January 27, 2014
- in Uncategorized by schooloftrade
Nightly Newsletter 01/27/14; SchoolOfTrade.com
“Do not judge each day by the harvest you
reap, but rather by the seeds you have sewn”
Reflections from Today:
·
Volume
came back into the markets as sellers take profits
Volume
came back into the markets as sellers take profits
·
European
Equities sold off, which carried into US trading
European
Equities sold off, which carried into US trading
·
New
Home Sales came out very weak; worst came from Northeastern US down -27% y/y.
New
Home Sales came out very weak; worst came from Northeastern US down -27% y/y.
·
Lots
of News later this week
Lots
of News later this week
·
Durable
Goods & Consumer Confidence tomorrow (Tuesday)
Durable
Goods & Consumer Confidence tomorrow (Tuesday)
·
FOMC
Day begins tomorrow, news is Wednesday 29th
FOMC
Day begins tomorrow, news is Wednesday 29th
·
Markets
waiting to hear about “tapering” from the Fed
Markets
waiting to hear about “tapering” from the Fed
·
Chinese
New Year is Friday (Horse)
Chinese
New Year is Friday (Horse)
·
Gold
contract rollover on Friday 31st
Gold
contract rollover on Friday 31st
·
Crude
Oil went lower, sitting at support now (-1.25% @ 95.70)
Crude
Oil went lower, sitting at support now (-1.25% @ 95.70)
·
Gold
pushing lower, below all key support (-0.96% @ 1256.6)
Gold
pushing lower, below all key support (-0.96% @ 1256.6)
·
Mini-Russell
moves lower, below key support (-1.35% @ 1122.6)
Mini-Russell
moves lower, below key support (-1.35% @ 1122.6)
Economic News for Tomorrow:
Monday we
saw weak New Home Sales, which is putting pressure on the Fed ahead of
Wednesday’s FOMC Announcement.
saw weak New Home Sales, which is putting pressure on the Fed ahead of
Wednesday’s FOMC Announcement.
Remember,
the Fed was targeting the housing market with the stimulus packages over the
last 3 years, and with today’s disappointing sales report for new homes we may
see another delay on Wednesday for any threat of ‘tapering’.
the Fed was targeting the housing market with the stimulus packages over the
last 3 years, and with today’s disappointing sales report for new homes we may
see another delay on Wednesday for any threat of ‘tapering’.
Over the
last week of trading we have seen serious profit-taking ahead of this important
meeting, which has pushed prices off the highs.
We are very interested to see what the Fed says on Wednesday, so come
join us in the Live Trade Room for the release of the report!
last week of trading we have seen serious profit-taking ahead of this important
meeting, which has pushed prices off the highs.
We are very interested to see what the Fed says on Wednesday, so come
join us in the Live Trade Room for the release of the report!
Tomorrow we
have more important news to trade with, and we hope to have another BIG MOVE
like we saw today (Monday).
have more important news to trade with, and we hope to have another BIG MOVE
like we saw today (Monday).
On Tuesday
the 2-day FOMC Meeting begins, which won’t have much impact on the markets,
except for the fact there may be less volume traded as the major players in the
market will be trading very carefully ahead of this important announcement on
Wednesday at 2:00pm EST.
the 2-day FOMC Meeting begins, which won’t have much impact on the markets,
except for the fact there may be less volume traded as the major players in the
market will be trading very carefully ahead of this important announcement on
Wednesday at 2:00pm EST.
We have a major
Red-Star news event at 8:30am EST tomorrow from Durable Goods Order which is
always a big mover for our favorite futures markets.
Red-Star news event at 8:30am EST tomorrow from Durable Goods Order which is
always a big mover for our favorite futures markets.
Remember,
this is a Red-Star news event so we will try to hold a ‘runner’ for a profit-target
tomorrow after the news is released because there will be more volume and
hopefully volatility to help us grab a big winning trade before the end of the
morning tomorrow.
this is a Red-Star news event so we will try to hold a ‘runner’ for a profit-target
tomorrow after the news is released because there will be more volume and
hopefully volatility to help us grab a big winning trade before the end of the
morning tomorrow.
Later in the
morning we have more news from the housing market with the Case Schiller Home
Price Index (HPI). The housing market
took a big hit on Monday morning with the poor New Home Sales report so we will
be watching this report at 9:00am EST very closely to see what’s happening in
the housing market overall.
morning we have more news from the housing market with the Case Schiller Home
Price Index (HPI). The housing market
took a big hit on Monday morning with the poor New Home Sales report so we will
be watching this report at 9:00am EST very closely to see what’s happening in
the housing market overall.
We have
Consumer Confidence at 10:00am EST tomorrow, which is always a very important
news report, and with the release of the FOMC Meeting Announcement only 48
hours away we KNOW this information is going to be used by the Fed to make its
decision to taper in February.
Consumer Confidence at 10:00am EST tomorrow, which is always a very important
news report, and with the release of the FOMC Meeting Announcement only 48
hours away we KNOW this information is going to be used by the Fed to make its
decision to taper in February.
The most
important thing you want to keep in mind for tomorrow’s news is that we are
going into the FOMC Meeting, which means there will be fewer people in the
market and we will see less volume. Low
volume shouldn’t deter us from trading, but it WILL make for a little sloppier market-personality
tomorrow morning.
important thing you want to keep in mind for tomorrow’s news is that we are
going into the FOMC Meeting, which means there will be fewer people in the
market and we will see less volume. Low
volume shouldn’t deter us from trading, but it WILL make for a little sloppier market-personality
tomorrow morning.
In addition,
tomorrow we have major Red-Star news starting at 8:30am EST, and whenever we
have Red-Star news events on our calendar we try to get into trades that have a
potential to ‘run’ and we stay patient and place our profit-targets a little
bit further out in an attempt to make some easy money on a big move that often
follows major news such as Durable Goods Order.
tomorrow we have major Red-Star news starting at 8:30am EST, and whenever we
have Red-Star news events on our calendar we try to get into trades that have a
potential to ‘run’ and we stay patient and place our profit-targets a little
bit further out in an attempt to make some easy money on a big move that often
follows major news such as Durable Goods Order.
8:30am EST: Durable
Goods Order
Goods Order
9:00am EST: Case-Schiller
Home Price Index
Home Price Index
10:00am EST: Consumer
Confidence
Confidence
Day trading plan for Tomorrow:
Crude Oil:
VIP Chart:
 |
| Crude Oil VIP Chart |
Crude Oil pushed lower today, down a total of 1.25% on the
session, and our VIP chart is telling us a clear story ahead of tomorrow’s
trading session.
session, and our VIP chart is telling us a clear story ahead of tomorrow’s
trading session.
We see a bearish 2-day relationship, a wide trading-range,
and a closing-print on the lows of today’s range.
and a closing-print on the lows of today’s range.
The wide range today tells us to look for a narrow, possibly
consolidating market-personality going into tomorrow.
consolidating market-personality going into tomorrow.
The bearish 2-day relationship as well as the bearish closing-print
both tell us the sellers were in control the entire session today, and
amazingly we never saw a short-covering rally’ into the closing-bell which is
very typical for a big day moving lower and suggests the sellers are eager to
keep selling into tomorrow.
both tell us the sellers were in control the entire session today, and
amazingly we never saw a short-covering rally’ into the closing-bell which is
very typical for a big day moving lower and suggests the sellers are eager to
keep selling into tomorrow.
I’m looking for an opening-print tomorrow morning below 95.21
to resume selling short on Crude Oil.
to resume selling short on Crude Oil.
Anchor Chart:
Crude Oil is coming off recent highs last week and falling
quickly back to new lower-lows on this anchor chart.
quickly back to new lower-lows on this anchor chart.
 |
| Crude Oil Anchor Chart 1 |
We can see the trend-line acting as resistance overhead and
we have a bearish trend on this anchor chart which tells us we are going to
sell short tonight and into tomorrow morning’s session in London and the US.
we have a bearish trend on this anchor chart which tells us we are going to
sell short tonight and into tomorrow morning’s session in London and the US.
I have identified some key areas to look for selling
opportunities this evening and tomorrow morning at 96.20 and 96.76. I am going to avoid selling short directly
into the support level at 95.25, but once we get below it we are given the
green light to sell short with a profit-target down at 94.55.
opportunities this evening and tomorrow morning at 96.20 and 96.76. I am going to avoid selling short directly
into the support level at 95.25, but once we get below it we are given the
green light to sell short with a profit-target down at 94.55.
 |
| Crude Oil Anchor Chart 2 |
As long as we keep getting new lower-lows I am going to sell short
on Crude Oil and use the following support levels as my profit-targets for
tomorrow. I will use 94.55, 94.13,
94.83, 92.74 and 92.09. One thing to
remember is not to sell directly into any of these levels, wait for price to
rise off the lows for you to sell it down again.
on Crude Oil and use the following support levels as my profit-targets for
tomorrow. I will use 94.55, 94.13,
94.83, 92.74 and 92.09. One thing to
remember is not to sell directly into any of these levels, wait for price to
rise off the lows for you to sell it down again.
Gold:
VIP Chart:
 |
| Gold VIP Chart |
The VIP Chart of Gold makes it look like we are 48 hours away
from the FOMC Meeting Announcement; we have to remember that FOMC directly
correlates to Gold futures because this market is a shelter against a falling
dollar. Whatever happens on Wednesday after
the release of the meeting announcement is going to have a big impact on Gold,
and it APPEARS that traders on Gold have decided to play it safely today and
into tomorrow on the VIP Chart.
from the FOMC Meeting Announcement; we have to remember that FOMC directly
correlates to Gold futures because this market is a shelter against a falling
dollar. Whatever happens on Wednesday after
the release of the meeting announcement is going to have a big impact on Gold,
and it APPEARS that traders on Gold have decided to play it safely today and
into tomorrow on the VIP Chart.
Our 3-day relationship is flat and we are in the middle of
the range from 1270.4 down to 1248.7.
the range from 1270.4 down to 1248.7.
Our range was very narrow today, which usually tells us to
expect a wide trading-range tomorrow, but I highly doubt that will happen with
the FOMC announcement only 48 hours away.
I don’t want to predict, so I will be ready for ANYTHING tomorrow, but I
won’t hold my breath LOL.
expect a wide trading-range tomorrow, but I highly doubt that will happen with
the FOMC announcement only 48 hours away.
I don’t want to predict, so I will be ready for ANYTHING tomorrow, but I
won’t hold my breath LOL.
We are 2-sided on Gold going into Tuesday which means the
SMART MONEY is going to buy support and sell resistance levels as price moves
up and down (sideways) ahead of Wednesday’s report at 2:00pm EST. We will be wise to look for buying
opportunities at the 1248.7 and 1257.1 and selling opportunities at 1267.0 and
1270.4 overhead.
SMART MONEY is going to buy support and sell resistance levels as price moves
up and down (sideways) ahead of Wednesday’s report at 2:00pm EST. We will be wise to look for buying
opportunities at the 1248.7 and 1257.1 and selling opportunities at 1267.0 and
1270.4 overhead.
Anchor Chart:
 |
| Gold Anchor Chart 1 |
Gold is also moving lower this evening, which is odd because typically
we see Gold and Crude Oil moving opposite to each other…not in this case…which
gives us a clue that SOMETHING is coming on FOMC day Wednesday this week.
we see Gold and Crude Oil moving opposite to each other…not in this case…which
gives us a clue that SOMETHING is coming on FOMC day Wednesday this week.
We are below the key moving-averages on the anchor chart and
we have the green light to sell at a premium as long as we don’t sell directly
into the support levels of 1250.3, 1246.0 or 1241.3.
we have the green light to sell at a premium as long as we don’t sell directly
into the support levels of 1250.3, 1246.0 or 1241.3.
 |
| Gold Anchor Chart 2 |
Our best selling opportunities will come if price moves
HIGHER before it goes lower. I am
looking to sell short at the trend-line resistance around 1261.0, and then at
the sell-zones at 1265.7 and 1273.5.
HIGHER before it goes lower. I am
looking to sell short at the trend-line resistance around 1261.0, and then at
the sell-zones at 1265.7 and 1273.5.
As soon as I can get into a short trade on Gold I am going to
place my profit-targets at the levels below me at 1250.3, 1246.0, and 1241.3.
place my profit-targets at the levels below me at 1250.3, 1246.0, and 1241.3.
Mini-Russell:
VIP Chart:
 |
| Mini-Russell VIP Chart |
The Mini-Russell and other e-mini’s have been moving lower
today on what we assume is profit-taking ahead of Wednesday’s important FOMC
Meeting Announcement.
today on what we assume is profit-taking ahead of Wednesday’s important FOMC
Meeting Announcement.
Our VIP chart shows us a very bearish outlook for the Mini-Russell
heading into tomorrow, but remember we may see some sideways and consolidation
ahead of FOMC, but we will be ready for anything just like always.
heading into tomorrow, but remember we may see some sideways and consolidation
ahead of FOMC, but we will be ready for anything just like always.
The 4-day relationship is very bearish on this chart, and the
closing-print near the lows tells us that the sellers never gave up control
today throughout the entire session.
closing-print near the lows tells us that the sellers never gave up control
today throughout the entire session.
Tomorrow I am looking to start selling short with an opening-print
below 1117.5 with a profit-target below me at 1105.3 and 1100.0 big-round-number.
below 1117.5 with a profit-target below me at 1105.3 and 1100.0 big-round-number.
If we get an opening-print tomorrow morning above the 1144.5
highs from Monday I will buy pullbacks using our wave-pattern long with a profit-target
up at 1163.3 highs from Friday and 1180.1 previous week’s highs.
highs from Monday I will buy pullbacks using our wave-pattern long with a profit-target
up at 1163.3 highs from Friday and 1180.1 previous week’s highs.
Anchor Chart:
 |
| Mini-Russell Anchor Chart 1 |
The anchor chart of the Mini-Russell gives us more bearish
clues ahead of tomorrow’s trading session.
clues ahead of tomorrow’s trading session.
We are below all the key moving-averages and have an
easy-to-see bearish trend on the anchor chart.
easy-to-see bearish trend on the anchor chart.
We have a support level below us at 1121.4 and 1119.6 which
we will use as profit-targets for the selling opportunities we see tonight and
into tomorrow.
we will use as profit-targets for the selling opportunities we see tonight and
into tomorrow.
 |
| Mini-Russell Anchor Chart 2 |
I always want to sell at a PREMIUM, and right now the Mini-Russell
is trading at a ‘discount’ being at its lows of the most recent retracement. I would like to see the Mini-Russell move
higher back into resistance overhead so I can sell it short with a bigger profit-target
and some resistance to protect the trade.
is trading at a ‘discount’ being at its lows of the most recent retracement. I would like to see the Mini-Russell move
higher back into resistance overhead so I can sell it short with a bigger profit-target
and some resistance to protect the trade.
We always want to sell at a premium and buy at a discount, so
wait for the Mini-Russell to retrace off these lows, and when we head lower
again then I am in a perfect spot to get short!
wait for the Mini-Russell to retrace off these lows, and when we head lower
again then I am in a perfect spot to get short!
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