Thursday, September 4, 2014

5 Ways to Trade Non-Farm Payrolls | SchoolOfTrade Newsletter 09/04/14

“Twenty years from now you will be more disappointed by the things that you didn’t do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.” - Mark Twain
Notes for Tonight’s Newsletter:

·       ECB unexpectedly cuts rates, begins purchasing bad-debt from struggling banks in the ECB (also known as Quantitative Easing)
·       Euro tumbles almost 2% compared to the US-Dollar after this news was released @ 7:45am EST today
·       Today’s ADP Employment number comes in lower than expectations, while still above 200k, projecting similar news tomorrow morning from the Non-Farm Payroll report.
·       Gold slips lower to $1,265
·       Crude Oil moves lower, but still stuck in the middle of the trading-range @ $94.50
·       Mini-Russell ends the day slightly lower after moving higher early in the session.
·       Russian tanks still fighting in Ukraine, apparently forgetting their promise to lower violence in that area of the world.  (shocker)
·       Markets consolidating ahead of tomorrow’s BIG NEWS from the US Non-Farm Payroll Report, which is expected to hit 200,000.
·       Non-Farm Payroll Report is released tomorrow (Friday) @ 8:30am EST

·       Long-Term Direction Bias = SHORT
·       Short-Term Directional Bias = SHORT
·       Fundamentals:  strong US dollar, weak Euro, less violence and a LOT of strong economic news in the US is making it hard to BUY Gold futures right now.  These fundamentals are weighing on Gold this week.
·       Daily Chart:  price-action keeps pushing lower, and we have now tested the lows of the price wedge on our daily chart.  we can see the trend-line support is just below us, along with 1254.5 support.
·       32-Anchor Chart:  New lower-lows on the chart tells us the selling opportunities worked perfectly… now hold your trade to your profit-targets below.  If you missed the trade short, now wait patiently for the next entry opportunity up at 1266.8 and 1270.3

Crude Oil:
·       Long-Term Direction Bias = SHORT / NEUTRAL
·       Short-Term Directional Bias = SHORT / NEUTRAL
·       Fundamentals:  strong dollar and less violence in the Middle East are causing downward pressure on Crude Oil Futures, but at this moment it appears traders and speculators are balanced around $95.00/barrel.
·       Daily Chart: we are stuck at the lows of the range, rattling around inside the zone from 95.19 down to 92.98.
·       32-Anchor Chart:  price-action is trading in a very clear sideways-trading-range.  We are focused on buying lows, selling highs, and avoiding the middle of this range around $95.00.  We are still biased to the SHORT-side, so look for selling opportunities at the highs, and take profit at the lows.
·       16-Anchor Chart:  we can easily see this price wedge and we are right in the middle of the range… this is a sloppy/dangerous location for an intra-day trader to look for trading opportunities so stay patient to sell the highs or buy the lows tomorrow.
·       Profit-targets above @ wedge highs, 96.00, 96.59, and 97.18
·       Profit-targets below @   93.60, 93.35, price wedge lows, 92.50 and 91.93

·       Long-Term Direction Bias = LONG / NEUTRAL
·       Short-Term Directional Bias = SHORT / NEUTRAL
·       Fundamentals:  Strong US Dollar makes buying stocks easier, and a weak Euro makes the US equities the best long-term investment.
·       Daily Chart: we tested the sell-zone at 1187.7 earlier this week, and the buyers gave up on trying to push to new highs… telling us to expect price-action to push lower down to the 1154.4 trigger-line and possibly down to the 1121.5 buy-zone at the lows of the range.
·       32-Anchor Chart:  we have now pulled back all the way to the lows of the bullish price channel as well as the 1166.6 buy-zone and a TON of symmetry support.  The buyers need to jump on this now… or the sellers are going to take control below 1160.6
·       16-Anchor Chart:  the 16-anchor is completely opposite to the 32-anchor, which makes this situation increasingly challenging.  The short-term is leaning to the bearish side, while the long term is still (barely) bullish.  We will be waiting to see what Non-Farm Payrolls look like tomorrow morning before we commit to a direction.
·       Profit-targets above @ 1181.0, 1187.9, 1193.8, 1202.8

·       Profit-targets below @ 1160.6, 1157.9, 1150.8, 1148.1

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