Tuesday, September 30, 2014

Fresh Sell-Zones for Wednesday | SchoolOfTrade Newsletter 09/30/14

“Would you like me to give you a formula for success? It’s quite simple, really; Double your rate of failure. You are thinking of failure as the enemy of success. But it isn’t at all. You can be discouraged by failure or you can learn from it, so go ahead and make mistakes. Make all you can. Because remember that’s where you will find success.” - Thomas J. Watson 
Notes for Tonight’s Newsletter:
·       Another incredible trading session today!
·       Last day of the month, and last day of the 3rd Quarter of 2014
·       Gold continues to push lower, approaching $1,200/oz
·       Crude Oil dropped $3.00 today, providing easy selling opportunities off the highs we mentioned in Monday’s Newsletter
·       Mini-Russell made new lower-lows today, which gives us NEW selling opportunities tomorrow as the global slowdown has investors taking profit on the small-cap stocks in the US. 
·       Red-Star News in Asia this evening starting at 7:50pm from Japan
·       Red-Star News in Europe starting at 3:45am from France/Germany
·       Red-Star News in the US session at 10:00am Wednesday
·       Crude Oil Inventories Wednesday at 10:30am EST, Crude Oil traders should use caution tomorrow.
·       ECB Report Thursday morning, US Non-Farm Payrolls Friday Morning

·       Fundamental:  Gold is rising because the US-Dollar is very strong right now, and Gold has a negative correlation to the Dollar-index.  The US Dollar is strong because the currencies in Europe and Asia are very weak.  The currencies in Asia and Europe are weak because of struggling economies.  The ECB has a big issue with deflation so they are introducing more stimulus measures which will push the Euro even lower, and thus the dollar-index is will continue to rise higher and push Gold lower.
·       TechnicalWe are watching for major support at the $1200/oz level which is only 8-points lower at this time.  Technically speaking, Gold Futures are well oversold and need a correction before long-term sellers will enter the trade again so short-term we are selling retracements on the way down to $1200.

Crude Oil:
·       Fundamental:  The world economy is slowing down quickly and that is affecting the perception of demand for the ‘black-Gold’ which has been keeping prices moving lower for the last 3 weeks.  The strong US-Dollar, combined with this lack of demand has sellers ready for more opportunities to ‘get short’.
·       TechnicalWe are trading at 23-month lows on Crude Oil Futures and after seeing the buyers FAIL to make new highs this week we have very little confidence that there will be a ‘short-covering-rally’ anytime soon.  At this time we are trading inside a sideways-trading-range which means we are selling the highs and taking profit at the lows until we make new lower-lows and can get more aggressive to the short side.

·       FundamentalA sluggish world economy is creating concerns for long-term investors of small-cap companies in the US which has taken the Mini-Russell off its all-time highs, and threatens to continue pushing this price-action lower.  Even the strong US-Dollar can’t help the Mini-Russell right now it appears.

·       TechnicalWe just made new lower-lows on the anchor chart today, which gives us fresh selling opportunities at our sell-zones overhead.  We are trading on top of the $1,100 ‘big-round-number’ so we can expect a little sluggishness to move below that level but we are still BEARISH and will continue looking for selling opportunities.

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