Wednesday, September 24, 2014

6 Reasons I am STILL Bearish | SchoolOfTrade Newsletter 09/24/14

“Only those who attempt the absurd can achieve the impossible.”  -Albert Einstein
Notes for Tonight’s Newsletter:
·       Gold trading SHORT continues to make us profit
·       Crude Oil Inventory reversal trade was a big success
·       Mini-Russell gives us easy selling opportunities
·       More disappointing economic news from Europe and Asia
·       Missile attacks begin this week in Syria, target is ISIS.
·       Tomorrow’s Red-Star News @ 8:30am EST expected to move the markets

·       Fundamental:  The Euro move to new yearly lows today after another disappointing news report from Europe (German IFO), which pushed the Dollar-index to new 4-year highs and Gold had no choice but to move lower in correlation.  We are watching the ECB and Beijing closely right now because if they signal more ‘stimulus’ for their struggling economies we will most likely see a sharp RISE in Gold futures.
·       TechnicalGold is clearly bearish on the chart, but we are DEEP into oversold territory so the wise traders are waiting to sell retracements off the new lows.

Crude Oil:
·       Fundamental:  A strong US-Dollar, combined with a very weak economy in both Europe and Asia is causing major concern over DEMAND and consumption of Crude Oil and the price of Crude Oil Futures have tumbled in reaction to this.  On a more bullish note, the US began new aerial missile attacks on the ISIS group in Syria, and this potential unrest in the Middle East may result in a more bullish market-sentiment in the coming weeks.  We will be watching this closely, as of this time nothing to worry about for sellers on Crude Oil.
·       TechnicalTechnically speaking, Crude Oil is bearish in the long-term-trend but this week has been trading sideways and consolidating around the $92-$93 area.  We saw this on Monday morning and have been selling the highs of the ‘range’ all week with great success.  We need to see higher-highs or lower-lows before we can start thinking about a trend in this market, and until that occurs we keep selling highs and taking profit at the lows.

·       FundamentalThe Mini-Russell has been trending higher all year of 2014, but last week we found new concerns about the struggling economies in Europe and Asia, and it appears that small-cap investors have taken ‘profit’ on their Mini-Russell positions and price-action has tumbled off the highs.  Remember, the E-Mini’s love to follow each other, and the Mini-Russell is lagging WAY behind the Dow and the S&P, so we are long-term still bullish but in the short-term it is very clear that profit taking has been the cause of this short-term pullback on the chart.

·       TechnicalWe have recent lower-lows and lower-highs on the chart, which tells us that we are bearish, and our goal is to patiently wait for selling opportunities at our resistance ‘zones’ overhead.  Today (Wednesday) we saw prices FAIL to make new Lower-lows which tells us we may be trading sideways (or higher) on Thursday but our focus will continue to be selling short until the technical clues change.

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