August 25, 2011
- in Uncategorized by schooloftrade
Traders Look for opportunities ahead of jobless claims and Jackson Hole Summit
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The James’ Report: Professional Resources for Professional Traders
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– Markets appear to be enjoying a better risk backdrop ahead of Jackson Hole although Bernanke is unlikely to promise new action
– The financial press reported that hedge funds have the largest short position on the S&P 500 since December 2008. The bearish bets may be due to concerns over the outlook for growth. As of August 16th, hedge funds had a net short position of close to 72,000 short contracts (the largest short position since the failure of Lehman Brothers in 2008). Note it was reported in the press last week that Carl Icahn made a $2 billion bet on a decline in the S&P 500 index.
– European banks are believed to be better prepared for an economic downturn than in 2008. According to the press EU banks have raised over €250 billion in capital since the end of 2009. The weakness among EU financials mainly relates to regional banks. The concerns related to the European interbank market may be overstated.
– Apple’s Steve Jobs steps down as CEO; Burger King dumps mascot
– Germany Bundesbank member Dombret: Current funding situation very different from 2008
– Britain and Switzerland agree a tax avoidance deal
– CME again raises margins on gold and spot price off another $50/oz since the Tokyo open
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Today’s Economic News:
Looking at the news today we have another summer trading day ahead of us, and today is the Jackson Hole Summit, which is the time when central bankers around the world meet to discuss important topics. We will undoubtedly be hearing news chatter about this, and we will be watching volume around those times looking for clues.
We begin our day with Jobless claims at 830am so be looking for opportunities early today. We then move through the US Markets Open at 930am and then a minor news event Natural Gas Inventories at 1030am which will not be a big mover for the markets we trade (ie not Natty Gas). The big question today will be late-morning volume. Will we see the markets go to sleep early ahead of the GDP on Friday? Will the Jackson Hole Summit cause traders to hit the exits early, or will we see traders stick around and move these markets until 1130am today?
We will be expecting volume to slow down after 1030am today, so be looking for signs of the slowdown in market personality along with us in the trade room today.
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Looking at the Charts:
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34range on Gold Futures shows us:
– Outside day, below the PLOD, but transitioning into an INSIDE DAY
– Trading at the 34range BMT (sloppy)
– At the Highs of the Bear channel
My plan of attack on gold today:
– Be patient this price action is whippy
– As price rises im selling at resistance first
– Then im buying a pullback with new highs and buyers in charge
– Im avoiding the 34r BMT at 1735.0
– If we break above the PLOD 1744 i then consider buyers in charge and we start looking to buy aggressively.
– If we fail to break above PLOD 1744 we then will sell aggressively.
– If price drops to new lows im selling retracements
– If price drops to new lows I will also consider a price reversal and buy at support if we see the sellers are exhausted.
Crude Oil Futures
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