Forex Calls Recap for 12/28/10
Two winners, including one that is still on at the moment, on the EURUSD as we finally traded average range again. Too bad it was in both directions instead of just one, but I'll take it.
New calls tonight and Chat again. Probably not much after tomorrow.
EURUSD:
I was half size still, so the early long trigger at A was quarter size for me. Hit first target at B, raised stop and stopped at C. In the morning, the short set the trigger at D, triggered at E, and hit the first target at F. Still holding short with stop over Pivot entry:
GBPUSD:
Stock Picks Recap for 12/27/10
With each stock’s recap, we will include a (with market support) or (without market support) tag, designating whether the trade triggered with or without market directional support at the time. Anything in the first five minutes will be considered WITHOUT market support because market direction cannot be determined that early. From the report, CSTR triggered short (without market support) and worked well on a spike, but then came back: CAKE triggered short (without market support due to the opening five minutes) and worked just enough for a partial: SYMC triggered short (without market support due to the opening five minutes) and didn't work: In the Messenger, AMZN triggered short (without market support) and worked great: Rich's CMG triggered short (without market support) and didn't work the first time: His BIDU triggered short (without market support) and worked: His AAPL triggered short (without market support) and worked great: His GM triggered long (with market support) and worked: So there were a lot of triggers, but most without market support (though NQ's were down while ES was up). Only one triggered with market support, and it worked fine.
Forex and Stock Market Preview for Last Week of December
Cautioning traders about rough environments has been one of the cornerstones of Tradesight's approach over the last decade. A lot of newer traders get so excited about trading that they don't recognize that not all days are equal and provide equal opportunities. The Holiday season is one of those periods.
While we saw some light action last week, the outlook for the final week of the year is even worse, though it might not be apparent to the novice's eye. Some people assume that the banks have shuffling left to do for the rest of the year, but the reality is that most of that is done. In the stock world, the funds and banks have the positions that they want to show for their end of year statements. They can't move massive positions in a day or two, so they can't wait until December 31. All they want at this point is price stability.
Add to that the fact that a lot of retail traders are on vacation, and this year, much of the East Coast is blanketed in the worst blizzard in half a century, and there are ample reasons that nothing great will happen. The last week of the year typically sees a 20% drop-off in stock market volume on average from the rest of December, and December so far has only averaged 1.7 billion NASDAQ shares, which is already 300 million lighter than normal. A 20% drop takes us down to 1.5 billion or less. It is often said that 800 million shares of trading volume each day is just institutions trading back and forth to each other with automated trading, so the real difference between a 1.4 billion share day and a 2.0 billion share day (the average over the last few years) is really the difference between 600 million and 1.2 billion in real trading, and that's a big difference. You don't see good trading activity without the volume.
Meanwhile, in the Forex marketplace, activity is about the banks, and the reality is that even though the United States doesn't know how to relax and take a day off, the rest of the world does, and much of the rest of the world is just as relevant to overall activity and volume. US rules state that the US Stock Market and Banks must be open on December 31 for a full day unless it is a Saturday or Sunday. This is because 70 years ago, people needed the full day to be able to make final adjustments for the tax year. It's an outdated rule, and because of it, we don't close, but we might as well. Let me give you a preview of the week globally.
Monday:
New Zealand, Australia, Great Britain, and Canada all half full day bank Holidays to continue observing Christmas. Without them, the Forex market is not going to be active.
Tuesday:
The same four continue to have bank Holidays. Remember that while New York is active for trading and banking, Great Britain is the center of Forex. Meanwhile, the snowstorm on the East Coast also crushes New York.
Wednesday:
No bank Holidays. There also isn't much for economic data.
Thursday:
No bank Holidays, but it is the day before New Year's Eve and people are already heading out to get where they want to be for New Year's.
Friday:
Japan, Italy, and Germany have bank Holidays for the New Year, although the rest of us, including the US, save the bank Holiday for Monday (even though the stock market will be open).
So realistically, it's Tuesday of next week (January 4) before the world is all back to work, and we might see Forex pick up then. Stocks usually take until day THREE of the New Year, so expect that Thursday, January 6, and it could be to the downside pretty hard if the first three days are up.
Meanwhile, the benefit of being a trader is being able to take time off and enjoy life and family when the markets aren't doing anything. As much as we hope to see you in the Trading Lab, there probably won't be much to see there.
Stock Picks Recap for 12/21/10
With each stock’s recap, we will include a (with market support) or (without market support) tag, designating whether the trade triggered with or without market directional support at the time. Anything in the first five minutes will be considered WITHOUT market support because market direction cannot be determined that early.
QLIK triggered long (without market support) and worked:
FLIR triggered long (with market support) and literally didn't go a dime in either direction, so we won't count it as a winner or loser:
AMED gapped way over the trigger, no play.
In the Messenger, BIDU triggered long (with market support) and worked:
Rich's GOOG triggered long (with market support) and worked:
Forex Calls Recap for 12/21/10
Mixed session again and not much excitement, although some Value Areas did trigger. Ranges were light and that might about wrap it for the year.
New calls and Chat tonight.
EURUSD:
Triggered short early at A and stopped. Triggered at B, hit first target at C, second half stopped:
GBPUSD:
If you properly stagger orders at the triggers, one third of the trade entered at A and stopped. We use order staggering to prevent us from getting into trades for full size that barely sweep the entry level:
EURJPY:
Note the Value Area here, which worked:
GBPJPY:
Note the Value Area here, which worked, high of the session was the Value Area High:
Market Preview for 12/22/10
The SP nudged to a new high on the move and violated but did not break the SEEKER exhaustion signal’s risk level. This “uncle” level is the last hope for the bears. But there is hope for the bears because of the internals of today’s candle. Internally, today’s price action is a range high camouflage sell signal. Price settled higher on the day but closed below the opening level. This pastern setup 5 days ago and led to lower short term prices and a test of the 10ema. A similar reaction should be expected.
Naz was higher by 7 on the day but like the SP posted a camouflage sell signal. This can be a very important nuance at range high.
Multi sector daily chart;
The Put/Call ratio recorded a new low on the year which suggests extreme complacency. This can often be some magnitude of inflection point.
The 10-day Trin still shows that equities are short-term overbought.
The OSX was top gun, closing at a new high not making a new absolute high on the move. The 13 SEEKER exhaustion signal will remain active until the risk level is violated.
The XAU was stronger than the broad market and is 12 days up in the SEEKER exhaustion count.
The BKX is consolidating the 200dma breakout. The more meaningful breakout will be closing above the 51 level (50% fib).
The BTK saw profit taking;
The Dow transports are struggling. Set an alarm for a break under 5000.
The SOX was the last laggard on the day:
Sox
Oil moved towards the high of the range despite the dollar strength:
Gold bucked the buck, up on the day:
COT: 12-17-10
Hi Traders,
Holiday greetings from a sunshiny Tampa Bay!
I hope all’s well and you haven’t lost your mind by visiting the malls and stressing-out over what to buy whom and where to get it for the very best price. And, with this in mind, I’m going to help make things simple and easy for you this year-- I’d feel pretty darn guilty if I didn’t. So, know this: I love and appreciate gift cards to restaurants and even Starbucks. So, PLEASE don’t worry about getting me that “perfect” something; just pop that little card into the mail and, when it comes to me, you’ll be done. I thought you'd appreciate this selfless consideration and, yes, you’re very welcome ;- )
Okay…
It’s a week from the normal two-week break see usually see this time of year, but, as in the past, we’ll likely see activity thin in prior to Friday. This doesn’t mean the market won’t move; if fact, if history is any indication, there’s a great chance we’ll see plenty of tradable swings. It’s just that there will be fewer participants. Here’s what’s happening regarding the COT:
(Get this week's COT charts here)
As I mentioned last week, the specs were buying AUD and might take another shot at the November high vs. USD. And we saw some buying, but nothing to get excited about. Same goes for CAD. Remember, both of these are commodity currencies and China and India need what they’re selling. So, as long as this relationship is in place, it’s good news for CAD and AUD. New Zealand, NZD, on the other hand, another “commodity” currency, hit extreme levels (i.e., the commercials and specs were 180-degree out from each other) and is continuing its slide. For anyone trading the kiwi, this shouldn’t have been a surprise, especially if you followed what I’ve written.
The euro is dealing with its five little PIIGS (Portugal, Ireland, Italy, Greece and Spain); INSERT INTO `wp_posts` (`ID`, `post_author`, `post_date`, `post_date_gmt`, `post_content`, `post_title`, `post_category`, `post_excerpt`, `post_status`, `comment_status`, `ping_status`, `post_password`, `post_name`, `to_ping`, `pinged`, `post_modified`, `post_modified_gmt`, `post_content_filtered`, `post_parent`, `guid`, `menu_order`, `post_type`, `post_mime_type`, `comment_count`) VALUES and keeps getting the snot kicked out of it. Overall, the specs are selling, even though we witnessed a pullback and some consolidation. Based on the charts, it looks like the euro will continue to nosedive. The same goes for the pound, which (like the kiwi); INSERT INTO `wp_posts` (`ID`, `post_author`, `post_date`, `post_date_gmt`, `post_content`, `post_title`, `post_category`, `post_excerpt`, `post_status`, `comment_status`, `ping_status`, `post_password`, `post_name`, `to_ping`, `pinged`, `post_modified`, `post_modified_gmt`, `post_content_filtered`, `post_parent`, `guid`, `menu_order`, `post_type`, `post_mime_type`, `comment_count`) VALUES was extremes not too long ago.
The US dollar has been the benefactor of all the bad news coming out of Europe, so, while its COT chart is a little muddy, I expect we’re going to see more strength as we head into the New Year.
The shiny metals, gold and silver both hit highs not too long ago, but haven’t made new ground recently. When it comes to silver, the commercials are buying and the specs are selling—remember, these two were 180-degrees apart not too long ago, which indicated price would likely turn. Have tops been made in both? Well, if you listen to 99.9% of the population, the answer is a resounding, “NO WAY”. But, personally, I try not to pay too much attention to what everyone is saying, because “everyone”, that is the general public, which includes the media (which includes CNBC); INSERT INTO `wp_posts` (`ID`, `post_author`, `post_date`, `post_date_gmt`, `post_content`, `post_title`, `post_category`, `post_excerpt`, `post_status`, `comment_status`, `ping_status`, `post_password`, `post_name`, `to_ping`, `pinged`, `post_modified`, `post_modified_gmt`, `post_content_filtered`, `post_parent`, `guid`, `menu_order`, `post_type`, `post_mime_type`, `comment_count`) VALUES has amassed quite a track record when it comes to being wrong. So, thankfully, we have the charts. And, as you might agree, “a picture is (or can be) worth a thousand words”.
That’s it for this week. Whatever you celebrate, please enjoy the magic and the spirit of the season. Across the miles, I wish you and yours my very, very best!
Be well and keep living large,
Clay
Stock Calls Recap for 12/16/10
With each stock’s recap, we will include a (with market support) or (without market support) tag, designating whether the trade triggered with or without market directional support at the time. Anything in the first five minutes will be considered WITHOUT market support because market direction cannot be determined that early.
INFY gapped just over the trigger, so no play unfortunately, because it ran another two points after.
PDCO triggered long (with market support) and worked:
In the Messenger, Rich's RIG triggered short (without market support) and worked some:
His AIG triggered long (with market support) and worked:
BIIB triggered long (with market support) and worked great:
Rich's CELG triggered long (with market support) and worked great too:
Rich's AAPL short triggered in the afternoon (without market support and worked a little):
GS triggered short (without market support) and didn't work:
Rich's MA triggered short (without market support, but this was a news/energy play) and worked great:
Adds up to four triggers with market support, and all of them worked.
Forex Calls Recap for 12/16/10
Another winner, plus we closed out the shorts from the last two days for a few hundred pips net. New calls and Chat tonight, but triple expiration tomorrow doesn't get me excited.
EURUSD:
GBPUSD:
Triggered long at A and gave you some time to take it. Hit first target at B overnight. Raised stop in the morning and stopped final half at D. Also, the shorts from the prior session stopped at C well in the money by a few hundred pips:
Using The 24-hour VWAP Tool for Forex Trading
There are a variety of ways to use the 24-hour VWAP (Volume-Weighted Average Price) as we teach it. This is a unique tool to Tradesight in the FX arena (although commonly used in stocks and futures). The importance of the VWAP level as it moves throughout the session can never be overstated.
One of the ways to use the tool is to wait for the market to start to get a move and have it bounce once or twice off of the VWAP. Once that happens, you know that the market has addressed the VWAP for the evening and is using it. This happened last night fairly early on the GBPUSD. Keep in mind that these charts are MST time zone, so two hours earlier than EST.
As you can see here, the GBPUSD got two bounces precisely off of the purple VWAP line at point A, just as it was starting to curl up:
From this point forward, each TOUCH of the VWAP can be traded by then buying if the pair trades above the high of the 5-minute bar that touched the VWAP or shorting if the pair trades below the low of the 5-minute bar that touched the VWAP. So, here's the next touch of the VWAP an hour later, and I've drawn black lines at the high and low of that bar:
In this case, it turns up, and the buy point is the black line, but you can see how it played out, running up about 30 pips and stalling at the Value Area Low level:
About an hour later, we roll back to the VWAP and get another "touch" bar, and I've marked off the high and low again:
The next move takes out the high of that bar:
And that leads to...another run up just over the highs of the prior push and another winner:
SIX HOURS later, the GBPUSD comes back down to the VWAP and touches it. This charts shows the "touch" bar and then the next bar, which triggers to the short side by moving under the black line:
This leads to about a 25-pip move downward to the LBreak level. Note that we get a 9-bar Seeker setup on that move down against the LBreak red line, which coils the spring for the move back up:
And that move back up looks like this:
Very technical action all night on the GBPUSD despite light ranges.