SPX Back Above Support/Resistance Line

Good Afternoon,
Does your head hurt? It was a very, very active day of trading in forex, but at the end of it, the SPX is back above our crucial congestion line of 1250. With the good news coming out of Europe and the continued improving US economy, I think the chances of us heading higher are very good.
Next week is relativel light on the data front and usually that is bullish for the markets as we slowly grind higher. In addition, it is options expiration week, so that is usually bullish for equities as well. If you are protecting options using equities, be wary as it is options expiration week.
Overall, even though it was active trading today intraday in forex, you have to be cautious because it is December. Investment banks are handing out bonuses and Christmas parties/vacations are starting and overall traders are very tired after trying to read the markets this year.
So trade carefully and in addition to December, we have the "rumorville trade" continuing, so you have to be double secret extra extra cautious.
Technically, we were sooo weak in commodities today and then, sooo strong. Look at the AUD/USD on a 2 day chart:

Past performance is not indicative of future results

We had a BUFFALO BOUNCE on the AUD/USD today and then another double top area late in the day. A DOUBLE FALL LINE TRADE early In the EUR/USD and then a second DOUBLE FALL LINE TRADE as the USD became too strong:

Past performance is not indicative of future results

Double or triple bottom in the GBP/USD when the dollar was too strong and equities kept their bid:

Past performance is not indicative of future results

Nothing to post in the equities other than, look out above based on technicals and the possibility of a Santa Claus rally???!!
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.

SPX and the USD - Mirror Images!

Good Evening,
I haven't posted in over a week as I actually enjoyed my vacation versus trying to work through it. The South Florida temps were just too good to pass up and now that I am back in the mountains, with temps in the teens and snow in the forecast, I am glad I took full advantage of my time down there.
I also was at ease because I went away with light protection on the long portfolio using SPY and the USD. Both trades worked out and the risk management part of the portfolio picked up some nice performance in the Oct-Nov period. I did do some light trading on vacation and we can begin looking at charts with this one. This was a quasi trade/hedge as I love when commodities get out of wack and run up too much given the demand for them. Here you have USO reaching old resistance near 40 and turning around for a 50% gain in the bearish put play. Knowing that there aren't any guarantees, I risked about 20% on the swing trade/hedge. Again, for the most part, I am very happy taking  a trade that seems to be too rich given this very, very sideways equity environment over the past few weeks. More on that as we get into the similarities between the broader equity indices and the USD.


Past performance is not indicative of future results
Staying with the short term trading theme, here are the myriad of DOUBLE FALL LINE TRADES that occurred today as the equities opened up an then retraced off their highs, bringing strength in the USD with it:
EUR/USD:

Past performance is not indicative of future results
AUD/USD:

Past performance is not indicative of future results
OK, so I am a bit off track with the shorter term trades being discussed prior to the big, macro fundamental picture. So here it is:
**USD fundamentals getting better - claims, retail sales, manufacturing
**Earnings - companies are making money and a lot are still fairly valued****
****Obviously the international picture can put a wrench in the "farily valued" description
Other than looking at the facts (economic data), guessing what will happen internationally and with governments stepping in at their will, it just is a really, really nerve wracking environment that makes me take caution when entering the markets. ESPECIALLY given our entrance into the HOLIDAY period. Lighter volumes, ligher levlels of conviction can mean very thin, big, unforseen moves. The bias is still to the upside fundamentally and tecnically.

Segway into technicals:
We are still within reach of the highs and governments and corporate buybacks are feeding the bidding of the lows. What I mean by that is any time we seem to get momentum to the downside, technically, the buyers see good levels and scoop things up. Until that disappears, buyers are in charge.

Let's move the charts. Check out the daily view of the GBP/USD. This was my hedge  - staying long the USD through Greece and Italy and it really made for a relaxing vacation as the USD picked up about 4 pennies:

Past performance is not indicative of future results
Now look at the SPX over a similar time frame - mirror images - hence the INTER-MARKET RELATIONSHIPS that are crucial to providing trading edges. If you have an edge, use it until it goes away then look for another!!

Past performance is not indicative of future results
So the HUGE rally in October in the GBP and USD is starting to be retraced. Moreso in the GBP as the whole European "bail/fail" play takes shape. Looking at the SPX, you can see, we are still well within striking distance of old highs at 1300ish.
Looking to next week, I will approach it cautiously as I mentioned. Lots of economic data, but I don't think that that can move the markets much as larger forces are at play.
I will be sure to update you throughout the day through the IBFX Connect page with the tag of

"thelocalstake".
Also, take note of the new time for the webinar on 11/30 on Fibonacci's: https://www1.gotomeeting.com/register/305170576
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.

SPX Moving Into Really Overbought Territory?

Good Afternoon,
Fundamentally, earnings begin and we have claims as well as retail sales later in the week.

Technically, we still have quite the range in SPX and I think that before we get to the tops at 1220, we may see some selling come in at the 1200 range - but a lot of that depends on the Europe "Bail/Fail Trade". Bail we go up, fail we go down.


Past performance is not indicative of future results
Next up, we have the forex charts. Was the selling of the dollar last Friday a hint that we were going to explode up today? There were two opportunities for BUFFALO BOUNCES today. One in the NZD/USD and a second in the EUR/USD, but because of the relentless action to the upside in equities, the dollar stayed weak.

Past performance is not indicative of future results

Past performance is not indicative of future results
I really am enjoying the markets rallying, but could now use a little sideways action for the remainder of the week. With 9 trading days until option expiration, getting through to Monday at these levels would provide some nice time decay!
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.

SPX Range Continues - Support Holds! (For Now)

Good Morning,
Support is holding in the SPY. Before we get to the technicals, a quick review of the fundamentals.  Retail sales were flat and PPI (of non-importance due to Federal Reserve policy) was flat. Tomorrow, we get initial claims. I am expecting it to be flat as well. If the previous relationship holds, then flat economic data is positive for the equity market.

Technically, we still have some room to go to the upside, but I am not convinced that flat economic data is good enough to get us there.

To the charts we go. Support is working for SPX as we continue to bounce off a now more critical 1140 level:

Past performance is not indicative of future results
Speaking of SUPPORT, check out XLF and F:

Past performance is not indicative of future results

Past performance is not indicative of future results
Moving to the opposite of support, is AMZN doing its pre Christmas run? Yep, I said it, Christmas - we are about 100 days out.

Past performance is not indicative of future results
Check out AMZN on a 3 year and what it does in the Aug-Dec period. Are things good enough for it to surge more than the recent 20% move up and get through the 220 area? Percentage wise, the past moves signal it can do almost 100% in this same time frame. The 220 are should be interesting. Oh yeah, this time of year, you always want to know when earnings are - I think they are in mid-October.

Past performance is not indicative of future results
Moving to forex, we had a lot of intra-day equity volatility which moved forex nicely today (the equity/USD relationship is back in play) and if it weren't for my "too picky" locations, I would have been 2 for 2, but I decided to give it a little more room and just missed a few DOUBLE FALL LINE TRADES. First up the GBP/USD and then the EUR/USD

Past performance is not indicative of future results

Past performance is not indicative of future results
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.

SPY is Rangebound! (And Strong(er) Dollar

Good Morning,
From the sky is falling to everything is fine. We are bouncing back and forth in one big range in the broad markets, support is holding in most stocks and sectors and the dollar is all over the place. Makes for very, very astute trading and knowing when not to trade is just as important.
So money management, trade risk and realistic expectations with an emotional attatchment are key.
Rubber band action in the SPY (otherwise known as support and resistance):


Past performance is not indicative of future results
For all of you that thought GLD was going through, yesterday was clearly a sign that 1900 is providing resistance as we trade up there, but then sold off heavily as equities held in and then with the continuation of the equity rally today, GLD had no reason to stay bid:


Past performance is not indicative of future results
Remember, with news happening almost every night and markets gapping up or down on a daily basis (and doing it in triple digit moves), there is opportunity to protect your positions, whether they are GLD or equities.
Moving to forex, I mentioned that the dollar is all over the place. It is weak agains the AUD and the NZD, but strong against all other pairs today. What does that mean when the GBP and EUR can't get off yesterday's lows. The last time we had equities rally hard and the dollar stay strong, equities got punished the very next day. (They were up at the 123 level). Maybe we need to get to the top of the rangebound area we are playing in before sellers come back in. Maybe the GBP and EUR need another day of convining by the equity rally to begin their push off of support.


Past performance is not indicative of future results


Past performance is not indicative of future results
Free Webinar this evening at 9:30pm Eastern.
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.

The Local's Take: SPY Technicals and Dollar Divergence

Good Morning,
First of all, I would like to thank the Park City Trading/Investing Club attendees for being so prepared and providing great content to discuss. As you know I always lead in with fundamentals, so here we go.
Consumer confidence -  a total bummer and also a toally lagging indicator. It follows the stock market - so the stock market was down and everyone said "woe is me!". If the stock market is higher when we have our next survey period, it will be higher. So the number caused the stock market to break, but technically, we have a much different picture now as we are making new highs as we speak. We also have soooo much data to look at over the next few days that worrying about consumer confidence a month from now isn't high on the list.



Technically, let's look at the SPY, first on a 1 minute and then on a longer term chart. A severe rally on the intraday chart and new highs on the longer term chart. We are busting above the neckline of the double bottom. Are there shorts out there that are about to get stuck in a short rally and puke and cause us to head towards 125-130?

Past performance is not indicative of future results



Past performance is not indicative of future results
Moving into everyone's favorite commodiay, GLD has some resistance as well. As we talked about last night in the club, is this a place that is calling out: I am up here so you can play defense!!

Past performance is not indicative of future results
Moving into forex, I had a nice position on last evening into this morning as I really was intrigued by yesterday's dollar strength. Let's think about this, dollar strength and the marke rallies 200+ points - that is very RARE!. Who is wrong? The dollar or equities. Well, it was equities (albeit briefly) and we saw the dollar strengthen. You know I love those Fibs so here is that all to famous DOUBLE FALL LINE TRADE!

Past performance is not indicative of future results
Final thought: will the equity rally hold if CHIPM and ISM fall below 50, signaling contraction?
Final Thought 2: U of U Classes start in 4 weeks - here is the link to sign up
Happy Trading and Be Environmentally Cool (link to Park City's Low Carbon Diet program)
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.