Hello everyone, I hope your enjoying the craziness of the current markets…I took a short position in the E-Mini’s yesterday which proved to be successful but today is starting out to the upside and is showing strength while the Treasury markets are showing signs of weakness…and finally the Gold markets are coming down off of the highs made the other day at 1300….
I am still of the opinion the upcoming earning season will cause a pullback which I will be reporting on for possible short positions…in the meantime, I believe the markets still have some strength in them for more of an up move…for those playing short term trades use the indicators we have reviewed in our evening webinars looking for long positions…keep in mind however we have key consumer confidence numbers released today at 10 AM which could cause the markets to pullback…I suspect these numbers will not be good…if that is the case, then watch the market reaction…should it go down then short positions are in order…
Trade Smart – Not Often
Folks just a quick trade that I wanted to put on to take advantage of a possible pullback in the S&P 500 thru earnings season….
I just put on a Bear Put Spread in the SPY’s using the Dec month with the following strike prices: Long 113 / Short 106….I did a Spread to reduce my costs (and risks) of just going Long the 113 Puts…Volatility is low (still) and I wanted to take advantage of that fact along with a wide spread like this one…
Trade Smart – Not Often
Hey folks, just a quick note to let everyone know I do appreciate your e-mails…I have set up our monthly Saturday session meetings with the Farmington Library all the way through December 2011….I like the location and venue and am happy for their willingness to allow us to meet there. As always, these meeting dates are held on the Saturday after Option Expiration Friday of each month (the 3rd Friday of the month).
Now where is the market going? More specifically, where is the S&P going?
As you can see in the weekly hart of the S&P below, the markets have been moving up slowly since pivot point j (around July 5, 2010) and hit the solid resistance of the 50% Fibonacci levels as indicated…I personally believe the markets are expecting a strong Q3 earnings period, hence the run-up in price….however, I think the markets will be sorely disappointed and we’ll see the markets pull back; -how far I am not sure, but if the support levels as shown here (around 1018) are broken then we will see the markets move back below the 1000 levels quickly…you can see my other blog posts that lays out the scenarios as I currently see them.
Now let’s look at the daily chart to get a closer view of current market action.
As you can see, I projected 2 possibilities for the market price action to follow; -a breakthru to the upside and a pullback to the lower wedge line…personally I believe a pullback is in order but will wait for confirmation to firm up my trades..should a bust out to the upside hold (right now is it doing what I projected which is an immediate retest of the actual resistance line) then I will change my bias…until then I will maintain a bearish bias for the overall markets and trade accordingly.
** TUG Flash Update — Up or Down? **
Hello everyone, did you miss me? Sorry for the delay but as most of you know I am attending to a medical issue but so far so good…..as a reminder, we have a great Saturday session coming up this weekend, Sept 18th and we got a number of folks already signed up…I would recommend if you can make it to do so since I will be covering some of the key risk management topics I covered at a members only webinar along with showcasing some really cool things getting ready to come out on our web site….again, it is this coming Saturday at the Farmington Library starting at 9:30 AM on the second floor….the address is shown below for those of you that are new to our group:
Farmington Library Address:
6 Monteith Drive
Farmington, CT 06032<
Ok, the markets seem to be saying a number of different things to a number of different folks right now…this is the time to be patient and let the markets come to you….I know it is hard to do, but let the markets simply come to you and you will be rewarded….I feel we are still in a trading range and have been longer term bearish but will change on a dime depending upon how price action and volume shape up now that summer is really over…also keep in mind this is triple witching week with options, futures and indexes all expiring and volume shifting to December contracts…this tends to create a slight upward bias towards the end of this option expiration trading week but don’t let that throw you off your game…..
Take a look at a couple of Scenarios I have plotted for the S&P Markets; -also keep in mind for any of these scenarios to play out the price action must follow with volume….this will be how I play the markets going forward…
Scenario #1; – Possible Head & Shoulder to the Upside….top price would be 1236 (not the 1136 I have in the graph)…….for this to happen the price action must penetrate and hold as I have indicated below in the chart…..
Scenario # 2…same scenario only a Head & Shoulders to the downside with a price measuring objective of 904 at the bottom….again, price must break the neckline (the measuring objective line) and hold to the downside for this pattern to fully develop….
And finally, if you are not really mixed up enough as it is, here is another pattern that has formed that is a rising wedge which indicates bullish activity should the price penetrate the upper boundary as indicated….take a look at the chart below…the price objective to the upside with this pattern is the same as the H&S pattern in Scenario # 1 which is 1236…..
So, all of this indicates to me that soon we will be having some solid moves with solid price action behind them…up or down, we want to trade with the trend….keep in mind I believe this movement will be affected with the coming earnings season which will be the straw that either breaks the back and causes a drop or the mortar for bricks to drive the price higher…you need to be ready to play it accordingly……