As I mentioned in late November, once ski season hits, my posts become a little more infrequent. You can still follow my intraday updates that compliments my daily market commentary at IBFX's Connect Site.
I have a lot of charts to post, but before that a quick trading psychology lesson and a quick fundamental update.
Trading Psychology: Less is more. The VIX is down and there is a lot of uncertainty to start the year, so location, location, location of your trades as well as quality of trades versus quantity. Secondly, the equity markets "seem" to want to go higher (see lower VIX) and that is causing overall "trading opportunities" to be less frequent. As a day trader, I am prepared to trade a few times per week versus a few times per day. This has been my motto since September and has served me well.
Fundamental Update: the USD data is getting better and Europe is "fixed" for now. The equity markets "seem" to want to head to towards 1300 in SPX, causing volatility to stay low. The Fed did warn us that economic growth will be below its mandate (spurring continued central bank coordinated intervention efforts) which no doublt is lending a bid to the markets when they sell off. How much will the economic growth slow from its current what I think is a rapid pace of improvement is the real question.
In a nutshell, I am always protecting my assets, but I have to say, I am not overly protective at this juncture and I am definitely not a buyer/bullish at these levels. I am perfectly fine sitting on the sidelines and missing whatever percentage we move up as I am already involved, I am just not adding new longs at this time. These opinions could change tomorrow, so read on every day for these fundamental opinion updates.
Technically, we have a lot going on. The SPX got above the 200 simple moving average and above hte first trendline. It now has a second trendline as resistance, the 1280ish level, then 1300, then 1350. On the downside, until we break a signifcant percentage, I am not worried about support levels as I am not overweight long. 1200 at a minimum is where I may start having interest for new longs.
Past performance is not indicative of future results
USO has been a favorite of mine to protect equities. Check out resistance at 40.00. Seems to be working again, although as my clients know, this time, I chose to let it go as I don't feel overly eager to jump into short positions/protection at this time. The portfolio is already protected and I just don't feel that adding additional protection is needed right now. Again, this could change tomorrow.
Past performance is not indicative of future results
USO provides a perfect segway into forex. Check out the resistance in USO and line that up with support in the USD/CAD. Remember folks, I preach inter-market relationships. They are working - use them!
Past performance is not indicative of future results
Moving into the intraday trades, we had a BUFFALO BOUNCE yesterday morning in the EUR/USD:
Past performance is not indicative of future results
Now let's take a longer term look at the EUR/uSD. Look at the downtrend as it breaks new support. Either you are short or flat. Buying this thing is a no-no!
Past performance is not indicative of future results
That being said, I may be looking at some support levels soon if the equity markets hang in and take out there highs. This may cause a bounce in the EUR/USD. It could be a dead cat bounce, so I am very understanding of the overall price pressures and trend that is in place.
Past performance is not indicative of future results
Enjoy unemployment (aka unenjoyment) tomorrow.
I will post 2 new links to IBFX webinars in the next few trading days.
Happy Trading and Be Environmentally Cool
Coach Brian
Forex trading is one of the riskiest forms of investment available in the financial markets and suitable for sophisticated individuals and institutions. The possibility exists that you could sustain a substantial loss of funds and therefore you should not invest money that you cannot afford to lose.
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