Monday, September 29, 2014

Stay Patient on Tuesday | SchoolOfTrade Newsletter 09/29/14

“Successful and unsuccessful people do not vary greatly in their abilities. They vary in their desires to reach their potential.” –John Maxwell
Notes for Tonight’s Newsletter:
·       Markets are telling us to ‘stay patient’ for the best trading opportunities on the last day of September
·       Markets are all bearish, most of them over-sold
·       Crude Oil ready to sell at the highs of the range after moving higher on Monday
·       Gold trade triggered last Thursday and still waiting for new lower-lows or a re-test of the highs.  Currently sitting in the middle of the range
·       Mini-Russell trades sideways in oversold territory, staying patient to sell the highs of the range
·       ECB Announcement is Thursday
·       Non-Farm Payroll report is Friday

·       Fundamental:  Gold prices have been trading sideways just above the critical $1200/oz level which is only a few points away.  We know that the ‘breakeven point’ for the mining industry is that $1200 level so there will be plenty of buyers entering there to protect that level.  Demonstrations in Hong Kong, the un-easy situation in the Ukraine, and of course the ongoing soap opera in the Middle East continue to give buyers are reason to get involved, but we can clearly see the violence around the world has done very little to make these price RISE… as of today we are still very bearish until the conditions change.
·       TechnicalGold tested the highs of the range last Friday and gave us easy selling opportunities off the highs going into the end of the month.  That move off the highs put us in the middle of the range, which tells us to stay patient if you are looking for new selling opportunities.  If you missed the short at the highs, your next option for selling opportunities will be back up at the highs, or a new sell-zone after a new lower-low.

Crude Oil:
·       Fundamental:  The slowing global economy has been weighing on the price of Crude Oil Futures over the last 3 weeks because traders believe it will drop the demand of this commodity, but as we go into the end of the month there is increasing concerns over China, the Middle East, and basically everywhere EXCEPT the US economy which appears to continue pushing forward in the recovery process.  We will remain bearish fundamentally on Crude Oil until something changes.
·       TechnicalCrude Oil traded lower over the last 3 weeks, but last week we started consolidating around the $93.00 level.  We have a well-defined trading-range from $95.00 - $89.00 and we are looking for selling opportunities at the highs of this range with profit-targets down at the lows.  We have given the bearish long-term-trend the benefit of the doubt and will continue to look for selling opportunities until something changes, such as new higher-highs above the 94.80 on Tuesday.

·       FundamentalThe global economy is struggling as we go into the end of the 3rd quarter.  The US seems to be ok, but Europe, the Middle East, and Asia are all dealing with substantial financial concerns.  China has the biggest hurdle right now, and if the economy continues to struggle in China that will continue to weigh on the small-cap Mini-Russell Stock Index Futures.  We continue to stay bearish on the Mini-Russell until the charts tell us different.

·       TechnicalThe Mini-Russell had a great run over the last 3 weeks, pushing to new lows before consolidating just above the $1100 big-round-number.  We are considered ‘oversold’ on our anchor charts, which tells us to stay patient on Tuesday/Wednesday and look for the best selling opportunities up around $1130.00 area on the chart.

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