Tuesday, October 7, 2014

6 Ways to PROFIT on Wednesday | SchoolOfTrade Newsletter 10/07/14

“Enter every activity without giving mental recognition to the possibility of defeat. Concentrate on your strengths, instead of your weaknesses… on your powers, instead of your problems.” –Paul J. Meyer
Notes for Tonight’s Newsletter:
·      Markets collapsed today, almost as if they listened to our Nightly-Newsletter!
·       US News was mostly good today, JOLTS report shows more improvement but still work to be done to provide BETTER (not more) jobs for residents in the US.
·       German Industrial Production took a nosedive today, which is a leading indicator that Europe may be headed back into recession as we finish up the year of 2014.
·       Today’s IMF Survey paints a dismal picture for countries trying to dig out of the recession, keeps gold firmly above $1,200/oz.
·       Crude Oil declined $2.00 today to settle down at $88.60
·       Gold moved higher today (not by much) but was able to put together the first 2-day rally since the middle of June, closing just above $1200/oz.
·       Mini-Russell tumbled off the highs today (just as we expected) and made new lower-lows on the session as global equities continue to take a beating.
·       Wednesday’s economic news brings us Crude Oil Inventories at 10:30am and the FOMC Meeting minutes at 2:00pm EST

·       Fundamental:  Today we heard from the IMF, which told us to expect sluggish and un-even growth as we finish 2014 and into 2015.  This news comes as no surprise, and with the recent bad news from Germany this has investors around the world taking ‘shelter from the storm’ using Gold and US-Bonds.  Bad news is good news for buyers of Gold, which is firmly holding about $1,200/oz. and trying to decide where it goes from there.
·       Technical:  Gold is sitting at the highs of the range and ready to collapse if we can get the sellers to get back to work!  We have the big-round-number below as $1,200/oz. and PLENTY of profit-targets to work with as the market pushes lower.  We will be watching closely on Wednesday to see what the price-action is telling us as traders ‘react to move Red-Star News from the China and Europe overnight.

Crude Oil:
·       Fundamental:  We heard from the EIA today, and the Short-Term Energy Outlook tells us that warmer weather is expected for the winter months this year, which is definitely going to help drive the prices of Crude Oil (and Nat-Gas) lower as we head into the beginning of winter.   Today’s IMF Survey paints a dismal picture for the demand of Crude Oil as well, projecting that next year is going to be sluggish for growth… none of this is good news for buyers of Crude Oil right now.
·       Technical:  Crude Oil has been trading inside a consolidating range this week and today we ALMOST broke to new lower-lows but didn’t quite have the ‘gas in the tank’ to get the job done.  This evening we are waiting for prices to either (a) push higher so we can sell the highs, or (b) push to new lower-lows and give us the opportunity to sell a retracement tomorrow morning.  We know that tomorrow is Wednesday, so Crude Oil Inventories are going to put some stress on the price-action but we will be looking forward to the moves after 10:45am EST.

·       Fundamental:  The European economy is possibly headed back into recession, with the most recent bad news coming from Germany.  This bad news is dragging down the rest of the equity markets around the world as investors move their money from Equities and move them into Gold and Bonds.  For this reason, the Mini-Russell price has continued to push lower even as the dollar-index is continues to remain strong. 

·       Technical:  We made new lower-lows today on the Mini-Russell, exactly as we had expected, so tomorrow we are looking for prices to rise in the short-term back up into our new sell-zones so we can keep selling SHORT with the bearish long-term-trend.

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