Monday, January 11, 2010
Nice Day!
I think thats it for today. I'm still watching this YM short on a 15m but with the internals still drifting higher I don't want to go against the grain. We could get an afternoon sell off with metals leading the way but I'm happy to SOH and get at it again tomorrow. So I hope everyone has a good night.
Afternoon volume
E-Mini = 1 million so far. (Light)
NYSE = 569m vs 582m (-2%)
NASDAQ = 1.37b vs 1.42b (-4%)
NYSE = 569m vs 582m (-2%)
NASDAQ = 1.37b vs 1.42b (-4%)
QM Stopped Out
Well it was a nice move down to only see it bounce all the way back up.
We are stopped out of the rest of the postion @ 82.650.
This situation is why I am tracking two different ways to trade the targets. During the testing process, hitting the 1st target and then getting stopped out at breakeven happened quite a bit so I'm using EX-1 to lock in more profits. We shall see which example preforms best in the long run.
Trade Traker has been updated:
Ex-1 = $379
Ex-2 = $179
P&L Totals
Ex-1 = $2,455.00
Ex-2 = $1,935.00
We are 4 out 5 with Ex-1 leading the way.
We are stopped out of the rest of the postion @ 82.650.
This situation is why I am tracking two different ways to trade the targets. During the testing process, hitting the 1st target and then getting stopped out at breakeven happened quite a bit so I'm using EX-1 to lock in more profits. We shall see which example preforms best in the long run.
Trade Traker has been updated:
Ex-1 = $379
Ex-2 = $179
P&L Totals
Ex-1 = $2,455.00
Ex-2 = $1,935.00
We are 4 out 5 with Ex-1 leading the way.
Watching Dow (YM)
We have a short setup coming into play on the mini Dow, but with internals flat and the Dow lagging the rest of the market we might pass on this one. Don't want to give back our morning profits if the market decides to rip back up.
QM Target #1 Hit
NICE!
Target #1 Hit @ 82.250
Move remaining contracts stop to breakeven.
Target #2 is @ 81.900
Target #1 Hit @ 82.250
Move remaining contracts stop to breakeven.
Target #2 is @ 81.900
Crude Trade Entry
Symbol: QM
Chart: 5m
Entry: Sell Stop 82.650
Stop: 83.025
Target 1: 82.250
Target 2: 81.900
Target 3: 81.250
Chart: 5m
Entry: Sell Stop 82.650
Stop: 83.025
Target 1: 82.250
Target 2: 81.900
Target 3: 81.250
Watching Crude
Still tracking short on gold but it is very choppy. Crude has been in a downtrend all morning and is looking like a short play setup on the 5m. Keep an eye on both of these.
QG Target #3 Hit
An excellent first trade to start the week and our first 3rd target winner.
We are out of our final contract @ 5.390.
Ex-1 = $391.50
Ex-2 = $704.00
The trade tracker has been updated.
Current P&L Totals:
Ex-1 = $2067.00
Ex-2 = $1756.00
Lets keep it going!
We are out of our final contract @ 5.390.
Ex-1 = $391.50
Ex-2 = $704.00
The trade tracker has been updated.
Current P&L Totals:
Ex-1 = $2067.00
Ex-2 = $1756.00
Lets keep it going!
Watching Gold
We might have a short setup taking shape in gold. The financials broke lower again before we got and entry. Same as last week. A setup starts to form only to have it runaway before we get the entry.
QG Target #2 Hit
Our 2nd target was just hit @ 5.470.
3rd target is 5.390 if you are trading EX-2.
Very nice start to the week. I'm updating the tracking sheets now.
3rd target is 5.390 if you are trading EX-2.
Very nice start to the week. I'm updating the tracking sheets now.
QG Target #1 Hit
Nice move down in Nat Gas.
First target hit @ 5.515.
Move stop to breakeven on remaining contracts.
Next target is 5.470
First target hit @ 5.515.
Move stop to breakeven on remaining contracts.
Next target is 5.470
QG Entry
Symbol: QG
Chart: 5m
Entry: 5.555
Stop: 5.605
Target 1: 5.515
Target 2: 5.470
Target 3: 5.390
Chart: 5m
Entry: 5.555
Stop: 5.605
Target 1: 5.515
Target 2: 5.470
Target 3: 5.390
Watching Nat Gas
We might have a short play on QG this morning. Waiting to see if the financials bounce and if the metals make a move down.
Swing Furutes Entry
We are putting the long feb hog trade back to work today.
Buy limt on Feb Hogs (HE) @ 66.400
Target @ 69.750
Stop @ 65.300
Buy limt on Feb Hogs (HE) @ 66.400
Target @ 69.750
Stop @ 65.300
Today’s Market Guidance (From Profit Source Futures & FX Research)
Financial Overview:
A distinct range up effort overnight clearly helps the markets get beyond a patently disappointing US Non Farm payroll report from last Friday. However, with the earnings cycle kicking off later today and the Press once again playing up the need for top line growth, the bull camp would seem to be faced with another major test ahead. With the March S&P tracking toward the next even number resistance level of 1150, that could eventually present some type of technically topping threat. However, with the Dow sitting well under the 11,000 even number level on its charts, there would seem to be some moderate upside capacity before the upper end of the market runs into stiff technical resistance. With the March Nasdaq already testing the 1900 level in the early going today, it is possible that the lower end of the market will continue to lead the way higher. With a major brokerage firm overnight upgrading some oil sector issues, it would appear that the commodity/natural resources shares will be providing the market with some added bullish direction in the early action. With the only major economic development today, coming in the form of a Fed Speech just ahead of mid session, it is possible that the promise of lingering low rates will facilitate the bullish bias.
Dow:
The March Mini Dow has managed a definitive upside adjustment in the early action today, with the favorable Chinese export news fostering hope among the small and large cap issues. While the January 5th Commitment of Traders with Options report for Dow Jones Index $5 showed the Non-commercial position to be net long 20,882 contracts, with the Non-reportable position net long 3,870 contracts, and that made the 'combined' spec and fund position net long 24,752 contracts as of early last week, that reading is not so overbought that traders should take control of this market away from the bull camp.
Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The close above the 9-day moving average is a positive short-term indicator for trend. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The next upside target is 10634. The next area of resistance is around 10607 and 10634, while 1st support hits today at 10525 and below there at 10469.
S&P:
The S&P sits just under the potentially critical 1150 even number level in the early trade today. We doubt that a quasi even number level on the charts is capable of capping off the pre-existing entrenched up trend pattern today, especially since the scheduled report slate is empty until the earnings season is kicked off later this afternoon. However, with the January 5th Commitment of Traders with Options report for S&P 500 Stock Index showing the Non-commercial position to be net long 4,922 contracts, with the Non-reportable position also net long 47,802 contracts, and that made the 'combined' spec and fund position net long only 52,724 contracts as of early last week. The record spec and fund long in the S&P is over 110,000 contracts and while the COT figures are probably understated due to the rally forged last week, we just don't think that the market is close to running out of upside buying fuel.
Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The close above the 9-day moving average is a positive short-term indicator for trend. The close over the pivot swing is a somewhat positive setup. The near-term upside target is at 1149.68. The market is approaching overbought levels with an RSI over 70. The next area of resistance is around 1146.87 and 1149.68, while 1st support hits today at 1136.13 and below there at 1128.19.
NASDAQ:
The March Nasdaq has already risen to the vicinity of the even number 1900 level on the charts in the early going today and seeing a rise above that critical chart level early this morning should mitigate concern that the market will run into trouble at that level. The January 5th Commitment of Traders with Options report for Nasdaq Mini showed the Non-commercial position to be net long 53,971 contracts, with the Non-reportable position net long 14,200 contracts, and that made the 'combined' spec and fund position net long 68,171 contracts as of early last week. Therefore the market isn't patently overbought and without the capacity to forge even more gains ahead. Critical support now moves up to 1893 level, with the top of the channel not seen until 1906.
Gold:
With very strong action seen in the Asian gold trade overnight, it is not surprising to see February gold forging a sharp range up trade this morning. In fact, February gold this morning has already risen to the highest level since December 8th off what seems to be a very favorable global macro economic outlook. Apparently a much stronger than expected Chinese export sales figure provided the trade with a fresh bullish view on the global recovery prospects and that report seems to have helped the markets get beyond the US payroll disappointment. It does seem as if the brunt of the buying overnight was the result of the sharp slide in the Dollar, which is apparently seeing a definitive liquidation effort off an increased desire for riskier instruments. While some of the buying interest in gold might be off hopes that leaving US rates low, will allow inflation to gain a foothold, it would not seem like inflation is a front page expectation this morning. However, seeing renewed interest in risky instruments might also rekindle investment interest in gold, which to a degree has been largely missing since the early December highs.
Silver:
With the sharp range up extension this morning, March silver managed to reach the highest level since December 4th. With the March silver contract also tracking toward the even number $19.00 level on the charts, it is possible that some traders will see that level as some form of critical pivot point. With copper and energy prices showing very impressive gains early this morning, it would appear that silver is set to get a lift from classic industrial commodity market action. Therefore, it would appear that silver is at least initially set to benefit from both its financial and physical commodity market standing. With the US economic report slate carrying only a third tier private employment report release this morning and the US earnings cycle not kicking off until late in the afternoon, there would not appear to be much in the way of scheduled news to alter the initial track of sentiment that is in place early this morning.
Crude:
Crude oil has been pushed to a new 15 month high overnight with price support coming from strong Chinese oil demand, a sharp break in the dollar, geopolitical supply risk and concerns over tightening motor fuel supplies. March crude oil took out last week's high on rising global oil demand prospects tied to news that China imported a record amount of oil last month. Oil has also likely seen support from news that China's exports jumped 17.7% in December compared to year ago raising optimism that the macro economic recovery being seen in China may be starting to spread more globally. Crude oil has been able to push aside last week's disappointing US payroll report and instead find price support from the retreat in the Dollar tied to renewed expectations for the Fed to keep interest rates low for some time, which is cultivating a bullish environment for commodities. Rising investor risk appetite tied to a weak Dollar and a higher equity/gold trade overnight is certainly boosting oil's appeal as an alternative investment with some of the buying in oil likely being inflation hedge related. Oil is also being pulled higher by the strength in the product markets with a refinery fire in Canada and glitches at US facilities raising concern over tightening fuel supplies since the US refinery operating rate is already so low. Even though temperatures are forecasted to turn warmer over the next couple of weeks, market focus already seems to be shifting to concerns over spring gasoline supplies. News of a militant attack at a Chevron pipeline in Nigeria that forced a cut in production has added geopolitical supply side risk into the equation. With March crude oil pushing above the $84.20 level overnight, there is little overhead resistance until $85.00 and above there not until $85.90. However, some caution is warranted given that short-term technical indicators are at overbought levels clearly being reflected in the January 5th COT report with options for crude oil showing the combined fund and spec net long position rising to 196,576 contracts as of early last week. In fact, the oil market is closing in on the record combined spec net long position of 203,568 contracts reached in November 2009. In fact the net spec long reading and may have already exceeded the record level given the rally in oil since the COT report was measured which to a certain extent, leaves the oil market vulnerable to profit taking. But since there are a variety of factors stacking up in the bull camp's corner, profit taking breaks in oil are likely to be short lived since the bullish environment for commodities will likely keep funds active buyers on price dips. Quarterly earnings starts this week and seeing companies beat Street estimates could certainly add another bullish element for oil into the mix. Given the oil market's firm bullish undertone, traders should continue to look for buying opportunities on price dips back to support levels.
Natural Gas:
February natural gas has been pushed lower in the early overnight trade on follow through selling from last week tied to a bearish shift in the weather. The strength in crude oil, a weak Dollar and perhaps expectations for a large storage draw down this week may be factors that have so far prevented February natural gas from falling below chart support near $5.50. But with private forecasters predicting a significant warm up in the second half of the month, it looks as if February natural gas likely set a near-term high last week. Temperatures in the Midwest and Northeast are expected to warm up from the frigid conditions seen last week while some weather forecasters have temperatures drifting up into the 40's over the next two weeks leaving downside price risk for natural gas in place. Outside market influences and expectations for a 200 plus bcf drain from storage in this week's inventory report may provide some limited price support to natural gas. There may also be some lingering concern over well head freezing disrupting production. But higher natural gas prices have lifted the number of natural gas rigs in operation to the highest level since last April, and there is the risk that the storage drain from winter fuel demand could be quickly replaced by rising fuel production unless industrial demand starts to recovery and so far there are no signs of that happening. The January 5th COT report with options for natural gas shows a bearish setup with funds adding to their net short position and small traders increasing their net long position leaving the market vulnerable to more small spec liquidation if support levels are violated. Unless the weather outlook turns more supportive again, we can't rule out an eventually retreat in February natural gas back to the $5.30 price level. Overhead resistance comes in near $5.66 then near $5.76 with support near $5.50 then near $5.31.
A distinct range up effort overnight clearly helps the markets get beyond a patently disappointing US Non Farm payroll report from last Friday. However, with the earnings cycle kicking off later today and the Press once again playing up the need for top line growth, the bull camp would seem to be faced with another major test ahead. With the March S&P tracking toward the next even number resistance level of 1150, that could eventually present some type of technically topping threat. However, with the Dow sitting well under the 11,000 even number level on its charts, there would seem to be some moderate upside capacity before the upper end of the market runs into stiff technical resistance. With the March Nasdaq already testing the 1900 level in the early going today, it is possible that the lower end of the market will continue to lead the way higher. With a major brokerage firm overnight upgrading some oil sector issues, it would appear that the commodity/natural resources shares will be providing the market with some added bullish direction in the early action. With the only major economic development today, coming in the form of a Fed Speech just ahead of mid session, it is possible that the promise of lingering low rates will facilitate the bullish bias.
Dow:
The March Mini Dow has managed a definitive upside adjustment in the early action today, with the favorable Chinese export news fostering hope among the small and large cap issues. While the January 5th Commitment of Traders with Options report for Dow Jones Index $5 showed the Non-commercial position to be net long 20,882 contracts, with the Non-reportable position net long 3,870 contracts, and that made the 'combined' spec and fund position net long 24,752 contracts as of early last week, that reading is not so overbought that traders should take control of this market away from the bull camp.
Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The close above the 9-day moving average is a positive short-term indicator for trend. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The next upside target is 10634. The next area of resistance is around 10607 and 10634, while 1st support hits today at 10525 and below there at 10469.
S&P:
The S&P sits just under the potentially critical 1150 even number level in the early trade today. We doubt that a quasi even number level on the charts is capable of capping off the pre-existing entrenched up trend pattern today, especially since the scheduled report slate is empty until the earnings season is kicked off later this afternoon. However, with the January 5th Commitment of Traders with Options report for S&P 500 Stock Index showing the Non-commercial position to be net long 4,922 contracts, with the Non-reportable position also net long 47,802 contracts, and that made the 'combined' spec and fund position net long only 52,724 contracts as of early last week. The record spec and fund long in the S&P is over 110,000 contracts and while the COT figures are probably understated due to the rally forged last week, we just don't think that the market is close to running out of upside buying fuel.
Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The close above the 9-day moving average is a positive short-term indicator for trend. The close over the pivot swing is a somewhat positive setup. The near-term upside target is at 1149.68. The market is approaching overbought levels with an RSI over 70. The next area of resistance is around 1146.87 and 1149.68, while 1st support hits today at 1136.13 and below there at 1128.19.
NASDAQ:
The March Nasdaq has already risen to the vicinity of the even number 1900 level on the charts in the early going today and seeing a rise above that critical chart level early this morning should mitigate concern that the market will run into trouble at that level. The January 5th Commitment of Traders with Options report for Nasdaq Mini showed the Non-commercial position to be net long 53,971 contracts, with the Non-reportable position net long 14,200 contracts, and that made the 'combined' spec and fund position net long 68,171 contracts as of early last week. Therefore the market isn't patently overbought and without the capacity to forge even more gains ahead. Critical support now moves up to 1893 level, with the top of the channel not seen until 1906.
Gold:
With very strong action seen in the Asian gold trade overnight, it is not surprising to see February gold forging a sharp range up trade this morning. In fact, February gold this morning has already risen to the highest level since December 8th off what seems to be a very favorable global macro economic outlook. Apparently a much stronger than expected Chinese export sales figure provided the trade with a fresh bullish view on the global recovery prospects and that report seems to have helped the markets get beyond the US payroll disappointment. It does seem as if the brunt of the buying overnight was the result of the sharp slide in the Dollar, which is apparently seeing a definitive liquidation effort off an increased desire for riskier instruments. While some of the buying interest in gold might be off hopes that leaving US rates low, will allow inflation to gain a foothold, it would not seem like inflation is a front page expectation this morning. However, seeing renewed interest in risky instruments might also rekindle investment interest in gold, which to a degree has been largely missing since the early December highs.
Silver:
With the sharp range up extension this morning, March silver managed to reach the highest level since December 4th. With the March silver contract also tracking toward the even number $19.00 level on the charts, it is possible that some traders will see that level as some form of critical pivot point. With copper and energy prices showing very impressive gains early this morning, it would appear that silver is set to get a lift from classic industrial commodity market action. Therefore, it would appear that silver is at least initially set to benefit from both its financial and physical commodity market standing. With the US economic report slate carrying only a third tier private employment report release this morning and the US earnings cycle not kicking off until late in the afternoon, there would not appear to be much in the way of scheduled news to alter the initial track of sentiment that is in place early this morning.
Crude:
Crude oil has been pushed to a new 15 month high overnight with price support coming from strong Chinese oil demand, a sharp break in the dollar, geopolitical supply risk and concerns over tightening motor fuel supplies. March crude oil took out last week's high on rising global oil demand prospects tied to news that China imported a record amount of oil last month. Oil has also likely seen support from news that China's exports jumped 17.7% in December compared to year ago raising optimism that the macro economic recovery being seen in China may be starting to spread more globally. Crude oil has been able to push aside last week's disappointing US payroll report and instead find price support from the retreat in the Dollar tied to renewed expectations for the Fed to keep interest rates low for some time, which is cultivating a bullish environment for commodities. Rising investor risk appetite tied to a weak Dollar and a higher equity/gold trade overnight is certainly boosting oil's appeal as an alternative investment with some of the buying in oil likely being inflation hedge related. Oil is also being pulled higher by the strength in the product markets with a refinery fire in Canada and glitches at US facilities raising concern over tightening fuel supplies since the US refinery operating rate is already so low. Even though temperatures are forecasted to turn warmer over the next couple of weeks, market focus already seems to be shifting to concerns over spring gasoline supplies. News of a militant attack at a Chevron pipeline in Nigeria that forced a cut in production has added geopolitical supply side risk into the equation. With March crude oil pushing above the $84.20 level overnight, there is little overhead resistance until $85.00 and above there not until $85.90. However, some caution is warranted given that short-term technical indicators are at overbought levels clearly being reflected in the January 5th COT report with options for crude oil showing the combined fund and spec net long position rising to 196,576 contracts as of early last week. In fact, the oil market is closing in on the record combined spec net long position of 203,568 contracts reached in November 2009. In fact the net spec long reading and may have already exceeded the record level given the rally in oil since the COT report was measured which to a certain extent, leaves the oil market vulnerable to profit taking. But since there are a variety of factors stacking up in the bull camp's corner, profit taking breaks in oil are likely to be short lived since the bullish environment for commodities will likely keep funds active buyers on price dips. Quarterly earnings starts this week and seeing companies beat Street estimates could certainly add another bullish element for oil into the mix. Given the oil market's firm bullish undertone, traders should continue to look for buying opportunities on price dips back to support levels.
Natural Gas:
February natural gas has been pushed lower in the early overnight trade on follow through selling from last week tied to a bearish shift in the weather. The strength in crude oil, a weak Dollar and perhaps expectations for a large storage draw down this week may be factors that have so far prevented February natural gas from falling below chart support near $5.50. But with private forecasters predicting a significant warm up in the second half of the month, it looks as if February natural gas likely set a near-term high last week. Temperatures in the Midwest and Northeast are expected to warm up from the frigid conditions seen last week while some weather forecasters have temperatures drifting up into the 40's over the next two weeks leaving downside price risk for natural gas in place. Outside market influences and expectations for a 200 plus bcf drain from storage in this week's inventory report may provide some limited price support to natural gas. There may also be some lingering concern over well head freezing disrupting production. But higher natural gas prices have lifted the number of natural gas rigs in operation to the highest level since last April, and there is the risk that the storage drain from winter fuel demand could be quickly replaced by rising fuel production unless industrial demand starts to recovery and so far there are no signs of that happening. The January 5th COT report with options for natural gas shows a bearish setup with funds adding to their net short position and small traders increasing their net long position leaving the market vulnerable to more small spec liquidation if support levels are violated. Unless the weather outlook turns more supportive again, we can't rule out an eventually retreat in February natural gas back to the $5.30 price level. Overhead resistance comes in near $5.66 then near $5.76 with support near $5.50 then near $5.31.
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