Traders' Library Blog

Today's All Things Forex Broadcast: Is this the Quiet before the Next Storm for the EUR?

In the broadcast today: Is this the Quiet before the Next Storm for the EUR? With the EUR enjoying a relief rally, we ponder whether the worst is behind or if this should be considered as the quiet before the next storm for the EUR. We ask the expert Mr. Jack Crooks, Chief Investment Officer at Black Swan Capital, on his view of the Greek and EU debt crisis, what are some structural problems in the EMU, and his outlook for the EUR, we analyze the latest trend developments with the EUR/USD currency pair, we take a close look at the JPY after the BoJ monetary policy meeting, we list the top 10 economic events that will move the markets in the new trading week, we discuss some of the consensus forecasts for the upcoming economic data, we highlight the market's reaction to the Japanese CPI, the Bank of Japan Interest Rate Announcement, the Euro-zone HICP, and the U.S. GDP, we discuss forecasts from Bank of New York-Mellon and UBS, and prepare for the busy trading week ahead.

Live Broadcast from 1:00 pm to 2:00 pm, Eastern Time (18:00 - 19:00 GMT), Monday - Friday.

Listen to the archived Broadcasts

Today's All Things Forex Broadcast: What's Next for the EUR?

In the broadcast today: What's Next for the EUR? In the aftermath of the Fed's commitment to keep rates low for "extended period" which has provided an opportunity for the Euro to correct some of its losses, we continue to focus on the single currency and interview our guest Mr. Cliff Wachtel, Chief Analyst at AvaFX, on his view of the debt crisis in Greece and the Euro-zone and its implications for the future fate of the EUR and other currency majors, we analyze the latest trend developments with the EUR/USD, EUR/GBP and EUR/JPY currency pairs, we take a close look at how the NZD and some majors trading against the JPY are benefitting from the current market environment, we highlight the market's reaction to the Fed and the RBNZ interest rate announcements, the latest news from Greece and the EU, and the U.S. Jobless Claims, we discuss new forecasts from Morgan Stanley, Bank of New York-Mellon and UBS, and prepare for the trading session ahead.

Live Broadcast from 1:00 pm to 2:00 pm, Eastern Time (18:00 - 19:00 GMT), Monday - Friday.

Listen to the archived Broadcasts

Free Webinar with Bennett McDowell

Learn How to Identify High Probability Entries & Exits with The ART® Trading Software

Who: Bennett McDowell

What: Free Exclusive Webinar

When: Wednesday, May 5, 2010 | 7:30 PM - 8:30 PM EDT

Where: Click here to register!

In this eye-opening webcast seminar you’ll learn how to trade the realities of the market.  Join Bennett McDowell as he shows you ways to discover high probability entries and exits combined with effective risk control.  These techniques work in all markets and in all time frames and will add structure to your trading and investing.  The ART® methodology gives you the power to prosper in today’s challenging market.  Whether you are a day trader, swing trader, position trader, scalper, or investor you don’t want to miss this event.

PLUS: At the end of this seminar one free lifetime license to the ART® trading software, valued at $1,998 US, will be given away to a lucky winner in a free sweepstakes!  (You must register and be present at the live webcast to win.)

Register Now!

Trade Selection Process

By: Chuck Hughes

My trade selection process involves three steps:

1) Determine the Price Trend
2) Confirm the Price Trend
3) Use the Keltner Channels to Time Your Entry

$295,799.77 In Actual Profits

This trade selection process is easy to implement but has been very effective in finding stocks and options with the best profit opportunities. My brokerage account Portfolio Profit/Loss reports below show that I currently have $295,799.77 in open trade profits after commissions. Learn how I used my trade selection process to select the trades in these portfolios.

For more information, please visit www.tradewins.com

FUTURES. STOCKS, FOREX AND OPTIONS TRADING INVOLVES HIGH RISKS WITH THE POTENTIAL FOR SUBSTANTIAL LOSSES.

PLEASE READ. PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. THERE IS A SUBSTANTIAL RISK OF LOSS TRADING STOCKS AND OPTIONS WITH OR WITHOUT THIS OR ANY OTHER ADVERTISED PRODUCT, SERVICE OR SYSTEM. ALSO, HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.

Today's All Things Forex Broadcast: Will the EU Debt Virus Make the EUR a Toxic Investment?

In the broadcast today: Will the EU Debt Virus Make the EUR a Toxic Investment? On a turbulent for the Euro Fed Wednesday, we examine how the Greek debt crisis could turn into a debt virus for the European Union and what would be the "toxic" implications of that process for the EUR if the EU officials do not implement aggressive measures to contain the virus from spreading, we analyze the latest trend developments with the EUR/USD currency pair as the EUR produces a new 1-year low vs. USD, we keep an eye on the USD and the NZD ahead of the Fed and the Reserve Bank of New Zealand's interest rate announcements, we note this morning's strengthening of some currency majors against the JPY, we highlight the market's reaction to another Standard & Poor's credit ratings cut, this time for Spain, the Japanese Retail Sales, and the Australian Consumer Price Index, we discuss new forecasts from JPMorgan-Chase, Goldman Sachs, BNP Paribas and Royal Bank of Scotland, and prepare for the trading session ahead.

Live Broadcast from 1:00 pm to 2:00 pm, Eastern Time (18:00 - 19:00 GMT), Monday - Friday.

Listen to the archived Broadcasts

Free Chapter Tuesday-- Gann Simplified

This week’s free chapter is from Gann Simplified by Cliff Droke.  Be sure to check back next Tuesday!

 CHAPTER 4

Gann’s Chart-Reading Technique

Gann was a big believer in using financial charts to judge the soundness of common stocks and commodities. “All of the information that affects the future price of [stocks and commodities] is contained in its fluctuations and you need nothing more than its record of prices,” he used to say. Most of his work was based around various ways of interpreting the chart, and without it, his forecasting success would have been largely impossible.

The fundamental premise behind the use of charts in trying to predict price trends is the old maxim that “history repeats.” Gann was fond of quoting the passage of Ecclesiastes in the Bible, which says, “The thing that hath been, it is that which shall be; and that which is done, is that which shall be done; and there is no new thing under the sun.”

“This shows that history is but a repetition of the past and that charts are the only guide we have of what stocks have done and by which we may de-termine what they will do,” Gann would say.

Along with the price indications provided by the chart, Gann always paid special attention to the trading volume behind the price movements. “The volume of sales on each individual stock shows the percentage that is being bought and sold. That is why the tape and price fluctuations tell the truth, provided one interprets the tape correctly.” Gann pointed out that a stock cannot be distributed or accumulated without a large volume of sales. Someone must buy and sell a large percent of the capital stock near the bottom or top in order to cause a big move in either direction. Therefore, Gann urged traders to study volume closely, along with the time required to sell a large amount of stock and the number of points which it moves up or down while the volume of sales is accumulating. “Study the volume of sales at each important bottom and top and consider the number of shares outstanding in each stock,” was his frequent admonition. “This will help you to determine whether buying is better than selling, or not.”

Today's All Things Forex Broadcast: Is the Door to $1.30 Open for the EUR vs. USD?

In the broadcast today: Is the Door to $1.30 Open for the EUR vs. USD? As the next phase of the Greek debt crisis raises the threat of contagion across the Euro-zone, we examine the renewed weakness of the EUR and ponder if we should consider the door open for further decline of the EUR vs. USD towards $1.30, we analyze the latest trend developments with the EUR/USD currency pair as it approaches an important support area, we explore the impact of this morning's massive risk aversion on the currency majors, we take a close look at the USD and the NZD ahead of the Fed and the Reserve Bank of New Zealand's interest rate announcements, we highlight the market's reaction to Standard & Poor's credit rating cuts for Greece and Portugal, the Australian PPI, and the U.S. Consumer Confidence, we discuss new forecasts from Goldman Sachs, Bank of New York-Mellon and BNP Paribas, and prepare for the trading session ahead.

Live Broadcast from 1:00 pm to 2:00 pm, Eastern Time (18:00 - 19:00 GMT), Monday - Friday.

Listen to the archived Broadcasts

Market Adaptive Trading.

An Excerpt from the Timely Trades Letter.

The market has three basic modes. It can be going up, down, or sideways. Over time the markets movement is made up of combinations of these three different behaviors. None of these behaviors lasts for long, the market is always switching between them. This is one of the keys to trading. Traders need to recognize that the market moves between these three modes and have the ability to recognize then the change has arrived and be able to switch to trading tools suitable for the new environment. This is a process I call Market Adaptive Trading. The market will not adapt to us. It does not care what we want or think. Therefor we must adapt to it. For more information on Market Adaptive Trading visit www.daisydogger.com

If you scan through a daily or weekly chart of the market for the last decade you can quickly identify a number of bullish, bearish, and trading range periods. The entire chart pattern for the decade is made up from varying length bullish, bearish, and trading range periods. Since the market has been, and will be, made up of bullish , bearish, and trading range periods; it is important to know how a trading system performs during these different periods. I do not know if next year will be like last year, but I do know that the market action next year will consist of some combination of bullish, bearish, and trading range periods. 

If I know how a trading system, or trading tool as I refer to them, performs in each of the three different market conditions; then I can watch the market to determine what type of condition we are currently experiencing and then use the tools...

Treasuries consolidate ahead of FOMC

*All rights reserved.  Reproduction or distribution of this newsletter without prior consent is strictly prohibited.

 

April 26th, 2010

 

See us at the LA Trader's Expo Friday, June 11 2010: http://www.moneyshow.com/caot/WorkshopDetails.asp?wkspid=C0F78BEC175A43A68A939CAB488E0235

 

As is often the case, it appears as though traders spent the day squaring positions ahead of the FOMC meeting.  The Fed will meet tomorrow but we won't hear the results of the interest rate decision until Wednesday afternoon. 

 

Most analysts aren't expecting the Fed to take any action to change monetary policy but there is some speculation of rate hikes later in the year, so traders will pay close attention to the commentary. 

 

This week's auctions began today with a 5-year TIPS offering, but the real news will come in the next few sessions with the issuance of $44 billion in 2-year notes, $42 billion in 5-year notes and $32 billion in 7-years.  The TIPS went off with ok demand from domestic investors but low demand from overseas investors;  this put the market back on the defensive.  The Treasury complex noticeably weakened following the auction. 

 

We continue to see support in the 30-year bond near 116 but the 10-year note reached our downside target in overnight trade (within a few ticks anyway).  This leaves our charts, and our opinion, a bit mixed.  We are taking a relatively neutral stance in the near-term as direction will be highly dependent on the FOMC, stocks and auctions...and this could be a difficult week to predict price.

 

Don't forget to register for our upcoming webinar with SFO Magazine!!  See our website (below) for details.

 

 

Investors are Awaiting the Fed

 

*All rights reserved.  Reproduction or distribution of this newsletter without prior consent is strictly prohibited.

 

April 26th, 2010

 

See us at the LA Trader's Expo Friday, June 11 2010: http://www.moneyshow.com/caot/WorkshopDetails.asp?wkspid=C0F78BEC175A43A68A939CAB488E0235

 

The U.S. equity markets were on hold today in anticipation of a two day Fed meeting taking place on Tuesday and Wednesday.  While the Greek saga continues, both the European and domestic markets seem to have moved on. 

 

The Greek government is seeking to utilize a rescue package from 15 EU countries and the IMF and the markets are treating this as a victory.  However, many are wondering "who" will be next.  There could be a handful of other nations that will be in similar need.

 

Coming into the session, the odds were in favor of the bulls.  After all, Monday's have been great days statistically for the markets and the market is in an up-trend.  Also, a considerable amount of price support was gained from a blockbuster earnings report by Caterpillar.  The equipment maker is considered a bellwether of economic activity due to its global operations and positioning to  benefit from economic expansion.  However, technical factors took its toll on pricing as the major indices remain dramatically overbought and in need of corrective action. 

 

As has been the case, many analysts are antagonists of this rally...or at least the size and breadth of it.  Peter Cardillo of Avalon Partners Inc believes that "perhaps defying logic a this point, and nevertheless moving up."  He added, "We will be headed for some sort of a pullback, which could happen at any time...for the moment, the enthusiasm continues."

 

We are sticking with Friday's numbers:

 

We are adjusting our next resistance in the S&P a bit higher to 1218, this makes a similar level in the NASDAQ at 2063 and 743 in the Russell.

 

Don't forget to register for our upcoming webinar with SFO Magazine!!  See our website (below) for details.

 

Today's All Things Forex Broadcast: Cautious Look "Down Under": Is the AUD Losing Steam vs. USD?

In the broadcast today: Cautious Look "Down Under": Is the AUD Losing Steam vs. USD? In the midst of what still remains a bullish AUD trend and ahead of a sequence of inflation reports from Australia, we take a close look "down under" and examine some warning signs that could signal potential future weakening of the AUD vs. USD, we analyze the latest developments with the AUD/USD and AUD/JPY currency pairs, we explore this morning's renewed pressure on the EUR on further investor concerns about the outcome of the Greek debt crisis, we note the bullish push of the GBP towards important resistance level against the USD, we continue to monitor the USD's ascend vs. the JPY, we highlight the market's reaction to the G20 meeting and the latest news from the Euro-zone and Greece, we discuss new forecasts from Morgan Stanley, Barclays Capital, Goldman Sachs, Bank of New York-Mellon and Credit Suisse, and prepare for the trading session ahead.

Live Broadcast from 1:00 pm to 2:00 pm, Eastern Time (18:00 - 19:00 GMT), Monday - Friday.

Listen to the archived Broadcasts

Learning Video: Swing Trading GCI Week_07

This is the sixth video of the life swing trading example using the stock GCI. Idea is that you follow the trade evolution systematically learning to apply technical analysis techniques. Please note, this is not an invitation to trade this stock, information given is to be used for training purposes only.

Still no trading signal on the daily chart, but there were a couple of  good opportunities on the 5-minute chart.

Sylvain Vervoort
http://stocata.org/

S&P500 Analysis Update: April 25, 2010.

In the daily chart we made once more a higher high supported by the last uptrend line. The index is now very close to the Fibonacci target around 1225. If price manages to drop below the last uptrend line next week and next below the Bollinger bands median average line, a medium term downtrend will start. Advice is still to wait for the breaking of this last uptrend line.

In the weekly chart you can see a rather rare last engulfing pattern while reaching resistance levels and making tops in the indicators. This keeps confirming that we can expect a lower index soon.

We are either finishing a long term up move since the price bottom in March 2009 and we expect next a correction wave 2 of a higher degree after finishing this up move, followed by a long term wave 3 up move. This is a very optimistic long term view, probably to good to be true?

Another possibility with the wave {5} now close to completion is that the index finished a medium term correction wave A up and we expect next the medium term correction wave B down, with an index remaining above 650 but most probably higher.

The SATS2 expert is green, there is an open long position. I am using a slightly faster SATS2 now on the daily chart. This will give some more entry and exit points, but the advantage is that it will also be faster at the main turning points. We will not trade if it is obvious that we are looking at a "false" SATS2 signal.

Indicators are not giving any clear signals for the moment. I would wait for a break of the last red uptrend line before looking for a short trade.

Time Tested Trading Tips...

An Excerpt from the Timely Trades Letter.

When I am trading I know exactly how I am going to exit the position before I ever enter it. Entering a position without a clear exit strategy usually ends up trading on emotions or hunches. Trading on emotions or hunches often leads to losses. Mary your spouse for life, but just date stocks. Always have an exit strategy. Always.

The current market conditions play a key role in determining exit strategies. Stocks behave differently in trading range markets than they do in trending markets. Since a key part of trading is adapting to the market (it will not adapt to you, you must adapt to it) traders exit strategies should change with the market conditions.

The market is the summation of a large number of individual stocks. In trading range markets most stocks tend to ‘pop and drop’ rather than show strong trends. When the market is in a trading range then almost by definition most stocks cannot be trending. If they were then the market, which is the sum of all those trending stocks, would also have to be trending. When the market is in a trading range it tells you that the typical stock is not going to run far before it retraces. Traders use this market information to realize that in trading range markets they need to focus on shorter holding times and quick profits. In trading ranges traders are trying to piece together a trend in their account from the brief pops in several different stocks rather than trying to catch the rare single stock that is trending. Traders pick up the initial move on a stock that triggers, close it then pick up another pop and keep trying to repeat the process. Looking for stocks that run far in a trading range is likely to just be frustrating, adapt to what the market is showing you. If you use the same approach in all market conditions you are likely to get a lot of practice exercising stops.

When the market is trending stocks tend to run longer because...

The Trading Week: Apr. 25 - Apr. 30

Apr. 23, 2010 (Allthingsforex.com) – The monetary policy meeting of the Federal Open Market Committee will take the center stage in the week ahead, as traders will focus on the Fed’s interest rate decision, and the statement that will follow it, for clues of future changes in the existing monetary policy of keeping rates low for “extended period”.  

In preparation for the new trading week, here is a look at the most important economic events that every currency trader should pay attention to.

Sunday, Apr. 25 will start the trading session with the Japanese CSPI- Corporate Services Price Index, a measure of inflation experienced by corporations when purchasing services, at 7:50 pm, ET.

Monday, Apr. 26 will bring only one notable economic report- the Australian PPI- Producers Price Index, the main measure of wholesale inflation experienced by manufacturers and a leading indicator of consumer inflation, scheduled at 9:30 pm, ET.
   
Tuesday, Apr. 27 will begin with the Swiss Consumption Indicator of consumer spending, at 2:00 am, ET, along with the German GfK Group Consumer Climate and Expectations Index, a leading indicator of economic conditions, consumer sentiment and expectations in the Euro-zone’s largest economy, also at 2:00 am, ET.

News from the U.K. will bring the British Bankers Association Mortgage Approvals Report, a leading indicator of the U.K. housing market measuring the number of issued home loans, at 4:30 am, ET.

Another notable report from the U.K. will follow with the release of the CBI- Confederation of British Industry Distributive Trades Survey, a leading indicator of consumer spending measuring sales made by retailers and wholesalers, at 6:00 am, ET.

The U.S. economic data will start with the S&P/Case-Shiller National Home Price Index of the monthly changes in the average price of single-family homes in 20 metropolitan areas, at 9:00 am, ET.

Today's All Things Forex Broadcast: What's In Store for the EUR and the USD Next Week?

In the broadcast today: What's In Store for the EUR and the USD Next Week? At the end of a volatile trading week which has seen a turmoil in Greek bonds and has culminated with a formal request from Greece for financial aid from the EU and IMF, we explore the important economic events for the week ahead and ponder what they may bring for the EUR and the USD, we examine this morning's EUR strengthening and analyze the latest trend developments with the EUR/USD, EUR/JPY and EUR/GBP currency pairs, we note the bullish breakout of the USD vs. JPY, we examine the weakness of the GBP and CAD after series of disappointing economic reports from the U.K. and Canada, we list the top 10 economic events that will move the markets in the new trading week, we examine the consensus forecasts for the upcoming economic data, we highlight the market's reaction to the Greek bailout request, the U.K. GDP, the Canadian CPI and Retail Sales, the U.S. Durable Goods Orders and New Home Sales, we discuss new forecasts from Goldman Sachs and Bank of New York-Mellon, and prepare for the busy trading week ahead.

Live Broadcast from 1:00 pm to 2:00 pm, Eastern Time (18:00 - 19:00 GMT), Monday - Friday.

Listen to the archived Broadcasts

Traders' Library 2010 Trading Forum in CHICAGO!

Currently, I am in Chicago for our 2010 Forum!  For all of you not here….YOU SHOULD BE.  There is a great group of traders presenting and attending; it will definitely be a jam-packed weekend of information and fun!  Jea Yu and Larry McMillan will be kicking our event off tonight with two great sessions.

You all have a great weekend and I will be sure to update you all next week when I return!

HAPPY TRADING!

Market Analysis and Trading Plan.

An Excerpt from the Timely Trades Letter.

The trading plan from the last Letter was to continue 

trading longs while the market remains above the ascending 

trend line drawn through the lows of 02/05 and 02/25 and 

04/01; with a note that ‘the best time to pick up new trades 

is during retests and bounces from this trend line’. I 

followed the plan and picked up several long positions on 

Mondays trend line bounce. The markets bounce generated 

profitable moves in several of our setups including PNRA, 

LPX, DLM, AVID, TWX, and HNR. I took profits in DLM when 

it hit the upper band, and will continue to use that as 

a successful exit strategy on swing trades, until the market

breaks above minor horizontal resistance in the 2555 area. 

Since the market is approaching minor horizontal resistance, 

I do not want to overstay my welcome in any particular trade;

so I take profits on trades that hit the upper Bollinger Band,

a horizontal resistance area, or are moving up on declining 

volume. I would rather take profits on those types of positions 

and then put them to work in another stock that is just

breaking out and starting its move.

The market price pattern is positive, it is moving up between 

the ascending trend line noted above, which acts as support; 

and the upper Bollinger Band, which acts as resistance. 

The volume pattern turned positive, since we have now seen 

three above average accumulation days in the last ten sessions.

As long as the market remains above this ascending trend line

Corporate Bonds: A New Safe Haven

By Kevin Grewal, Editor at www.SmartStops.net

As companies continue to outperform Wall Street’s expectations, bonds issued by non-financial companies are the most expensive they have been since the start of credit debacle and investors are starting to shun away from Treasuries turning to corporate debt.

According to Bank of America Merrill Lynch Index data, Chevron Corp.(CVX) and Johnson & Johnson (JNJ) led a drop in U.S. industrial company debt yields to 130 basis points more than similar-maturity Treasuries.   Additionally, the overall U.S. corporate bond market is up 1.3% this month and is expected to post its fourth straight month of gains.  In comparison, U.S. Treasuries have returned a mere 0.4 percent for the month, after witnessing a decline of nearly 0.85 percent the month before. 

Another indicator that corporate bonds are gaining appeal is overall corporate credit risk appears to be declining.  The Markit CDX North America Investment Grade Index Series 14 continues to increase as it gained 1.2 basis points, reaching a level of 89.4 yesterday.  The index is known to be used as hedge against losses on corporate debt or a way to bet on corporate creditworthiness.  Increases in the index generally indicate deterioration in investor confidence and decreases in the index indicates improving investor confidence.  Overall, the consensus behind corporate debt is that it is likely to outperform credit-default swaps. 

It is Earth Day, so here is a short video on the environment (the stock market environment that is)

http://www.etfportfolios.net/videos042210/

The above video makes of a video created in March 2009. For your reference, here is that video:

http://www.etfportfolios.net/videos032009/

David Vomund