Friday, September 30, 2011

Stick to your day trading Plan! Early losses on Crude, but still hit our goal!



Today is expected to be slow, sluggish, and sloppy at certain of the morning.  There will be times of great opportunity and we will need to be patient to wait for them.
Today is the last day of the month, the quarter, and the fiscal half-year.  So major fund managers, major institutional traders will be sitting on hands this morning as they wrap up their month/quarter.


























800am EST
Our first clue today is from the dollar index (DX 12-11) and we see a strong bullish trend on the short term of the dollar, and this tells us day traders that the short side of the trades will likely be higher percentage this morning.
825am EST
Crude Oil futures are giving us some easy clues this morning:
-          Inside Day Transition
-          Price Wedge
-          Sideways Range
The inside day, sideways range and the price wedge both tell me to buy the lows, sell the highs, and avoid the middles.
So all three clues tell me to expect the fake-out breakouts.  As price falls I'm looking to buy first, then sell new lower lows with retracements.  As price rises I'm selling at resistance and then buying pullbacks with new higher highs.
If price falls I'm I'm going to buy the wedge lows and the PLOD as support.  If price breaks through that support we turn into an OUTSIDE DAY, which means we start selling retracements with new lower lows.
The price wedge reminds me to expect the fake-out break with lows below the PLOD, so that will be on my mind when we push below the PLOD.  If sellers are too strong we then will sell retracements, but we know what to be looking for.
I will then sell retracements down to the next major support levels at 80.50, 80.00 and 79.64.
If price rises I'm then moving towards the middle of the range, so don’t trade the middle, trade the highs or the lows of the wedge and the range.
I will sell the wedge highs, sell the resistance above the wedge highs at 83.00, 83.25, 83.30, 83.75, 84.00 and 84.50 above it.
Again, the price wedge reminds me to sell as price rises above the wedge, expecting to see the fake-out breakout. 
925am EST
We’ve had a profitable morning so far.  We are aware of the situation (end of month and quarter) so we are staying patient for the best trading opportunities today.
Gold Futures gives us three clues this morning:
-          Price Wedge
-          Inside Day
-          Bear Channel (short term)
This is the same personality traits we saw on crude oil, except for the channel.
As price falls I'm buying the wedge lows and the support below the wedge lows first, and then with this bear channel I will sell with new lower lows using a retracement.
We can assume the sellers will be in full control below 1611.3 so we’re looking to buy as price falls down to this level of support.
If price goes even lower, we then sell retracements, taking profit at the next major levels of support below, including the PLOD 16.02.2 and channel lows.
If price rises I'm buying the lows of the wedge, taking profit at the bear channel highs, and then selling the highs of the bear channel.
If price breaks through the bear it will go to the BMT so beware a sloppy market around the BMT.
I will sell resistance at 25.1, 26.6 and 29.2 and will avoid trading around the OPEN at 27.4
945am EST
We’re having a GREAT Friday at this point, sold the bear channel highs on gold, traded the lows buying the wedge lows on the crude oil, and now we’re trying to stay patient and wait through this 945am and 955am news.
Remember to keep an eye on the clock after 1030am today looking for the volume to slow down ahead of the 11am hour.
Euro Futures gives us a very different look than the crude and gold:
-          Outside Day
-          Bear Price Channel
-          Bear Price Wedge
-          US Dollar Index is rising (bullish)
The rising dollar tells me that selling the euro will be the higher percentage trades.
Outside day and the bear price channel tell me to sell new lower lows with retracements, and to expect the sellers to be in control.
Price Wedge tells me to buy the lows of the wedge, sell the highs, and avoid the middle.
We are currently (955) at the middle of the wedge, so be careful.
1050am EST
Market personality is getting very slow and sloppy, just as we expected.
We need to pick our spots wisely b/c time is not on our side.  Later we go, sloppier it will be.
Crude Oil failed to break new highs above the PLOD, and tumbled back down to an outside day again < PLOD.
This is a very bearish sign on crude oil, and then we have the dollar rising in its bull channel so the negative correlation also makes sense for price to be bearish.

Another easy wave pattern for our Fast Track Method!

Hi Guys,

Just about to finish up a great week of trading with a perfect wave pattern short on crude oil futures and wanted to share this with you.

Notice the price wedge we see formed earlier this morning, and then we break the lows of the wedge with a strong move down, followed by a retracement off the lows into our trigger line (yellow) for the perfect placement and structure for this entry short.

What makes this so perfect?

Notice the level of the retracement, its still BELOW the most recent swing-low around 80.00 from 945am this morning.
The key to selling a breakout on the price wedge is exactly this structure.  Trade management is easy on the fast track method place your stop at the swing-high, your target at the swing-low and let it run for an easy 30 ticks of profit per contract.
We are going to review this specific pattern with our members in Monday’s training, so don’t miss it!
See you Monday @ 730am in our live trade room!

Trade the News Market Internals update at 12:00ET

Dow -78 S&P -11.7 NASDAQ -22

***Economic Data***

- (IN) India Q2 Current Account: -$14.1B v -$10.8Be
- (CL) Chile Aug Unemployment Rate: 7.4% v 7.6%e
- (PD) Poland Sept NBP Inflation Expectations: 3.8% v 4.2% prior
- (SA) South Africa Aug Budget Balance (ZAR): -5.4B v -5.2Be; Trade Balance: -3.7B v -1.7Be
- (US) Aug Personal Income: -0.1% v+ 0.1%e; Personal Spending: 0.2% v 0.2%e
- (US) Aug PCE Core M/M: 0.1% v 0.2%e; Y/Y: 1.6% v 1.7%e; PCE Deflator Y/Y: 2.9% v 2.9%e
- (CA) Canada July Gross Domestic Product M/M: 0.3% v 0.3%e; Y/Y: 2.3% v 2.3%e
- (BE) Belgium Q2 Final GDP Q/Q: 0.5% v 0.7% prelim; Y/Y: 2.3% v 2.5% prelim
- (BR) Brazil Aug Nominal Budget Balance (BRL): -17.1BB v -5.0B prior; Primary Budget Balance: 4.6B v 5.1Be; Net Debt to GDP Ratio: 39.2% v 39.2%e
- (US) Sept Chicago Purchasing Manager: 60.4 v 55.0e
- (US) Sept Final University of Michigan Confidence: v 57.8e
- (US) Sept NAPM-Milwaukee: 55.4 v 57.2e

- A worrisome US personal income report clouded over two mildly positive September economic data reports this morning. The Chicago PMI data was pretty solid, with a better-than-expected headline figure and the highest new orders subcomponent since April. The final reading of the U of Michigan Confidence reading was a bit higher than the preliminary number, indicating consumers may only be fearing stagnation rather than further declines in the economy. However the August Personal Income data showed that incomes fell for the first time in nearly two years as the job market was still weak, even as spending still made another incremental gain. Not even Fed governor Bullard's comment that the Fed could decide to take additional easing measures if the economy weakens seems to be able to pull equity indices out of the dumps. In Europe, markets wilted in the face of uncertainty about the ability of Slovakia's parliament to pass the EFSF revisions. Some key commodities are under pressure once again including copper and grain markets. Treasury markets some early bids evaporate but money is still finding its way to the relative safety of US and German government bonds. The US 30 has bounced 2 points pushing the yield back below 3%.

- Micron Technology saw a substantial loss in Q4 thanks to a collapse in gross margins from the steep decline in DRAM prices. Adding weight to the company's shares, Micron warned that an unfavorable outcome to the Rambus antitrust case could have a material adverse impact on Q4 results. Manufacturer Ingersoll-Rand cut its Q3 and FY11 profit outlook due to weakness in its North American residential and commercial security markets. Lumber Liquidators trimmed its FY11 guidance after acquiring the assets of Sequoia Floorings. There were reports that the Japanese banking regulators were investigating Citigroup Japan due to insufficient disclosures on product sales, with charges expected as early as October. The sale of BP's Argentina units to CNOOC is said to be on the verge of breaking down. BP began negotiations with CNOOC over the unit, valued at £6B, back in July.

- The euro maintained a defensive tone through the New York session and broke through the 1.3480 level where earlier sovereign bids were said to be lurking. Dealers again noted Fibonacci daily support in the pair at 1.3410 which corresponded to the 50% retracement of the 1.1875 June 2010 low to the 1.4939 May 2011 high in the pair. Dealers are eyeing the weekend release of the China PMI as a big factor. Another disappointing number is could accelerate risk aversion trading.

***Looking Ahead***

- (CO) Colombia Central Bank Interest Rate Decision: Expected to leave the Overnight Lending Rate unchanged at 4.50%
- (FR) French President Sarkozy meets Greece PM Papandreou
- 11:00 (US) Fed's Bullard to Speak in San Diego
- 11:00 (EU) EU President Van Rompuy
- 12:00 (GE) German Chancellor Merkel speaks at Regional CDU Conference in Schleswig-Holstein
- 12:00 (CO) Colombia Aug Urban Unemployment Rate: 11.2%e v 11.3% prior
- 13:00 (EU) EU President Van Rompuy

This information was brought to you courtesy of TradetheNews.com, for your free trial Click Here

Use our Divergence Trading Method to increase your odds of success



Divergence Day Trading Method:
Uses multiple timeframes and our divergence indicators to find the highest percentage trades.
Multiple timeframes:  I use my slower timeframes to find the most important price levels/locations.
Divergence Indicator:  used on multiple timeframes, and when the signal fires we know to look closely for a high percentage trade.
The keys to success with this method:
-          Look for divergence ONLY at the major levels of support and resistance.  Look for signals at the extremes, and NOT in the middles.
-          Always use a price pattern to enter the trade when you see the divergence
-          Always use your entry rules
-          There are two types of divergence, minor and major, we want to stay patient for the MAJOR divergence.
-          Slower timeframes are more powerful
o   Example:  13range Divergence is  not as strong as a 89range divergence
What session do we use?  12am start/12am stop (24 hour chart) I do not use Gap Charts
Hotkey Trend Channel Tool = ctrl +2

Traders end the quarter with personal spending and consumer sentiment news



---------------------------------------------------------------------------------------

The James' Report:  Professional Resources for Professional Traders

---------------------------------------------------------------------------------------

- Crude Oil Futures trading at Thursday’s Low, middle of larger range, inside day transition, buy this support @ PLOD and wedge lows

- Gold Futures trading in the middle of Thursday’s range, inside day, above highs of bear price channel, looking to sell short below PLOD, beware the narrow price wedge and fake-out breakout around the PLOD

- Euro Futures trading below Thursday’s lows, outside day, in the middle of the larger range, looking to buy at major support on the way down to 3357.

- Mini Russell Futures trading in the middle of Thursday’s range, inside day, beware the narrow price wedge, wait for the breakout, beware of failures.



- Markets in defensive mode with many market participants on the sideline due to month-end, quarter-end and fiscal half-year end conditions.

- Traders expect to see lower than expected Consumer Spending today in the US

- US Investors on the fence about the new ‘Buffet Rule’

- European shares tumbled in the session and seem on track to register the worst quarter since 2008 amidst global economic turmoil. Cyclical stocks declined led by luxury automakers such as BMW. Miners also continued to lose.

- China Sep PMI unchanged from Aug reading but third consecutive month of contraction. 

- QE3 increasingly coming back into the picture

 - Asian currencies have worst month since 1997 crisis as Asian equities experience largest quarterly drop in three years

- Euro Zone flash CPI estimate at 3.0% and likely removes the chance of an Oct rate cut

- China PBoC commented that its inflationary pressures wereeasing, but remained at 'high' levels.

---------------------------------------------------------------------------------------

Today's Economic News:

Day traders will be watching for Consumer Spending and Personal income this morning as clues to the NonFarm Payroll report next Friday.  Today is the last day of the quarter and the month, and most major money managers will be sitting on the sidelines.

We begin our day with news 830am Personal Income/Personal Spending, which will hopefully be out of expectations to give us some action early today.  We then go through the US Open at 930am and we have 945am Chicago PMI followed by 955am Consumer Sentiment, both very important news events.  The market reaction to these events around 10am this morning will tell us how the end of this morning session will go.  We expect Friday’s to be slow and sloppy after 11am, we will start looking for signs of slowdown after 1045am today, and we need to have a REALLY good reason to be trading after 11am due to low volume, low ATR, and the end of month ‘impulse’ trades.



---------------------------------------------------------------------------------------

Looking at the Charts:

---------------------------------------------------------------------------------------

Our first clue this morning comes from the dollar index, a strong up trend, which means our bias is to the SHORT SIDE this morning, until that changes.




Crude Oil futures are giving us some easy clues this morning:

-        Inside Day Transition

-        Price Wedge

-        Sideways Range

The inside day, sideways range and the price wedge both tell me to buy the lows, sell the highs, and avoid the middles.

So all three clues tell me to expect the fake-out breakouts.  As price falls I'm looking to buy first, then sell new lower lows with retracements.  As price rises I'm selling at resistance and then buying pullbacks with new higher highs.

If price falls I'm I'm going to buy the wedge lows and the PLOD as support.  If price breaks through that support we turn into an OUTSIDE DAY, which means we start selling retracements with new lower lows.

The price wedge reminds me to expect the fake-out break with lows below the PLOD, so that will be on my mind when we push below the PLOD.  If sellers are too strong we then will sell retracements, but we know what to be looking for.

I will then sell retracements down to the next major support levels at 80.50, 80.00 and 79.64.

If price rises I'm then moving towards the middle of the range, so don’t trade the middle, trade the highs or the lows of the wedge and the range.

I will sell the wedge highs, sell the resistance above the wedge highs at 83.00, 83.25, 83.30, 83.75, 84.00 and 84.50 above it.

Again, the price wedge reminds me to sell as price rises above the wedge, expecting to see the fake-out breakout. 



Gold Futures gives us three clues this morning:

-        Price Wedge

-        Inside Day

-        Bear Channel (short term)

This is the same personality traits we saw on crude oil, except for the channel.

As price falls I'm buying the wedge lows and the support below the wedge lows first, and then with this bear channel I will sell with new lower lows using a retracement.

We can assume the sellers will be in full control below 1611.3 so we’re looking to buy as price falls down to this level of support.

If price goes even lower, we then sell retracements, taking profit at the next major levels of support below, including the PLOD 16.02.2 and channel lows.

If price rises I'm buying the lows of the wedge, taking profit at the bear channel highs, and then selling the highs of the bear channel.

If price breaks through the bear it will go to the BMT so beware a sloppy market around the BMT.
I will sell resistance at 25.1, 26.6 and 29.2 and will avoid trading around the OPEN at 27.4





---------------------------------------------------------------------------------------


I’m always improving this prep, I appreciate your feedback, please post it here!

Thursday, September 29, 2011

Price Reversal Pattern & Fast Track Profits trading Gold Futures



800am est
The US Dollar Index is trading sideways this morning with a wedge pattern developing.
We know the sideways range tells us there is no directional bias, and the price wedge alerts us to potentially sloppy and slow price action on the markets we trade.












830am est
Gold Futures trading inside the range from Wednesday with a price wedge.
Our three price structures on Gold:
-          Inside Day
-          Price Wedge
-          In the middle of the range
Our plan of attack is simple:  as price rises to resistance we look for selling opportunities at the highs of the wedge and the highs of the range.
If price falls to the lows, we will buy the lows of the wedge and the range lows.
As long as we are within the previous day’s trading range we will fade the breakouts, selling as price rises and buying as price falls.
900am est
Crude Oil Futures are looking very familiar today, we’ve seen this structure before:
-          Price Wedge
-          Inside Day
-          Sideways Range
This is going to be easy to find the best locations, the hard part is simply waiting for price to move higher or lower.
If price rises im selling at the highs of the wedge and the highs of the range.  Selling PHOD as resistance and then buying pullbacks above the resistance.
If price falls I’m buying at the lows of the range and the wedge.  I will buy the PLOD as support and the sell retracements below the PLOD as resistance.
945am est
We sold the highs of the channel on gold for a fast track winner, and we then wait for the major support levels to break for re-entry to finish the move.
Mini Russell price structures are as follows:
-          Inside Day
-          Bear Price Channel
-          Price Wedge
Inside day and price wedge tell me to sell as price rises, and buy as price falls.  The Bear channel gives me a directional bias.
If price rises im selling at the wedge and channel highs, selling at major resistance, and selling the PHOD at 685.4
If price falls im buying the lows of the wedge, the lows of the range, and the PLOD 646.6.  as price falls im looking for buying opportunities at major support.
Avoid the middle of the wedge, the BMT, and trading short with oversold, and long with overbought.
1000am est
Gold is in the middle of the price wedge, lets wait to buy the lows above 1612.6, sell the highs  around 1630-33.0
1100am est
Market personalities are slowing down, as we expected since we had big 830am news this morning.

Mini Russell Futures; Here’s a classic example of an Inside Day, Price Wedge, and a Wave Long Failure

Price moves to the highs of this price wedge with a simple wave pattern long.  You won’t take the wave long because you would be buying into the highs, so you mark the swing low (conveniently below the BMT) and then when price breaks the swing low momentum is falling and we jump in short.
89Range Russell Futures
Trade management is simple with the Fast Track Method.  Stop is at the swing highs, and the target is all the way at the lows of the wedge which is also the PLOD.
This is one of the highest percentage patterns you will see.  Wave patterns are great, unless they are at the highs of the wedge in this case, so its easy to skip the buy, wait for the failure, and then knowing how a price wedge and inside day works, its very easy to hold this trade all the way to the lows.
This is our Fast Track Method applied to an 89-Range chart, which means this would be classified as a ‘position trade’ because it is 1 trade taken with the intention on holding it during the day, but not overnight to help lower margins.
We see these types of trades 10 times a week, so come join me in Monday’s training and we will review this pattern, and many other with our members!
Hope it helps!  Post your comments below!

Trade the News Market Internals Update at 12:00ET

Dow +155 S&P +10 NASDAQ -3

***Economic Data***

- (BR) Brazil Aug Central Govt Budget (BRL): no est v 11.2B prior
- (BR) Brazil Sept FGV Inflation IGP-M M/M: 0.7% v 0.6%e; Y/Y: 7.6% v 7.5%e
- (IR) Ireland Sept Consumer Confidence: 53.3 v 55.8 prior
- (CL) Chile Aug Industrial Production Y/Y: 1.7% v 0.0%e; Industrial Sales Y/Y: 2.9% v 2.1%e
- (CL) Chile Aug Total Copper Production: 427.4K v 373.5K tons prior
- (CL) Chile Aug Retail Sales Y/Y: 9.1% v 10.5%e
- (PD) Poland Q2 Current Account: -€3.4B v -€2.6Be
- (US) Q2 Final GDP Q/Q Annualized: 1.3% v 1.2%e; Personal Consumption: 0.7% v 0.4%e
- (US) Q2 Final GDP Price Index: 2.5% v 2.4%e; Core PCE Q/Q: 2.3% v 2.2%e
- (US) Initial Jobless Claims: 391K v 420Ke; Continuing Claims: 3.73M v 3.73Me
- (CA) Canada Aug Industrial Product Price M/M: +0.5% v -0.5%e; Raw Materials Price Index M/M: -3.2% v 2.5%e
- (US) Aug Pending Home Sales M/M: -1.2% v -2.0%e; Y/Y: 13.1% v 6.3%e
- (US) Weekly EI Natural Gas Inventories: +111 BCF v +100 BCF to +105 BCF expected

- The slightly-better-than-expected final Q2 GDP reading and the decline in weekly jobless claims goosed markets higher on both sides of the Atlantic this morning, adding further shine following Germany's passage of the EFSF. The second reading of Q3 GDP was +1.0%, making the final revision a non-trivial increase, while the initial claims number hit its lowest level in five months. Note that Fed Chairman Bernanke's comment that the Fed would respond with more measures if inflation expectations fall too low also had an impact this morning. However the feel-good gains from this morning have given way to some selling led by what are now declines in the NASDAQ. Note that metals and energy were not big participants, and spot gold barely budged off the $1,615 level where it closed yesterday afternoon. Copper remains not far from recent one-year lows. Crude futures are mostly unchanged as well. Fed Governor Plosser repeated his dissident views this morning. He insisted that the Fed would likely need to raise rates before 2013 and downplayed worries about inflation, warning that TIPS have been distorted by flight-to-quality buying. The US 10-year yield remains near 2%.

- In equity news, AMD gave investors a dim preliminary look at its Q3 results. The company warned that its revenue growth would be considerably less than expected, with gross margins also lower. The company said the weak outlook was primarily due to issues related to new technology rollouts in 32nm manufacturing. Multiple analysts cut ratings on the name overnight, however one or two also called the move a big buying opportunity. AMD remains down nearly 11% in early trading. Mosaic reported results that were right in line with recent guidance. The firm was very bullish on fertilizer markets worldwide and dismissed concerns that economic weakness would diminish agricultural commodity demand. Nevertheless, shares of Mosaic have sank all morning, with MOS down 5%. Heavy automobile parts maker Titan boosted its FY11 outlook, saying that it is also looking forward optimistically to FY12. TWI is up more than 10%, but are around +5% mid morning.

- EUR/USD slid off its best levels following the German parliamentary passage of the EFSF expansion. Dealers noted that the price action was driven by classic "buy the rumor, sell the fact" thinking. Chancellor Merkel did manage to garner a majority vote without the need of any minority support as only 13 members of the coalition government defected, well within the 19 member cushion. USD/JPY was inching higher toward the 77 handle but remained contained within recent ranges. Repatriation flows from the end of the Japanese fiscal-half year should continue to be a factor in the cross.

***Looking Ahead***

- 11:00 (US) Sept Kansas City Fed Manufacturing. Activity: No est v -2.0% prior
- 13:00 (PD) European Financial and Government Conference
- 13:00 (SA) South Africa Fin Min Gordhan speaks
- 13:00 (US) Fed's Lockhart speaks in Atlanta
- 13:00 US) Treasury to sell$29B in 7-Year Notes
- 14:50 (US) Fed Rosengren
- 19:00 (SP) Deadline for Spanish Lenders to complete recapitalization

This information was brought to you courtesy of TradetheNews.com, for your free trial Click Here

Best way to send Joseph your trading results



Best way to send Joseph your trading results. 
This is perfect for anyone who needs help being held accountable for following entry/exit rules, as well as learning when to take the best patterns.
Day #1 you join as a new member.
-          Set up your charts using our indicators, etc
o   Full time support team will help as much as you need them
-          Learn our 3 Price Patterns
-          Morning routine
-          Trade Management
-          Fast Track Method
o   Simplified version of the Advanced Method
§  Less trade management
§  Fewer trades per day
·         Wait for the best trades
§  Waiting for the perfect patterns
§  Teaches you how to wait patiently for the best patterns
§  Teaches you to commit to your trades
§  It tells you EXACTLY what to do, and when to do it.
§  These specific instructions are what our new traders need to be successful.
o   Work with me to review those trades every day, every week, whatever pace you wish to use.

Perfect Wave Pattern
I do not use Volume bars, you will need to add a volume indicator to the chart. (VOL)
Time stops on the euro?  We can use them on any market.  The more liquid the marker, the longer your time stop will be.
Also, the slower the timeframe you are using for the entry pattern the longer the time stop.
Crude Oil = time stop is around 30 seconds (5 second rule)
-          ES = time stop will be 2 minutes
-          Euro = time stop will be 2 minutes
-          Scalp trade my time stop is 30 seconds.
-          Swing trade my time stop can be up to 24 hours
Dollar Correlation was broken this summer b/c of all the low volume and FEAR in the markets, however, we will start using it again every day.
Which of our patterns would be the best to avoid bad entries?
-          Wave Pattern is the most efficient way to enter a trade.
-          Your selling when price is moving higher, it gives you liquidity and protects your position with the overhead resistance from the trigger line.