Bullish Equities In Charge

Good Morning,
It is dumping snow outside and it is definitely time to break out the powder skis. It has been a long wait as we haven't had snow in over 2 months - thankfully there are amazing snow makers and groomers out there!! Those amazing teams helped me to stay PATIENT and wait for the snow without complaint. We knew the snow would come and now is the time to ski it, so thank you groomers/snowmakers. Oh yeah, the disclaimer: I work as a Mountain Host at Deer Valley giving tours to our guests on the weekends and so if you are in the area, say hi to me on the mountain!

Why the snowy prelude? Well, I included a key word in there: PATIENCE. If a trader is to survive, patience is one of the most important characteristics that they must display.
These markets can try your patience, but you can't let them get to you. I posted similar thoughts on the IBFX Connect Site under "thelocalstake". If you are looking for intraday help, please follow me on that unique social site.
Why do they try your patience? Well, take for example today's range in the EUR/USD since American equities opened at GMT 13:30: 1.2884 on the low end and 1.2950 on the high end for a total of 65 pips. That isn't what we are used to. We are used to ranges of 150 pip and more, but more importantly, we are looking for trends, retracements, more trends, retracements, etc...
Right now we are seeing a trend and then sideways consolidation. The VIX is low (not pricing in much "movement", the equities are on a tear (no sellers in sight) and volume has been lower.
BUT, there are opporuntities. You just have to be a little more PATIENT as we wait for opportunities. As you know, I am an intraday trader but I also understand the larger fundamental drivers and how to read a chart with longer timeframes than my normal 5 and 15 minute charts. So, using PATIENCE, I am ADAPTING to lower volatility markets and looking for opportunities.
Here is the setup and I talked about this in previous posts: You know I love Fibonacci's (I basically can't wake up without thinking about Fibonacci's) and so as long as I understand how to use them, what is the difference if I use them for a 5 minute trade or a 3 day trade. Check out the EUR/USD as it got weaker and weaker and then hit the "line of death". I mentioned a week ago that if the equities hang in there and the relationship between the USD and equity prices comes back into play, maybe the EUR is oversold compared to the USD. We all know what equities are doing over the last week and here is what the EUR/USD did over the last week:

Past performance is not indicative of future results
The point here is, I have an understanding of the fundamental drivers, how to use technical analysis through a diverse toolbox and more importantly, PATIENCE to wait for what I think are overbought or oversold areas. The most important component is that I built a TRADING PLAN and patiently waited to execute it and then planned to manage it from beginning to end using "trade massaging/management". I do not execute anything and then walk away. I am constantly monitoring the drivers affecting market movement no matter if it is a 5 minute or a daily chart.
You know I always give a fundamental view: equity markets are on cruise control. Fundamentals are improving and until "new surprises" come, I am neutral to bullish the equity markets over the next quarter (but, as you know, that opinion could change in an instant).
Technically, until sellers come in, be very, very careful of over-protecting your account if you are hedging your equity investments/401k's/IRA's/pension plans/etc..  Soon though, I may think about getting ready to maybe "stand in the way" of the equity bull run with some portoflio protection strategies - but that depends on the next week or so of action.
No matter the reason for the trade, the length of the trade, the size of the trade, please develop a sound trading plan and manage it from beginning to end. It is essential in these markets to always put stops in place as the entry order is executed.

Happy Trading and Be Environmentally Cool
Coach Brian
Forex  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 Still Bullish

Good Evening,
The buyers are still in charge regarding SPX and as I write this, the sellers are in charge of the USD. So the all important USD and equity relationship is still in play. It has been coming and going, but when it is in play, it makes for a very nice trading oppportunity. Again, sometimes the relationship isn't in play and it takes a trader who is paying attention to market fundamentals and technicals to understand this, create a trading plan with correct risk to reward and be prepared to manage the trade and even take a loss if the trade doesn't work out.
My point here is there are no guarantees, but trading "edges" is what we are looking for and patience, discipline and trading plans allow us to enter the markets with confidence regardless of the outcome.
I don't think that there is a holy grail to do this for you. I think that having a knowledge of the inner workings of the markets and these all important "inter-market relationships" can make you a more successful trader and a more knowledgeable trader.
Fundamenally, as long as international events stay quiet, we should have markets testing upside resistance. Regarding data, we have our first look at manufacturing data (Philly Fed) and the usual slate of claims. We also have inflation data (if you have been living under a rock, the Fed has told us there is no inlfation and that even if there was, we created it and don't care about it). In addition, we have earnings data, so be on the lookout if you own stocks/use options to trade and protect your stock investments.
Technically, let's look at the SPX and some nearby trendlines:

Past performance is not indicative of future results
Next up, we have my most recent favorite equity market hedge, USO. Can you spot resistance?

Past performance is not indicative of future results
And as a result, you have the "inter-market relationship". If you can spot resistance in USO, you can spot support in the USD/CAD. If you think USO is overvalued, what does that mean for the CAD? It probably is too rich and the USD finds support:

Past performance is not indicative of future results
And now to the EUR/USD. Everyone loves to hate the EUR these days. Last week I mentioned that if the equity markets hang in, will EUR find some support. Well, check out the EUR/USD at the "line of death":

Past performance is not indicative of future results
And looking closer at it, look at the little double bottom it is making and it has been good for a small upmove if you have very specific entries using Fibonacci's, "inter-market relationships" and general market knowledge.

Past performance is not indicative of future results
This trade is a very good indicator of how a short term trader and a long term trader can use the same entry.
Let me explain:
1. if the short term trader thinks 76.4 will hold, they use that as support, put there stop below it and put their target 50-100 pips above (they are going against the downtrend, so they are happy with a very small gain (not that 50-100 pips is a small gain))
2. the long term trader may feel that the 76.4 is a longer term support. They risk the same amount of pips or just a bit more than the short term trader and put there target 100-300 pips higher.
Again, these are all "theories" and regardless of the trade duration, each trader needs to have the plan set in place before the entry and then set there stop price for a loss BEFORE (or at the same time) that the entry trade is made to buy the EUR/USD.
Folks, remember, the trend is your friend and the trend is down. If you take a trade like this, you are going against the trend, so first off, have reasonable expectations and secondly, be prepared for the trend to continue and exit at a reasonable, pre-set loss!
Free Webinar Tomorrow Evening - Click Here

Happy Trading and  Be Environmentally Cool
Coach Brian

Forex  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 Still Bid

Good Morning,
"Less Is More" is my attitude. Volatility is heading for the teens, the SPX is headed for 1300 and every time the equities drop, buyers come back in.
As you know, I preach a conservative approach and look to generate income off my holdings, profit from market volatility and protect my assets when needed.
I also preach that the markets tell us what to do. Right now, the markets are telling me to back off the protection and back off the aggressive growth trades. With the VIX heading towards the teens and the SPX rallying in the face of MANY adversities, it is pretty clear that standing in the way of the bull market in SPX can be quite deadly.
Yes, I am still protecting, albeit lightly. Yes, I am still generating income, but I am prepared to buy back that protection and roll it out on certain stocks and sectors as they break resistance, trendlines, moving averages, etc...
So what does it all come down to? It comes down to using fundamental and technical analysis to guide my decision making. I review this quite regularly, although a little less regularly right now as "less is more".
The one wild card? Earnings. The Fed told us growth will moderate. Will it happen this earnings period? No one knows. And that is the hard part. Do we put on collars now? Do we leave our at or in the money covered calls in place because earnings are going suffer and thus stock prices will suffer? I am not sure, thus I am playing things pretty close to the vest and not over protecting. My defensive size is appropriate for these markets and I am not trying to force the hand of a non-volatile (see VIX) market.
Bringing that over to the forex markets, if the VIX is down, that means volatility across the board is down (see yesterday's range in the forex markets). Today, we have a bit of an outside range day in GBP/USD and I am looking for a Buffalo Bounce if equities start to drop a little bit more. But as I said, equities are "bid" and that means when equities become oversold, the USD becomes overbought and as the USD weakens, a bid appears in the GBP, EUR, etc... I am seeing this on my charts as we speak. The markets rally from down 50 to positive and the USD weakens a bit. It isn't weakening significantly yet, so you still have to understand the niche market of the EUR versus the GBP, etc... Remember, the EUR is very, very different than the GBP given everything going on in Europe. So the bid in the equity markets today as we come off our lows affects the USD in the same general way, but with little nuances here and there depending on the cross currency. Hence, technical analysis. Is the GBP weaker than the EUR today when referring to the dollar? Yes, that seems to be the case. Maybe the EUR is finding some support in the 1.2650 area and if equities rally off some good earnings reports over the next few weeks and European news stays quiet, we get a bit of a rally in the "oversold" EUR.
Lots to focus on. Keep your trading size appropriate for your account and let the markets come to you and give you an entry that has the appropriate risk for your trading timeframe.
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 Can't Go Down

Good Morning,
Just a quick article to wrap up the week.
We have seen this before. If the markets can't go down and retrace the massive move up, then there is only one way to go and that is higher.  We have sold off 3 days in a row after going up 200 points on Tuesday and the buyers have stepped in and the sellers are getting knocked backwards.
Think about the analogy of the pits. If you put your hands up and out, you are a seller. If you are selling to enter an order, you need the markets to go down for your trade to be profitable. All of a sudden hands on the other side of the pit go up and they are bringing their hands towards their faces - buyers. More and more buyers step in and the sellers dry up and the markets rally. You can see this and feel this on Wednesday, Thursday and for the most part today (we will see where we close today).
In the forex markets, the dollar was strong early and then all of  a sudden, when equity markets went from down 60 points to up, the dollar weakened. It wasn't a terribly busy/volatile day today during the American equity session for intraday forex traders, but if you understood the previous days where equity buyers stepped in, then you could feel/see/prepare for the bottom to come in on the GBP, the EUR, the AUD and the NZD as they retraced some (or all) of their earlier weakness. The only pair that wasn't able to retrace at all was the USD/CAD, where the USD stayed strong all day. Overall oil prices (see yesterday's post for the inter-market relationship between oil prices and USD/CAD), are pretty flat. A weird thing I am seeing is gas at the pump under 3.00/gallon, yet oil prices are above 100.00. Oil prices should go higher on the jobs news and the potential for an increase in equity market prices as a result.
Overall, as long as the news stays quiet, neutral, somewhat bullish, the equity markets should hang in there and try to sneak a bit higher. I have a 60-90 day projection of low volatility, but after that, it is anyone's guess.
Stay tuned for changes to this "optimism" as international fundamentals and market technicals dictate.
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 Flat For The Year

Good Morning,

As of now, the SPX is basically flat for the year. Think about everything that the markets digested this year and how we have hung in there. Will there be more to digest in 2012? Absolutely. Will the markets take it in stride and rally higher? All indications are pointing that way. But if not, are you in a position to profit from it? Even if you are an investor, you MUST be in a position to profit from sideways or bear markets as your returns may not keep pace with inflationary pressures.

No I am not talking about inflation that the Fed looks at. I am looking at potential cuts in salary, maybe even layoffs and add in utilty rate increases, health benefit increases (employer benefit decreases), the potential for food price increases, etc...

I hope the markets do keep rallying and if so, then I may lag the benchmark by just a bit, but I will sleep better at night knowing that when the markets do go sideways or down (and the reality is that they will at some point), the benchmark will suffer versus those employing protection strategies and income generating strategies.

Basically, understanding technical analysis and how the financial markets inter-relate is key. Forex can provide a great day trading vehicle, but did you know it can also act as a hedge against your portfolio? Options are such a dirty word, but as my clients know, they are an unbelievable vehicle for three things:

1. income generationg in trading accounts, IRA's and 401k's

2. portfolio protection

3. allows smaller accounts to participate in stock market movement in order to grow the account size

4. allows you to get paid to purchase stocks at your fair value levels

So I ask you: "what type of returns do you want to receive this year"? Maybe your New Year's resolution is to understand what drives the markets and how to profit from them. Again, regardless of your investing timeframe, the markets will provide volatility and volatility provides opportunity.

These markets are providing returns you can't get anywhere else (see real estate bonds, etc...) Find what markets suits you best given your individual situation and Seize it!

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 at Resistance

Good Morning,
A quick post as I am finished trading for the day and wanted to get something out to my audience. Today's action is quite important as it provided intra-day opportunities and an opportunity to put on the monthly protection.
First off, here is a DOUBLE FALL LINE TRADE in the GBP/USD as we have small ranges, but significant retracements:

Past performance is not indicative of future results
I am trading very, very infrequently as it is late December and holiday markets. So far this week, there have been two trades that I would have entered. One today that I got and a BUFFALO BOUNCE on Tuesday that I missed due to being on an airplane. The point is, 4 days of trading and 2 trading opportunities. Do not overtrade. Ranges were small yesterday and small today. Unless equities roar one way or the other or some economic/international news causes us to really get moving, be careful in tight markets - your locations have to be perfect!

Next up, we have the SPY which rallied 5 points in 3 days and is at a trendline that has been providing resistance for 5+ months now. I think it is enough of a rally to hopefully get some time decay and let the Dec-Jan protection start to work:

Past performance is not indicative of future results
We have a lot of data coming out in a short timeframe over the next few weeks. I am not sure if it will matter or not, but as always, keep an eye on it.

Here is a link to an upcoming webinar I will be doing next week.
Here is the link to last week's year end/look ahead webinar.
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 Well Below Support/Resistance Line

Good Morning,


Looks like the 1260 area in the SPX was too much to overcome given Europe's lengthy solvency process. Underlying this, please, please look at the Economic Calendar - the US economy has been improving, is improving and seems to be improving at an even faster rate! Retail sales were good, job claims are amazing, manufacturing data is up. So, maybe, just maybe we will get the Santa Claus rally.

But as you know, I am defensive and I am always looking to protect my investments using option strategies and the forex markets. I will be looking to get defensive for the Dec-Jan period, it is just a matter of when and what percentage. Are you making money off of your investments. Do you know how? If you don't, you should be learning these strategies - especially if your investments aren't keeping pace with inflationary pressures. Jupiter Peak Financial specializes in "making up performance" in bullish, bearish and sideways markets.

Technically, we have SPX resistance at 1260ish and we have support at 1150 and then 1100. There are intermediate support levels using moving averages and Fibonacci's.

Speaking of Fibonacci's, I love the DOUBLE FALL LINE TRADE that occurs when equities trend, retrace and trend again. We had two of them, both on the EUR/USD:

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.

THE FED and SPX Below Resistance Line...

Good Afternoon,
Please help in dancing and praying for snow and supplying the "storm that saves Christmas". We could use some fresh powder in Utah and for that matter across the globe!!
The markets reacted negativel to the Fedspeak that came out about an hour and a half ago. For the first time in a long time, the markets reacted how they should to a weaker than expected Federal Reserve statement.
Two things of importance:
1. "unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate"
2. "extend the average maturity of its holdings"
So more stimulus and a very, very slow recovery in the US. The markets today were only about 650 points from there 2009-2011 bull run. The fed has been stimulating our economy (and other Central Banks stimulating their respective economies) for almost 3 full years. If the equity markets are going higher, it is because the "novelty" of stimulus hasn't warn off. I don't know if it has or not, but it seems to be losing its luster. The markets may go higher, but I sure am glad I know how to implement protection as I am more than willing to be "behind the eight ball" in a bull market and sleep very well at night if we go sideways or GASP...down. And when I say sideways and/'or GASP....down, I don't mean for a few days, I mean for years, more like a decade.
Technically, and not sure what "technically" means other than not trading in poor locations which basically is the difference between a profitable trader and a losing trader. Technically speaking, the 1250 line has been "congestion" and acting as support and resistance. We could be above it tomorrow, but seriously, the hurdles seem to be more real and even if we get above it, how high can we go? Looking at the charts, 1350 is a realistic multi-year high. To the downside, 1150 is a realistic "support" or maybe more like a "pause".
I am keeping my powder dry, trading small and infrequently (it is December) and constantly playing defense. I will look to buy certain sectors and stocks as we (if we) get technically and fundamentally oversold and I don't see "value" at current levels. Basically what I am saying is the range is big and I am patiently waiting for what I deem better locations.
Intraday, we did get one AUD/USD BUFFALO BOUNCE that failed and we basically got one in the GBP/USD and almost got one in the EUR/USD which looked really, really tasty!!
Inter-market relationships are in play: weak equities, strong USD. 3 days until options expiration and my money management is telling me to move stops to protect recent gains.
Looking forward to seeing you on the webinar tomorrow evening.
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 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 Back Below "Support"

Good Evening,
In a nutshell, the "bail/fail" trade never left and is more evident today then ever. Will Europe or won't Europe, that is the question. Behind the scenes, the US economy is firing on all cylinders, so if things go well across the pond, we could be off to the races and 1350 in SPX is next!
First off, let's look at today's forex trade, with three BUFFALO BOUNCES. The USD/CAD, AUD/USD and EUR/USD. Then the EUR/USD came back and provided some late day fireworks as it did its "bail" rally near the close of the day. It was clear to see that the USD was strongest against the USD/CAD and AUD/USD - so commodities were killed. Here is the AUD/USD followed by the USD/CAD:






In the equity markets, take a look at SPX - new highs are on "bail" away and heading back towards the 61.8 area is a real possibility with a "fail". I am looking for us to stay below 1250 for another 3 trading days - but it is anyone's guess!!



If you aren't using USO as a hedge, get on board. Check out SPX resistance at 1260-1265 and USO resistance at 40ish.



Whether it is shorting USO, buying puts or bear calls, all neutral to bearish strategies are working, BUT, as is the case with any strategy in any financial market, you MUST use technical analysis to create a trading plan and have defense (GO STEELERS) and a trading plan in place - see Dick Lebeau and the 2011 version of the Iron Curtain!
Link to next week's webinar

Happy Trading and Be Environmentally Cool
Coach Brian

SPX at Support/Resistance Line

Good Morning,
Fundamentally, we have very little news in the US this week. We await Europe on Thursday and Friday.

Technically, big moves in one direction followed by small retracements are followed by big moves in the original direction. Who is willing at these high levels? Buyers or sellers. If we think Europe is going to fail, we sell off. No one and I repeat no one is selling up here. We move up 5 to 8 percent and no one thinks we are overvalued. So, as it has been in the past, the risk is to the upside. 1250 in SPX is "support/resistance" but coordinated international events don't care about technicals, so use them with a grain of salt. More importantly, no matter what tool you use, trade appropriately for this type of "rumorville" trading.

Overall, this level doesn't excite me to take new longs or add new protection ahead of what seems to be a bullish event. If it turns out to be bearish, protection will help to buffer the downmove, but how much protection depends on your individual pessimistic/optimisic feelings and your level of conservatism or aggressiveness.

Intraday trading was fun today. Again, no trading opportunities last week due to international news every European session while I slept. Today we had moves and countermoves and saw two DOUBLE FALL LINE TRADES. The first is the EUR and the second is the GBP. The GBP trade combined with resistance to make a nice entry.

Past performance is not indicative of future results

Past performance is not indicative of future results
Click this Link to sign up for the year in review/look ahead webinar.

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 1250 Level

Good Morning,
I want to make sure that my readers know that I do post a little less frequently during the ski season. Deer Valley opened up with 17 runs on Saturday and the man made snow is cold, fast and holding an edge very well. Looks like cold temps are in the forecast for the next 5-10 days so snowmaking conditions will be perfect. If any of you are heading out here for the holidays, give me a heads up.
It has been about a week since I posted and obviously we know that equities are in the midst of another Central Bank driven rally. When will it stop? We won't know for at least another 5 trading days as Europe is set to meet again on Friday.
We know the US is growing (slowly) but growing and until that stops, I think that adds fuel to the fire. Technically, until we close above 1250 that is "resistance" and then after that it is the 1270 area, then 1300 and finally 1350. I still believe that 1350 is a multi-year high, but I could change my mind quickly if governments keep supporting the markets and economic data continues to improve. Overall, I am bullish around the pre-Thanksgiving 1150 level and bearish up here until we close higher (could be today).
USO has been a fun ETF to play defense with. It is heading back up to its resistance level of 40.00.
In the forex markets, all of the news has happened overnight during the European session and then basically flatlined during the USD session. The only day we had a major trend and then retracement was on Monda when equities gave back some of their gains. This week, I am looking for some more intraday excitement, but I am not holding my breath.
Wrapping up with trading psycyhology, the VIX isn't "really" in the 20's. It feels like it is in the 70's. How many times do you remember weekly moves of 5 to 10% in equity markets on a weekly basis. The only reason the ViX isn't truly showing the volatility out there is the markets are going up. This is very, very important as quantity is NOT as important as quality. Keep your trading size small because with this volatility you have the chance to have HUGE percentage winners and losers at a moments notice. We aren't trying to hit home runs, but they can happen and on the flipside, a counter-move to our thesis can happen at a moments notice as well.
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.

News in Charge

Good Afternoon,
Just like "Charles in Charge" (I know you remember the show), the News is in Charge. Today we "bail" so equities go up. Tomorrow we could "fail" so equities may go back down.
Fundamentally (and sorry for going over this, but I have to), we have a very busy week in the US, culminating on Friday with jobs. The jobs report, pegged at a 115k increase seems fair, but regardless of fair or not, does it really matter? I am just saying, keep an eye on the US economic data to see if it is still improving.
Fundamentally, the news is in charge and it causes me to have a very, very light conviction every single trading day. I just don't get too excited to enter the realm given leverage, the size of the moves and the fast pace that they are occurring out of nowhere. So, it all goes back to trading management - discipline, patience and correct trading size.
Technically, I am very interested in seeing what happens at the 1150 level. If that doesn't hold, I think we may be headed towards 1100. Until then, it doesn't matter and the strategy of selling puts I talked about last week would be looking good given today's equity rally. Still though, you have to be willing to buy back options you sell and take away the obligation of assignment if you see your technical levels break. Again, I stress the importance of a trading plan prior to hitting the "go" button. If the charts do this, you do this. If the charts do this, you do this. A trading plan is a flow plan.
To the SPX. We bounced off the "famous" 61.8 level and now let's see how far we can climb back up of the Fibonacci's I drew from top to bottom:

Past performance is not indicative of future results
Given how the dollar strengthened today, I am not sure who to believe, the dollar or equities. Will we see som decoupling? You always have to watch out for that, but for now, equities seem to be close enough to their lows, that the risk is to the downside.  Notice how the USD gained back almost all of its early morning losses against the GBP:

Past performance is not indicative of future results
Only 14 more trading days left until Dec options expire. I think that 1225 is the upside resistance point and I am happy with current equity protection in place until we breach that level.
Free IBFX Webinar on Wednesday afternoon - click here for link
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 USD - Mirror Images II

Happy Pre-Turkey Day.
First off, the early and late games tomorrow are going to be fun to watch. I will NOT sit through another New York Kennel Club Show on NBC with my wife (I say that every year...) And while on the subject of NBC, I think I think I have finally outgrown the Macy's Day Parade, maybe...
To the markets. Let's start with the longer term charts of SPX. All along, 1150 is my "level" based on two things. One, the Fibonacci Retracements and two, satisfying the head and shoulders (boy that was an ugly right shoulder). And again, since this is for education purposes only, my opinions can change at any time due to interantional news changing (seems like a very long time since we have heard something out of Europe). To the SPX and then right after, to the GBP/USD on the same timeframe:




Past performance is not indicative of future results

Past performance is not indicative of future results
Intraday, it makes sense that we sell off today ahead of the "long" weekend. It is classic bear market, don't go home the weekend long in equities. That being said, since I have been long the USD for so long, today, I was looking to actually sell the USD in specific locations. Those locations showed up, 2 BUFFALO BOUNCES (one in the EUR and one in the GBP) and then a double bottom in the GBP. Again, I always use limit orders to enter and I pre-set my stop loss and target and then move my stop accordingly as the trade goes in my favor.
Here are the charts from today's action. The second chart is the GBP/USD with the double bottom:

Past performance is not indicative of future results

Past performance is not indicative of future results
Opposite of the double bottom is the double top, shown here in the EUR/USD from Monday's trade:

Past performance is not indicative of future results
Now for a bit of trading psychology. These markets are tough, violent and volatile and you MUST have a trading plan for each and every trade. I made 4 trades this week in 3 trading days. Do NOT over-trade as you are probably forcing and trading without a plan.

Looking forward, I am thinking that equities are getting closer to fair value in some sectors. I am not saying I am bullish, I am just saying the downtrend has a chance to pause a bit and using options and time decay may provide good opportunities to pick up fairly valued sectors and stocks. Fundamentally, we have a very, very busy week next week with the culmination on Friday and the monthly jobs number.
These markets are providing great opportunities, but you must have patience to wait for the correct location and then discipline to execute the trade and mange it from beginning to end.
For a webinar on the above mentioned entry plus stop plus target, please visit this link.
To learn more about Fibonacci's, join me next Wednesday for a free IBFX webinar at this link.
Happy Trading, Happy Holiday's and Be Environmentally Cool. Eat a Tofurkey!!
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 in the Accumulation Area

Good Morning,
Today was a day you could buy the dips in the USD. Here is a great example of the GBP/USD satisfying a double bottom and at the same time, lining up with the first fibonacci retracement:

Past performance is not indicative of future results
With the poor news out of Italy, you could stay with the trend. You just have to be realistic about your profit targets because as we have seen before, the "V" can happen, where the GBP rallies all afternoon on a rumor. I am not sure we will get that today and I was confident taking a chance going with the trend at a "discounted price". Again, I had stops in place and traded the correct amount of contracts as we know there are no guarantees. Anything can happen at any time.
Let's see where the SPX closes today. My recent posts have talked about the 1240-1220 area being support. We are in that area as we speak. It will be interesting to see how we trade going into the long weekend.
To reiterate, I am still long the GBP/USD looking for the 1.57 handle, but as we know the GBP has been the "flight to quality" as the problems are centered in the Eurozone.  I also have the light hedge in place on the broad indexes and will leave that in place through the weekend given current levels.
Tonight I am hosting a free IBFX webinar and we will have lots to talk about. There are a lot of people signed up so bring your questions as the crowd can benefit from them! Here is the link:
https://www1.gotomeeting.com/register/717515353
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 Above the Line of Death

Good Afternoon,
Fundamentally, earnings, corporate issuance, international news, interest rate policies, and economic data has been positive. We get some more fundamental data tomorrow with the potential for international headlines (as always), but more specifically, Bernanke is speaking (not positive it will be market moving). Then on Thursday we have claims. That is the bulk of it for the week, so as I said yesterday, whent there is little economic data and no bad news out of Europe, we move up.
Technically, we were up yesterday and closed on our highs today. We are very, very close to the recent highest high of 1285ish.
Technically, there are fun patterns shaping up. First in forex, look at the ascending triangle in the GBP/USD:

Past performance is not indicative of future results
As you know, when equities move to the upside, the dollar moves to the downside. Which one is leading which? I am not sure, but if equities rally further, you would expect the dollar to lose this support line that it has been using.
Moving to equities, let's look at the SPX, which is above the "line of death".

Past performance is not indicative of future results
This means that the downmove has basically been totally retraced and all that is left are old highs. Will it be a tug of war at 1285 or will we go through it with ease. Either way, you would expect it to be tested/broken the way we have been moving as of late. If traders don't step in now, where will they become bearish again? Seems to be much higher than where we are at now, say 1300 and above. I am still sticking to my guns that by the time we do get to 1340/50, we will have exhausted ourselves and that could be a multi-year high.
Moving to one of my favorite sectors, commodities. We have USO. If it heads towards old resistance which matches up with 100+ per barrell of oil, I may choose to use that area to protect the portfolio.

Past performance is not indicative of future results
If you have been long this sector - which gave us a very fundamentally oversold situation a month back, you should be locking in profits or slowly taking some gains.
Free IBFX/JPF webinar tomorrow evening: https://www1.gotomeeting.com/register/717515353
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 Sitting on Accumulation Area

Good Morning,

Hard to believe we only have 9 more trading days until November expiration. 

Fundamentally, aside from the European news, we have a very light economic calendar in the US. Highlights will be Bernanke and claims. 

Technically, we are rangebound in SPX and the currency pairs. In currencies, it was a day to fade the moves as the overall trading ranges were small and we had an "inside day". There were two nice DOUBLE FALL LINE TRADES in the GBP/USD as the dollar got too strong when equities bottomed at down 50 and then the dollar got too weak as the equities rallied and ultimately topped out:

Past performance is not indicative of future results

Past performance is not indicative of future results

Moving into the broad equity markets, we have a longer term view of the upmove in SPX. Arew we conslidating sideways waiting for a burst to the upside (big move up followed by small retracement) or are we creating a head and shoulders?

Past performance is not indicative of future results

Here is the shorter term view with strong support in the 1220-1240 range. Hard to say what will get us to go below that as typically, data-less weeks have been bullish for equities.

Past performance is not indicative of future results

Webinar Wednesday evening: https://www1.gotomeeting.com/register/717515353

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.