls? Sell cash secured puts? Bull puts? Again, have a trading plan that involves a chart based exit for a loss.
Moving to forex, we had so many DOUBLE FALL LINE trades as the equity market sold off and then began its rally, which meant dollar strength into doallar weakness. Remember, those inter-market relationships are in play at times and when they are, you need to take advantage of them.
Again, you can clearly see how the markets opened weak, the dollar opened strong, markets make their comeback and dollar loses its strength. Got to love those inter-market relationships.
Happy Trading and Be Environmentally Cool
Coach Brian
I have posted a few charts regarding how the buyers are definitely in charge. This is just another day that proves this. Down 100 points and now down only 20 - we still have to see where we close, but I will post a chart of the past few weeks where we have some red days, but none of them have closed on their lows.
Before getting into the charts - and we have many to discuss, esepcially in forex, I want to provide you with the link to the webinar page where last night's free webinar will be posted shortly. If you haven't received it via dropbox, email me to get a link to the file.
Let's go to the fundamentals. The initial unemployment claims came in above the 400k and even more so above the expectations of 380k - makes sense that a measly 100 point drop (although some look at that as a huge drop) is now bought back up to where we are only down 20 points. As I mentioned, buyers are in charge! Even more interesting is the PPI number - the ex-food and energy component came in higher than expected but the headline number that includes food and energy came in below expectations. Wow - someone please make sense of that for me!
Regardless, as I mentioned in last night's webinar, we get the fundamental news, then absorb it and see what the markets are doing with that news on the technical side. As I mentioned, here is the SPY with buyers taking advantage of any dip:
As I told one of my clients, I am bearish to neutral, but with an understanding that the risk is to the upside as long as the fed is in play. Looking at the banking sector, we have JPM
Is the current retracement enough to be bullish on or would you look at the larger picture and wait for a price point closer to the low 40's. Again, the trend is your friend and the trend is up, but you still have to have a "what if" scenario in your trading plan in case the trade goes against you. If you are bullish, what strategy? Purchase calls? Sell cash secured puts? Bull puts? Again, have a trading plan that involves a chart based exit for a loss.
Moving to forex, we had so many DOUBLE FALL LINE trades as the equity market sold off and then began its rally, which meant dollar strength into doallar weakness. Remember, those inter-market relationships are in play at times and when they are, you need to take advantage of them.
Again, you can clearly see how the markets opened weak, the dollar opened strong, markets make their comeback and dollar loses its strength. Got to love those inter-market relationships.
Happy Trading and Be Environmentally Cool
Coach Brian
Wednesday, April 13, 2011
Gold Commentary
Good Morning,
The bottom line is no one knows if the gold "bubble" will continue or if it will collapse. There are two key factors that will go a long way in helping us to decide whether one or the the other will happen.
The first is fuhdamentals. The biggest fundamental is the USD and the Federal Reserve's accomodative policy. As long as we don't raise interest rates and other countries do, the dollar will suffer and commodities, including gold should be more expensive. A harder fundamental to determine is supply, but I think that is a much longer term factor.
Shoter term, we can look to the facts. There are more buyers then sellers and that clearly drives the price higher. Gold continues to make higher highs and higher lows, which signals an uptrend. Until we have a technical change in that pattern, then the old adage sticks: the trend is your friend.
Furthermore, technical fundamental and technical analysis helps us to use the uptredn to our advantage and using the various financial markets provide opportunity. That is a major point. Traders focus on opportunity, not discussion.
How do we profit? One way would be to use leverage and buy the Australian dollar. Fundamentally, there lending rate is 4.75 compared to .25 in the US. Fundamentally, they export lots of gold. Technically, the USD is in a downtrend against the AUD.
How else can we use the Gold move to profit? We can sleep better at night by using GLD in the stock and option markets to hedge our holdings/business assets or go long the dollar to protect our downside risk in our gold holdings.
Either way, profit and protecting our profits is the name of the game, not "what will happen way down the road".
Finally, and just to put this out there, what happens if the rally in the economic markets fail. Will that cause deflation and/or stagflation? If that happens, the traders who know how to trade sideways to bearish markets will be having a ball as we won't be talking about supply/demand or anything else, just the failure of quantatative easing to help secure jobs and ultimately, growth.
Brian J KahnGood Morning,
The bottom line is no one knows if the gold "bubble" will continue or if it will collapse. There are two key factors that will go a long way in helping us to decide whether one or the the other will happen.
The first is fuhdamentals. The biggest fundamental is the USD and the Federal Reserve's accomodative policy. As long as we don't raise interest rates and other countries do, the dollar will suffer and commodities, including gold should be more expensive. A harder fundamental to determine is supply, but I think that is a much longer term factor.
Shoter term, we can look to the facts. There are more buyers then sellers and that clearly drives the price higher. Gold continues to make higher highs and higher lows, which signals an uptrend. Until we have a technical change in that pattern, then the old adage sticks: the trend is your friend.
Furthermore, technical fundamental and technical analysis helps us to use the uptredn to our advantage and using the various financial markets provide opportunity. That is a major point. Traders focus on opportunity, not discussion.
How do we profit? One way would be to use leverage and buy the Australian dollar. Fundamentally, there lending rate is 4.75 compared to .25 in the US. Fundamentally, they export lots of gold. Technically, the USD is in a downtrend against the AUD.
How else can we use the Gold move to profit? We can sleep better at night by using GLD in the stock and option markets to hedge our holdings/business assets or go long the dollar to protect our downside risk in our gold holdings.
Either way, profit and protecting our profits is the name of the game, not "what will happen way down the road".
Finally, and just to put this out there, what happens if the rally in the economic markets fail. Will that cause deflation and/or stagflation? If that happens, the traders who know how to trade sideways to bearish markets will be having a ball as we won't be talking about supply/demand or anything else, just the failure of quantatative easing to help secure jobs and ultimately, growth.
Brian J Kahn
The bottom line is no one knows if the gold "bubble" will continue or if it will collapse. There are two key factors that will go a long way in helping us to decide whether one or the the other will happen.
The first is fuhdamentals. The biggest fundamental is the USD and the Federal Reserve's accomodative policy. As long as we don't raise interest rates and other countries do, the dollar will suffer and commodities, including gold should be more expensive. A harder fundamental to determine is supply, but I think that is a much longer term factor.
Shoter term, we can look to the facts. There are more buyers then sellers and that clearly drives the price higher. Gold continues to make higher highs and higher lows, which signals an uptrend. Until we have a technical change in that pattern, then the old adage sticks: the trend is your friend.
Furthermore, technical fundamental and technical analysis helps us to use the uptredn to our advantage and using the various financial markets provide opportunity. That is a major point. Traders focus on opportunity, not discussion.
How do we profit? One way would be to use leverage and buy the Australian dollar. Fundamentally, there lending rate is 4.75 compared to .25 in the US. Fundamentally, they export lots of gold. Technically, the USD is in a downtrend against the AUD.
How else can we use the Gold move to profit? We can sleep better at night by using GLD in the stock and option markets to hedge our holdings/business assets or go long the dollar to protect our downside risk in our gold holdings.
Either way, profit and protecting our profits is the name of the game, not "what will happen way down the road".
Finally, and just to put this out there, what happens if the rally in the economic markets fail. Will that cause deflation and/or stagflation? If that happens, the traders who know how to trade sideways to bearish markets will be having a ball as we won't be talking about supply/demand or anything else, just the failure of quantatative easing to help secure jobs and ultimately, growth.
Brian J KahnGood Morning,
The bottom line is no one knows if the gold "bubble" will continue or if it will collapse. There are two key factors that will go a long way in helping us to decide whether one or the the other will happen.
The first is fuhdamentals. The biggest fundamental is the USD and the Federal Reserve's accomodative policy. As long as we don't raise interest rates and other countries do, the dollar will suffer and commodities, including gold should be more expensive. A harder fundamental to determine is supply, but I think that is a much longer term factor.
Shoter term, we can look to the facts. There are more buyers then sellers and that clearly drives the price higher. Gold continues to make higher highs and higher lows, which signals an uptrend. Until we have a technical change in that pattern, then the old adage sticks: the trend is your friend.
Furthermore, technical fundamental and technical analysis helps us to use the uptredn to our advantage and using the various financial markets provide opportunity. That is a major point. Traders focus on opportunity, not discussion.
How do we profit? One way would be to use leverage and buy the Australian dollar. Fundamentally, there lending rate is 4.75 compared to .25 in the US. Fundamentally, they export lots of gold. Technically, the USD is in a downtrend against the AUD.
How else can we use the Gold move to profit? We can sleep better at night by using GLD in the stock and option markets to hedge our holdings/business assets or go long the dollar to protect our downside risk in our gold holdings.
Either way, profit and protecting our profits is the name of the game, not "what will happen way down the road".
Finally, and just to put this out there, what happens if the rally in the economic markets fail. Will that cause deflation and/or stagflation? If that happens, the traders who know how to trade sideways to bearish markets will be having a ball as we won't be talking about supply/demand or anything else, just the failure of quantatative easing to help secure jobs and ultimately, growth.
Brian J Kahn
The Local's Take: Morning Commentary
Good Morning,
It has been a few days since I wrote an article - busy catching up from the Denver Expo/Conference where I spoke to business owners and individuals about "sleeping better at night" through hedging using technical and fundamental analysis.
I also discussed growth, through the options and forex markets. Finally,
I talked about income generation for people with stock ownership.
All of this was based on YOU as the "system". Understanding who you are and what you can achieve given your account size, time available to focus on the markets and risk tolerance.
While on the "you are the system" topic, here is the link for tonight's free webinar, starting time is 9pm Eastern.
Let's get to the markets. We had our first significant down day since March 16th. Again, we finished off the lows of the section and as you can see, so far, we are trading higher (a lot higher a few minutes ago), but now settling in. I have been asking for time decay and sideways markets and it was nice to finally have a down day thrown in. We were overdue, weren't we!
After two solid months of protection/hedging gains, I may back it off a little as I don't want to get greedy and there haven't been any signs that the fundamental news is backing off its steady increse in performance. Another good retail sales number (as I predicted after travelling and dining out this past weekend). The air traffic is busy and the restaurants and nightclubs are packed. Call it the "now generation". Maybe they are spending their future now, but regardless, they want it now!
When looking at SPY, you can see we are only at the 38.2% retracement mark, so as I get ready to look at April-May protection, I can clearly still say, the risk is to the upside.
Moving into the socially responsible realm: time to sell puts as we learned in the options class last evening? Why not get paid to get into the stock?
As we enter the forex realm, we have had a little pickup in action. The dollar is still getting wacked, but a little topping action in the EUR/USD gave us a BUFFALO BOUNCE yesterday:
So far, today's action is a little muted as retail sales came in line and overnight, the markets were fairly quiet. Crude is settling down a little and so the USD/CAD is pretty sideways:
See you tonight on the webinar.
Happy Trading
Coach Brian
It has been a few days since I wrote an article - busy catching up from the Denver Expo/Conference where I spoke to business owners and individuals about "sleeping better at night" through hedging using technical and fundamental analysis.
I also discussed growth, through the options and forex markets. Finally,
I talked about income generation for people with stock ownership.
All of this was based on YOU as the "system". Understanding who you are and what you can achieve given your account size, time available to focus on the markets and risk tolerance.
While on the "you are the system" topic, here is the link for tonight's free webinar, starting time is 9pm Eastern.
Let's get to the markets. We had our first significant down day since March 16th. Again, we finished off the lows of the section and as you can see, so far, we are trading higher (a lot higher a few minutes ago), but now settling in. I have been asking for time decay and sideways markets and it was nice to finally have a down day thrown in. We were overdue, weren't we!
After two solid months of protection/hedging gains, I may back it off a little as I don't want to get greedy and there haven't been any signs that the fundamental news is backing off its steady increse in performance. Another good retail sales number (as I predicted after travelling and dining out this past weekend). The air traffic is busy and the restaurants and nightclubs are packed. Call it the "now generation". Maybe they are spending their future now, but regardless, they want it now!
When looking at SPY, you can see we are only at the 38.2% retracement mark, so as I get ready to look at April-May protection, I can clearly still say, the risk is to the upside.
Moving into the socially responsible realm: time to sell puts as we learned in the options class last evening? Why not get paid to get into the stock?
As we enter the forex realm, we have had a little pickup in action. The dollar is still getting wacked, but a little topping action in the EUR/USD gave us a BUFFALO BOUNCE yesterday:
So far, today's action is a little muted as retail sales came in line and overnight, the markets were fairly quiet. Crude is settling down a little and so the USD/CAD is pretty sideways:
See you tonight on the webinar.
Happy Trading
Coach Brian
Saturday, April 9, 2011
The Local's Take: Afternoon Commentary
Good Afternoon,
This will be a quick post, touching on important topics as I am in Denver and I have conference attendees looking over my shoulder. I know that I am missing out on the snow in Park City and I have a busted ankle, so I can't enjoy it anyway. I have two more presentations today and one more tomorrow, speaking about hedging your businesses COGS. Appropriately, this article was a headline on Bloomberg today. Trucking companies, coffee shops, you as in individual are at risk. We are all long the economy (jobs, real estate, portfolio's, businesses, et...) and if our government has put us at risk due to an accomodative policy and inflation gets out of hand or on the flipside, we stagnage as spending comes to a halt, then we are all out of luck and understanding how to hedge is of key importance.
Let's take a quick look at SPY:
This is the chart over the last few days and most of you know I have been aksing for some tiime decay. Well, we got it for 5 days, but we still have 5 more to go and this chart has me worried. Why? Look at the closing price versus the low price. How many times did we go down this week, only to rally up. Today is another example. We are heading into the weekend with 48 hours of risk and the market was bought back up in the final minutes. Each day we closed off our lows.
The markets do not care (currently) about Japan and the state of things in Washington. They are bullish and they have a very strong underlying bid.
In the forex markets, it was a sideways day as equities stayed relatively rangebound, but looking at the longer term, trends are in place and gaining more force as other economies start to raise rates with talk about further raises soon. Nothing from the US other than the hint from Bernanke that we will "do something" if inflation proves not to be transitory. Maybe oil prices will be at 140/bbl before we raise interest rates.
Looking ahead, we have G7 meetings, earnings reports begin, unemployment claims, inflation data and retail sales. A very, very busy week!
Happy Trading and Be Environmentally Cool
Coach Brian
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