Wednesday, October 15, 2014

5 Ways to Profit from Volatility in the Markets | SchoolOfTrade Newsletter 10/15/14

“Excellence is an art won by training and habituation. We do not act rightly because we have virtue or excellence, but we rather have those because we have acted rightly. We are what we repeatedly do. Excellence, then, is not an act but a habit.” –Aristotle
Notes for Tonight’s Newsletter:
·       Another exciting session of trading opportunities today on Wacky-Wednesday (Wednesday before OPEX)
·       Volume was HUGE today!  NYSE volume was almost DOUBLE the 3-month average!  Insanity! (Did we mention today was Wacky Wednesday?)
·       Gold pushes higher today, breaking and holding above the key resistance at 1239.0, as investors move money from stocks into bonds and Gold to shelter from ‘the storm’
·       In addition to Gold, Bond Yields moved below 2.00% today, first time since 2013, which signals a TON of demand for shelter from falling stock prices.  Low yields mean HIGH FEAR!
·       Crude Oil pushes lower, testing the BIG psychological level of $80/barrel before consolidating into the closing bell.
·       Mini-Russell tried to push lower today, but failed at the lows and traded sideways, providing easy trading opportunities buying the lows and selling the highs.
·       Crude Oil Inventories are tomorrow @ 11:00am EST
·       Crude Oil will likely have contract rollover on Friday 17th, or next Monday the 20th
·       Options Expiration is this Friday, be ready with this tutorial!

·       Fundamental:  Gold is moving higher this week because traders, speculators and long-term investors are worried that the recent slowdown in the global economy is starting to unravel all the gains from 2014 and they don’t want to be caught holding too much of stocks or commodities if these prices keep dropping.  Traders are moving money from stocks and commodities and into bonds and Gold right now.
·       Technical:  Gold is resting just above the key level of 1238.9, and if we stay above this level overnight we have a very good chance to move higher to 1266.1 by end of the week.

Crude Oil:
·       Fundamental: Deflation in Euro and China, Ebola in the airline industry, warm weather projected for this winter, and the slowdown of the global economy is killing the demand for Crude Oil, and with recent news from the Middle East that they would NOT lower production of the ‘black Gold’ we have no reason to see this ending this week, or possibly next!   
·       Technical:  Crude Oil continued to push lower, all the way to $80.00/barrel which is a HUGE psychological level, and with prices down almost 10% in one week we can assume that some profit-taking and consolidation may be in-store for tomorrow.  We see a short-term consolidating range on the anchor charts this evening so we will focus on selling the highs at our resistance zones overhead.

·       Fundamental:  Mini-Russell has been the victim of profit-taking the last 3 weeks and has pulled off the all-time-highs because investors and speculators are worried that the global economy is struggling to stay in positive territory.

·       Technical:  The Mini-Russell has also been falling lower this week, but today it refused to make new lower-lows in the morning session and then closed the day up around the highs to form a clear sideways-trading-range from 1072.0 down to 1038.2.  We are going to stay SHORT on Mini-Russell, looking for selling opportunities at the highs of this range, and taking our profit-targets at the lows.

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