The Local's Take: Morning Commentary

Good Morning,
This is your typical bull market summer day. Volatility is in the mid teen's, no economic data and the bulls are still clearly in charge. It defenitely isn't a good sign for the bears if our down day after 500 points of going up is around 10 pionts. 

I could definitely use some soft economic data and a few down days, but not srue there is a reltionship between poor economic data and down days.

We have weekly claims staying well above the 400k mark, meaning little to no job growth (again), but this time, the forecast of 85k jobs scares me. Why? Because we could see a 100-150 print which will look GREAT! compared to the estimates, but overall, very, very paltry and unmeaningful in the long run.
So with the massive run up in equities last week, are we seeing some sectors get top heavy?
I am focusing on percentages gained and USO may be ripe for a bear call after we caught in on the long side by selling puts and now I want to see if the rubber band has stretched too far to the upside. Look at this 10% move:




Past performance is not indicative of future results
In the forex markets, the dollar is a bit stronger against most currencies, but overall, it is an "inside day" with very quiet ranges during the American session. Again, the first paragraph mentioned quiet markets, so trader discipline is key. Are you going to bang away today or in a few days when we have unemployment data and the opportunity (no guarantees) for larger trading ranges.
Happy Trading and Be Environmentally Cool!



Online currency 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: Afternoon Commentary

Good Afternoon,
How time flies when you are having fun! I can't believe I have to leave to run the Park City Trading and Investment Club as I feel like it is noon. I guess that is what acitve markets do to you. I felt like I was back in Chicago, where you don't even blink, try to take in all of the action and all of a sudden it is around 1pm and the bond markets are closing.
Short futures from yesterday morning and DOUBLE FALL LINE TRADES today in the EUR/USD as finally, the ISM number moved the markets.
BUT, the song remains the same. The markets closed well off the lows of the day. It almost feels like we are guaranteed to go up tomorrow as 3 down days in a row is like the world just fell apart! HA!  I am probably going to stay a little short going into the unemployment number, but have definitely lowered my stops.
Let's look at today's action. We had a below expectations ADP report, but that is worth about 5 seconds of my time as they are very inconsistent and not a government release. The we had the headline ISM number, 10% below expectations. The sub-components:
**new orders - a hair below expectations - no biggy
**employment - a few points below expectations - noteworthy ahead of Friday's report
**prices paid - elevated - DUH!
So the markets were flat at the time and the EUR/USD was at its high of the day and then the markets started tanking and those famous inter-market relationships took off: equity weakness, dollar strength. Here is the chart that shows a nice retracement and a DOUBLE FALL LINE TRADE:

Let's hope for more volatility tomorrow. So far this 3 day downmove has created some breathing room for the light protection provided by the bear calls, but as I said, even if we get poor economic data, the markets may be very well "oversold". (That's is sarcastic, but true).
See you all shortly for the Trading Club
Happy Trading and Be Environmentally Cool
Coach Brian

The Local's Take: Mid-Day Commentary

Good Morning,

Today's post can be found at:

WWW.FINANCEBANTER.COM

The Local's Take: Real Trade Update

Got them - AUD/USD and EUR/USD
DOUBLE FALL LINE TRADES

Risked 1 to make 1 - high probability trades going with the trend up in the dollar, going against the short term trend down in the dollar

The Local's Take: Trade Update

Missed by a pip in multiple pairs - DOUBLE FALL LINE TRADES everywhere as equities turn positive

The Local's Take: Mid-Day Commentary

Good Morning,

Don't get your panties in a wad. We are only down 3% off our highs. Yes, certain sectors (commodities) are lagging, but we knew this already from our sector breakdown.

Many commodity stocks showed signs of failure weeks ago and once the top was set, they came off very hard.

Is it time to buy dips? I am not sure. If you have protection on, I don't think so as we still have unemployment coming up in 48 hours. The risk is always to the downside, so I would wait for another leg down before selling puts/buying conservatively.

When I say buying conservatively, I am not looking for new highs. More like a swing trade to profit quickly from an oversold situation.

Obviously the down move in equities and the upmove in the dollar happened, for the most part, overnight. Teargas and rioting in the streets of Greece happened well before we woke up and our stock market/options market opened up.

I don't trade forex overnight as I like to be up during daylight and fortunately, there is enough movement during the US equity session (for about 9 months there wasn't but it looks like it is going to change...keep your fingers crossed that volatility stays at or above our current levels!!)

We did get some DOUBLE FALL LINE TRADES in certain cross pairs, but I wasn't willing to take it as I was waiting for the intraday (cough, cough) rally in equities to stall out a little bit higher then where it did.

Is a long term top in? 50/50 for me. But I will sell rallies at certain levels to protect the positions. It will take another 5-8% down in the sectors that are leading us to the downside to get me excited to buy.

No charts today as we are in the same exact place we closed yesterday (with a hanging tail). I will update them tomorrow as I will have a little more time to be in front of the markets.

I am off to the Utah Genius (yes, I just associated genius with me and this blog) to be presented with an award for top companies in Utah and there trademark work. This means that Locals Have More Fun has protected its various shirt designs and sayings and more importantly, sent lots of money to the government.

If anyone has questions on trademarking, I went to law school (Ray, Quinney, Nebeker) and learned the process well enough to be dangerous whereas Locals now protects its identity via management, not outsourcing.

Doug Fabrizio of NPR fame will be the keynote speaker and our favorite environmentalist, the GUV will be there as well.

Have a great day and remember, everyday is earth day. (Yes, that is me digging rainwater collection systems in the backyard)

The Local's Take: Trade Update

Good Afternoon,

Why did the GBP come off its lows so hard with equities still on their lows?

Regardless, it provided a great DOUBLE FALL LINE TRADE.

That's it for today - have a great one!

The Local's Take: Trade Update

Good Morning,

One note that I forgot to make - if SPX closes below 1180, we won't see new highs for a while.

The Local's Take: Mid-Day Commentary

Good Morning,

OK - I am going to call the close: we will NOT finish on our highs. BUT, I am leaving myself an out. If we do, we will NOT finish green tomorrow (2 days in a row). I believe there are enough sellers to drive us sideways for a little in this current range in the SPX


Regarding the forex markets, I am confused: the markets are up, oil is flat to up, yet the dollar is strong against the CAD. I wasn't confused enough to not take advantage of a DOUBLE FALL LINE TRADE:

Let me explain a little more of the confusion. Again, equities up, GBP absolutely sideways to down, the EUR is getting "crushoolad" and the AUD and NZD are sideways.

Hence, another day with volatility down and tight trading ranges and "separation" in "OLD FAITHFUL" - equities up, dollar down.

I am sorry I didn't take pictures, but it was an "epic" (not really - I personally think the word is overused, so I throw it in sarcastically) day of touring Deer Valley and Park City. Parking at Empire Canyon lodge and skinning up Supreme. Then crossing over to McConkey's and down to Comstock. A few runs on the south facing aspect before heading back in the DMZ and into Lady Morgan.

3.5 hours of heart pounding work to ski 5 runs. Not bad. I think I ate 5 pounds of pasta to prepare and to refuel afterwards.

Off to get some vaccinations for the little one. Good to start the month off green.

Locals tip: will review Park City Follies tomorrow.

The Local's Take: Mid-Day Commentary

Good Morning,

As I mentioned, the line of death, holding for the weekend which gives me 3 days of time decay for all options sold.

Right to the chars. We will go with forex first as I just shut down my platform. A partial fill to end the week on a BUFFALO BOUNCE on the USD/CAD.

A nice way to finish the week - green every day. Let's hope next week provides the same intraday moves.

Next, a nice pattern on USO which has been trading in a nice range as commodities seem to be the most volatile in this very "unvolatile" equity market. 42 has been significant resistance.

The overall markets - as I said, 78.6% is the line of death and after 2 strong days, we were up a third (very similar to last Mon, Tue, Wed and then a selloff) but can't make it 4 days in a row at these elevated levels. Will we rally today? I don't think so but won't be shocked if we do!!!

Finally, for my good friend, we have AXP which has been moving. A breakout, selloff below the breakout line by about 3% (which probably exits a day and swing trader) and then a rally above.

This pattern basically sums up the markets - headfakes up and down, yet we end up in exactly the same place. I think individual stocks are harder than the overall markets. If you can find the ranges in the overall markets (SPY topping at 123) you are better off.

Play the ranges until we get a breakout to the upside or a sell rallies in very specific locations.

On another note - I will be teaching 2 upcoming classes at the U of U:
Intro to Personal Trading/Investing - covers stocks, options and forex
Fibonacci Course

Looking forward to my first backcountry ski tour of the year on Sunday. I figure it is part of my summer time training. By the way, if you want to get in shape for summer time, try the Computrainer classes at Team 19 in the Canyons Villages. If you compete and aren't ready, shame on you. If you focus on your ride, well done. I will be at the Wednesday night rides, which are almost sold out, so call if interested!

Have a great weekend and unemployment (unenjoyment) returns on Friday (along with both ISM numbers, claims and Bernanke)

The Local's Take: Mid-Day Commentary

Good Afternoon,

The snow arrived and as did the wind. Playing soccer in the fieldhouse last evening with the PC men's team was quite eery. The rafters and vents were shaking and every once in a while, you would hear a low humming. It almost sounded like whales.

Well, the whales (bears) found a reason to pick up the trading volume yesterday. Here is a short term chart of the SPY. Notice the volume on the downdays. We need to close at or below 119.30 to stay below the neckline of the double top.

Most every sector is showing "chinks in the armor" as we have come off highs by significant percentages.

No, I am not a buyer at these levels and would look to sell rallies. Just like the forex markets allowed for this morning. Lots of DOUBLE FALL LINE TRADES such as this one in the USD/CAD:

One trade, one winner. Now FOMC awaits. Will it be a dud, or will they change the language. We know they won't change rates, so look at the language.

Have a Mid February day during mud season and be environmentally cool with Locals Have More Fun apparel.

The Local's Take: Mid-Day Commentary

Good Morning,

Not sure if the markets are trading today:) but I do know that they can get slower than this.
Yes, the VIX can head even lower and the summer doldrums for traders can take root.

So, if you say: "I can't believe how bad it is", just remember, it can get worse.

Good durables and home sales today keeps us in the green, although barely. Not much to do today - did get into a DOUBLE FALL LINE trade in the GPB/USD that didn't work out.

Oh well, the flow chart of money management caused me to trade small so, was able to get into another in the NZD/USD and ended green on the day.

Seems like new highs in all 4 broad indexes are only a trading day way.

Earnings next week along with Bernanke, FOMC, claims, and GDP. FOMC should be a dud, but watch claims to see if they keep an average closer to 500k (not good!)

It's the weekend - enjoy!!

The Local's Take: Mid-Day Commentary

Good Afternoon,

Looks like most of the action happened overnight in the forex markets and equity markets.

Futures opened down and that is where the market has stayed, bouncing near its lows of the day.

News events: claims stayed in the 450k range for the week, giving us very little chance at job creation in next month's unemployment report. If these start to head towards a 500k average, then a top may very well be in place in the equity markets.

Here is a look at SPX and Friday's selloff, the climb back early this week and then today's selloff. Seems like we have a pretty good chance of working a little lower, but the bulls are still in control.



Let's see if we finally do get a Friday selloff where traders don't want to hold longs over the weekend.

Have a great day!

The Local's Take: Late-Day Commentary

Good afternoon,

Now that ski season is officially over for me, it is time to get out on the trails - running and biking.
Already made it to Zion and planning the next camping trip (hopefully sooner than later).

It is snowing though and that kept me at the computer, looking for double fall line trades and buffalo bounces. Some worked, some didn't, so another grind of a day at the office. Typical of a bull market where the daily grind is like pulling teeth. Sometimes it becomes very frustrating.

As long as you properly size your positions and you use a trading plan (defined risk and reward), you live to fight another day.

The markets were down 50 today and are now up 23 - pretty big move percentage wise, but not helping our volatility friend - the VIX.

One fun trade that has had some decent movement is USO - check out the range. As long as stocks keep plugging higher, so will commodities, which weakens the dollar and thus, oil prices continue to rally.

That is pretty much it for the day. Other than that, for all of you naysayers, check out the Retail Sector ETF - RTH. Quite the run. Will it hold up entering earnings season? By the looks of Moab, Zion and the highway last weekend, I say it will. People are spending!

Be Environmentally Cool with Locals Have More Fun apparel

The Local's Take: Mid-Day Update

Good Morning Traders and Investors,

Well, surprise, surprise, we rallied into the close yesterday. Check out the rebound in the SPY - we continue to close above the key level of 115. Today, we are up as well, so between the TREND, options expiration week and the FOMC, it seems likely that we will push higher.



The term "extended" and dissenters may give the markets to reverse, but is there enough reason for the Fed to change their stance. Free money right? Everything is fine right?

One point I would like to get across is inflation. There isn't any if you look at the strength of the US dollar compared to other currencies when international fear, tension, downturns occur. If you think the Greenback is weak, look at other currencies during worrisome times.

If there isn't demand due to stagnant economy, then we don't need as many natural resources, thus price declines. We can only have inflation in a runaway economy and I don't see another runaway economy to the upside after last year's upmove. We can still go up, but not in the amount we did in 2009 and probably at a slower pace.

What does that mean? Covered calls of course - slow grind upwards is the perfect setting for selling time decay. And if the markets break? You have protection in place and can add more by doubling down, buying puts, etc...

In the forex markets, a Buffalo Bounce showed up after a 200 Pip move. The USD/CHF also had one a little earlier in the day.


Now that I am playing with house money for the day, going to be very cautious during FOMC as you never know, it could be a whopper!!! In big ranges, it doesn't take much size to have a very strong day! If nothing happens, it is outside to play as:

Park City is hitting 50 degrees today. Salt Lake will be in the 60's. Get out for a road bike ride on the roads in the Preserve - just be careful in the corners as rocks are present. Take is S-L-O-W as the workout is in the uphills!

Remember to Be Environmentally Cool with Locals Have More Fun apparel.

The Local's Take: Mid-Day Commentary

Good afternoon Traders and Investors,

I apologize for not writing this week, but I have a great excuse. I danced, danced, danced and... it worked. Park City was blessed with more than a foot of snow in a 24 hour period. I heard 9990 was knee deep with face shots galore.

Another reason for not posting stories is that my father is in town. Quality time with Poppa Kahn and little Shane. Tomorrow is a family ski day, one day after the storm, but the trees at Deer Valley should still be soft and deep.

The markets are, well, still bullish. The SPY is very close to its old high of 1150 - double top or breakout to new highs? We shall see. The Nasdaq is off to new highs since the previous one in January.

I am still not convinced the upside has much more, so protection is in place - oil and retailers are a few sectors that I am using to protect the portfolio.

Forex has been all over the place - GBP and EUR weak, AUD, NZD and CAD very, very strong. All relationships are breaking down, so you must adapt!!

A shout out to the U of U Lifelong Learning class - we covered a ton of material last week. We will review shorting, Fibonacci's, Moving Averages, Stochastics and MACD's to begin the final class on Monday.

Thanks to all of the students who have emailed with questions/stock plays.

Have a great weekend, be environmentally cool and see you on the slopes.

The Local's Take: Mid-Day Commentary

Good Morning Traders and Investors,

Snow is in the forecast. Sunday will be a great day to hit the Stein Eriksen buffet after a morning of powder skiing (fingers and toes crossed). A little pre-game with Bloody Mary's before kickoff. The over under is probably around 100 as Manning and Bree's duke it out.

If you are sticking to the groomers at Deer Valley, Lucky Star is my pick of the day. Consistency is the reason: pitch, width, a few rollers and grippy snow.

Let's take a peak at 2 charts. By the way, I just entered 2 Double Fall Line Trades - one winner, one loser - the winner was larger than the loser - thank you money management. I also entered 2 Buffalo Bounces - both winners - although premature in taking gains in both, but it is late on a Friday and the mountain awaits!!

SPY - it is all about SEQUENCE. We are making lower lows and lower highs on a short term chart. We haven't violated the uptrend on the longer term charts so I am taking this opportunity to sell puts on commodities - see PHO below. Some commodity stocks are off as much as 25 percent and I love buying dips in strong sectors for my investment portfolio.


PHO - selling naked puts gives you a credit so if you take ownership of the stock, you get paid to buy it!
On the forex side, the EUR/USD was hammered, but as I mentioned, I nice oversold area occured with the Buffalo Bounce trade. Overall the dollar strengthened with the equity selloff. I expect Monday to be a little lackadaisical with a bias to neutral to bearish for equities so I don't expect any change in the strong dollar.

That's the quick take for the day. Get out and do something fun and remember to Be Environmentally Cool with Locals Have More Fun apparel.

The Local's Take: Mid-Day Update

Good Morning Traders and Investors,

Big events are on the horizon: Thursday's weekly unemployment claims, retail sales and 1st Quarter earnings (kicked off by a miss by Alcoa yesterday).

The Dow is currently down the most in what feels like, well, 2010. Will it stay down? As you well know, the Dow has been like a beachball in water. Push it down and it pops up to intraday highs (see yesterday's close) and then eventually makes a new "recovery" high.

So mark it on your sheets, the Dow has a recent high of 10,676 and the SPX had a recent high of 1149. Another 50 points and we make it to 1200, where for some reason I am hearing would be a major sell point.

Personally, I am surprised we came back this far, but another 50 points wouldn't surprise me as there seems to be undeniable strength. (Shown by more buyers than sellers). We would have to have some really weak economic data, earnings that miss and maybe even other events that would then adversely affect the uptrend and positive vibes in the equity markets.

Even though the Dow is down, the forex markets are pretty slow. I will update a chart from yesterday's post, the iron ore miner VALE.

It has retraced over 61.8% percent of its 2007-2008 downfall. If you were lucky enough to ride the commodity wave, then you should be thinking about protecting your positions because trends don't run forever. I know, I know, the trend is our friend, but let's not get greedy. Vertical spreads such as bear calls and covered calls with TIGHT risk stops are a good play as the TIGHT stop doesn't allow for upside profit in the stock to frustrate/get away from you.

Also, don't focus on the dollar amount of the covered call, as in all trading, it is all about PERCENTAGES. It is also a risk free way to learn to enter/exit trades and create a trading plan using TECHNICAL analysis.

Talk about risk free, try being a weatherman for the Weather Channel. They go from 10 days of sun to 8 days of snow in one day. Do they not see these fronts appearing/dissappearing? Well, whatever the case, snow???? is in the forecast for the greater Park City/Wasatch mountain area.

Must be that famed Sundance effect starting to kick in. The people watching of the "all blacks" starts soon. So hop on a plain and come on out in your best black pants and black shirt as it will be a great year to participate in the fun as the economy has definitely put a damper on the amount of "industry professionals" who make the yearly trec to Mecca.

Let's talk SRI - so any of you traveling to the Park City area, you may notice the pollution in SLC. My snagit editor isn't working, but just google it. Our pollutants in parts per million over the past few days have been the worst in the nation, by far. Don't worry, more highways are being built, but not an expansion of public transportation. Sweet!

The SRI stock of the day is quite conservative - FPL, which invests heavily in alternative (wind) energy. Again, other stock to own in the portfolio and generate cash every month by selling out of the money calls (with management).

I apologize for the chart snafu, but you can check them out on your brokers site. If you are in need of a broker, please email me as I have a pretty good handle on the advantages and disadvantages of most out there.

Happy Trading and Be Environmentally Cool with Locals Have More Fun Apparel

The Local's Take: Early Morning Forex Update

Good Morning Traders and Investors.

The dollar was hammered on Friday and broke through support levels against many currencies and alas, the Sunday night trade in America (the Monday Asian and European session) carried the same tone and hammered the dollar even more.

A few currencies are at their highs against the dollar. The AUD/USD and USD/CAD:





The up trend is the same for the other currencies against the dollar, they just may not be as close to their highs as these two.

Typically this is a good sign for most equity sectors and of course the commodity sector. Let's take a look at VALE which had a very nice breakout in the past few days:
The stock has retraced over 61.8% since bottoming in March with the rest of the markes. Its old highs are in the 40's from 3 years ago. Will it run straight to that point? I guess it depends on how weak the dollar becomes.

As far as our daily look at socially responsible stocks go, I picked one of the bellweathers, FSLR which has a very interesting pattern given the strong uptrend in the broad markets:


That is a very bearish pattern as the stock is making LOWER highs and pressing into its lows. It looks to be at resistance right now, so we will see if it is rejected.

For all of you skiers out there, I will give you a weather pattern that the Wasatch Skiers are hoping for. It is called the Sundance effect. Most Sundance attendees come unprepared for heavy winter snows and all of a sudden, it DUMPS! They flood the retailers looking for hats, gloves, scarves, jackets, boots, etc... BUT, they aren't big skiers. The slopes are empty (see Deer Valley) and the snow is plentiful. Cross your fingers for the same as the Wasatch could use it this year.

If this pattern doesn't come to fruition, put on your carving skis and rip the groomers. The days are starting to get a little warmer and longer and catching some people watching at the "Silver Lake Beach" is always a fun spectacle.

Happy Trading and Be Environmentally Cool with Locals Have More Fun Apparel.

The Local's Take: Socially Responsible Trade of the Day

Good Morning Traders and Investors,

Whether you make money going long or shorting SRI stocks doesn't matter to me.
A trading opportunity is a trading opportunity and more profit means more charitable donations.

Of course I am a holder of long term SRI stocks in my investment portfolio, but every now and then an opportunity to make money covering, protecting, or shorting stocks and ETF's comes along.

Before we get into the charts, head to Park City for some long groomers and get a tan at the beach at Deer Valley's mid mountain. It really was a "beach" at one time as the lake did exist prior to the miners digging so many tunnels and the water draining below. A ski vacation and people watching at the Deer Valley beach - classic!

Speaking of a tan, let's look at TAN, the global solar energy ETF (get it, TAN!):


If you knew nothing other than support and resistance, you could make money trading TAN. Looks like puts and bear calls are the play in this region, with puts being in favor due to low volatility.

Happy Trading and Be Environmentally Cool with Locals Have More Fun Apparel