Hello everyone, by now you’re aware we have canceled today’s Monthly Trader User Group session due to heavy snow….I tried to wait as long as possible hoping the snow forecast would prove wrong, but currently we’re under heavy travel restrictions (at least in my area) so I decided to cancel our Monthly Saturday Session today in Connecticut….please note that our next Monthly Session will not be held until after February’s Option Expiration period or Saturday February 18^th….the topic for that Session will be Straddles and Strangles, an Option Volatility Strategy.

However, I am happy to announce a special on-line webinar session for ALL our current MEMBERS very soon…it will be in the evening around 7 PM and will be recorded for all of you that cannot make it….

The topic of this special webinar will be how to manage your short positions when you’re holding an option spread position.  This was the scheduled topic for today’s canceled session and since I get questions all the time on how to properly manage your short option contracts then I think this webinar will be very helpful for everyone….

So stay tuned for the upcoming invite…it will be password restricted and only viewable by ALL TUG MEMBERS which includes ALL of our current Annual TUG Members; our PMT Members and our One on One Coaching Members…

If you are a current Blog Subscriber or a Meetup.com Subscriber but have not joined our Trader User Group yet but are interested in attending this special session then please respond to this email and I will set you up for a minor attendance charge.

Please enjoy the reminder of our weekend, drive safely and the Pro Football playoffs.

U.S. stock futures are sinking this Wednesday morning as we saw a very sharp spike in Italian borrowing costs on their 10 Year Italian Bonds.  The Dow opened down over 240 points and the S&P 500 fell almost 30 points with investors panicking over the very high yields currently underway in the Italian Bond markets.

We’ve been watching 10 Year Italian Bond yields for over 5 weeks now in our Pre-Market Trader Sessions as a proxy for the underlying health of the global markets so it is no surprise to us when sell-offs like this happen…even with the large bullish moves we experienced during October we were watching the Italian Bond yields rise from 5.62% to over 7%.  These yields must come down in order for the global equities market to settle down.

If you are not part of our Pre-Market sessions send me an email and I will get you set up…don’t pay attention to what the “talking heads” on TV are saying and learn to watch what really matters…price action and the flow of money is what you should be closely watching….

Trade Smart — Not Often

hpb

Hello everyone, I hope for those of you living in the State of CT you’re fairing better than I did…my power was out until last evening (I lost all power last Sunday!)…really a “Daniel Boone” kind of moment…no heat, no electricity and of course my car was stuck inside the garage since the manual override on the door did not work….no communication makes for a very difficult set of days….and we still have hundreds of thousand of people without power as I type this note…I hope they’re all ok.

Just a reminder for our Pre-Market Trader members our next upcoming session is this coming Tuesday morning at 7:30 AM….I will get the webinar invites out today….seems I got a ton of email and Skype messages wanting to know what’s going on…that’s good since it shows you guys are paying attention…I love it!

By the way, a very quick look at the markets this morning confirms there’s trouble brewing Europe and the news is not good….I have repeatedly told our PMT members for the past month to pay close attention to the yields on 10 Yr Italian Bonds…more specifically, these yields must stay below 6% to keep the water from boiling….I told folks over 4 weeks ago if the Italian bond yields jumped up over 6% that signals big issues…don’t listen to the news since it changes hour by hour depending upon who is talking and what station you’re listening to…bond yields are the lifeblood of the markets, the money flow if you will and for Italian bond yields to be rising over 6% indicates Dorothy isn’t in Kansas anymore…

I have kept our PMT members appraised of these yields during each session…granted, some days the news out of Europe was good (and the markets rallied) and some days the news was bad (and the markets fell)…the only item you really need to follow, to really understand how the global markets are reacting to the Euro crisis is the 10 Yr Italian Bond yields….we started watching them when they were at 5.62% and have followed them since…and like water always finding a low point or a leak no matter how small, the global bond markets will always represent the best view of market risk…and the way to really look at market risk in Europe is NOT what the talking heads are saying on TV or even worse; -what the Politicians are saying in front of the camera’s…simply watch the bond yields…this keeps your sanity in check and you will believe what the markets are saying, not TV pundits…remember, the markets and price action is always correct…a true reflection of value (or lack thereof)….

I am send this email out to ALL of our Trader User Group Members and non Members (those who subscribe to our blog as well as those that joined our Meetup.com web site)….if any of you are interested in joining our Pre-Market Trader sessions then simply respond to this email and I will get you all set up….we’re having tons of fun!!

Have a great weekend and I will be in touch…and enjoy the madness!

Trade Smart — Not Often

Hello everyone, I hope each of you in the U.S. enjoyed the Labor Day holidays…the markets were closed on Mondays with the exception of key Futures securities…during Sunday evening and throughout Monday morning I sat and watched the US futures really get crushed (yes, this is what I like to do on holidays!) due to structural financial issues around the Globe…if you’re following our weekly video updates you’re certainly aware of what I’m referring to that has driven volatility well over 30…

So, today I knew we would have a really ugly open and that is exactly what happened….although as we moved throughout the day buyers did step in and provide a floor to the U.S. equity markets….now, looking at the chart below of the Dow Futures you can see, as I’ve annotated, the candle formed today is a Hammer which signals a potential trend change, or a continuation of an up move….now, I don’t execute trades off candles but they do provide support and help confirm other signals that, when combined do indicate the desired action to take.  In the chart below the next key high the Dow futures price action should take out is that bar’s high or 11,197…an even more conservative play would be to wait until you take out the previous bar as well or e previous bar high or 11,518…

Now let’s look at a chart of the 30 Bond Futures…they have been on a literal rocket ship ride up lately but I suspect may now be getting a little bit tired….in this chart you can see I highlighted today’s candle which is a inverted hangman which, just like the Dow candle, portends a potential trend change…again, I don’t trade off candlestick patterns but do use them to help confirm and support my trade bias…there is not a trade to take here but at some point a great short position is setting up for a good ride….let’s wait and be patient, the trade will come to us….

Trade Smart — Not Often

hpb

Hey Folks, Happy Labor Day! for our U.S. members…..and even though the markets are closed here in the U.S. the Futures markets are open and so far it is not pretty if you’re bullish….the chart below shows you where price action  currently resides…you can see price action is currently testing key Fibonacci level extensions off the Aug 9th lows…the number to really watch close is the 1111.25 level where the recent up move indicates whether our price activity over the past few weeks has simply been a dead cat bounce or we have in fact found lows and looking to consolidate support….

This chart is a daily chart of the S&P 500 E-Mini Futures….it does not bode well for a market opening this Tuesday as we head into September, which by the way has traditionally been a bearish month if history has any say…..

This will make for a very interesting Pre-Market Trader session tomorrow morning….

Trade Smart — Not Often

hpb

Folks we just got our Labor reports in this Friday morning and I must say they look absolutely horrible!  Essentially, we added a big fat “ZERO” to the jobs number for the month of August…some say we are still in our recession and have never left; -others say we’re going back into another double dip recession!   I say, “Who cares!”  either way you need to follow the price action on the charts and it will tell you what to do…those Members attending our Pre-Market Trading sessions have been prepared for this potential pullback by using key price levels on the securities that we follow….I have been talking about bearish action that is backed up by what the charts are saying…let’s take the Dow chart below as an example…

Looking at the daily chart below of the Dow Jones Futures you can see the key support and resistant levels highlighted…we were sitting just under key resistant levels of the 200, 100 and 50 day moving averages and I told all our Pre-Market traders to anticipant a pullback on any hint of bad news…of course we go into more detail than this during our sessions but this very simple chart speaks volumes…

Now, looking at the same chart let’s zero on on the next few trading days as we go into and come out of our Labor Day weekend holidays here in the US…

The chart below focuses on the area circled in red in the chart above…the chart below is a 4 hour chart….you can see the next key support levels at 10714….in the near term look for this to either brake or hold…should it break we’ll continue to play the action as the price momentum indicates…should it hold we have tools in our kit to play the upside as well…

If  you are interested in learning more about our Pre-Market Sessions then give me shout or send me an email…or even better, talk with folks that are current members in our pre market trading sessions…

For those User Group Members we have posted new videos in our Learning Center that are now available for your use…go check them out…

Trade Smart – Not Often

hpb