S&P 500
1983.53
+9.90 +0.50%
Dow Indu
17113.54
+61.81 +0.36%
Nasdaq
4456.63
+31.93 +0.72%
Crude Oil
102.15
-0.24 -0.24%
Gold
1307.495
-0.580 -0.04%
Euro
1.346900
+0.000600 +0.04%
US Dollar
80.748
-0.032 -0.04%
Strong

It's all toxic for the market!

Hello traders everywhere!  Adam Hewison here, co-founder of MarketClub with your mid-day market update for Monday, the 21st of November.
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Free consultation. 877–219–1482
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Moody's, France, the SUPERCOMMITEE, you name it!  It's all toxic for the market!

Traders looking for good news are going to be hard-pressed this week, as everything seems to be "hitting the fan" at the same time.

We have Moody's Investor Services warning about a possible downgrade to France's credit and it all seems to be feeding off itself.  Let's not forget the other credit bombs like Italy, Greece, Spain, Portugal and Ireland.  This is one mega-mess that is not going to be easily gotten out of.

I cannot see how the US can avoid and skate around this contagion effect.  The US does a lot of business with Europe.  If Europe is quickly slowing down into a recession/depression, they are not going to be importing goods from either the US or China.  That in turn pushes the US and China into a recession.

Last week, we informed all readers of this blog that our Trade Triangles in the S&P500 had turned red, indicating that a bear market was in effect.  We have now seen that move spillover to other markets, like gold liquidation and softness in markets like crude oil.  Normally gold is the last refuge to protect buying power, but for the past eight days gold has come under tremendous liquidation pressure, with a drop of over $100.

No one has seen a global economic picture like this before and therefore no one has a clue on how to solve it.  The only way to interpret this in my mind, is to look at what the market is doing.  The market doesn't lie and is the sum total of everyone's thinking.

The market is the best barometer we have to judge global economic pressures, and right now, it is telling us that the economic climate is going to be troublesome to say the least.

Now, let's go to the charts and the video and see how we can create and maintain your wealth in 2011.

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S&P 500 INDEX
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OUR VIEW: Heading Lower.
Combined Strength of Trend Score = -100

All our Trade Triangles are red indicating a strong downtrend.  A 61.8% Fibonacci retracement can push this market back down to the $1160 area.  The key level to look for today is a close below the $1200 level.  With a Chart Analysis Score of -100, we are in a downtrend.  Long-term and Intermediate term traders should either be in cash or continue to hold short positions in this index with appropriate money management stops.

See today's S&P 500 Video Here.
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Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Negative
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Suggested S&P 500 Trading Instruments:
Non Leveraged ETF's: (Long SPY) (Short SH)
2 x Leveraged ETF's: (Long SSO)(Short SDS)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity is some ETFs is very thin. Contact your broker for more information.

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PERSONAL ONE-ON-ONE MARKETCLUB COACHING
877–219–1482 The call is free and the consultation is free.
Watch my personal one-on-one coaching right here.
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SILVER (SPOT)
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OUR VIEW: Bear Market
Combined Strength of Trend Score = -100

This market has key support at $30.00, and a break of that level will begin an acceleration to the downside.  Generally speaking, the major trend for silver continues to be negative based on our monthly Trade Triangle and our intermediate weekly Trade Triangle turned negative last Thursday.  Long-term and intermediate term traders should continue to hold short positions in silver with appropriate money management stops.

See today's Silver Video Here.
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Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trend = Negative
Daily Trade Triangles for Short-Term Trends = Negative
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Suggested SILVER Trading Instruments:
Non Leveraged ETF's: (Long SLV) (Short the ETF SLV)
Leveraged ETF's: (Long AGQ) (Short ZSL)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity is some ETFs is very thin. Contact your broker for more information.

-------------
PERSONAL ONE-ON-ONE MARKETCLUB COACHING
877–219–1482 The call is free and the consultation is free.
Watch my personal one-on-one coaching right here.
-------------
GOLD (SPOT)
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OUR VIEW: Trading Range
Combined Strength of Trend Score = -70

The liquidation in gold today triggered a red weekly Trade Triangle and moved our Chart Analysis Score for this market to a -70 reading.  This indicates that gold could be moving out of a trading range and into a bear trend.  Fibonacci retracements are as follows: 50% - $1,667, 61.8% - $1,634.  This market is now in an oversold condition.  Long-term traders should remain positive for this precious metal.  Intermediate term traders should be out of this market at the moment and on the sidelines.

See today's Gold Video Here.
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Monthly trade triangles for Long-term trends = Positive
weekly trade triangles for intermediate term trends = Negative
daily trade triangles for short-term trends = Negative
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Suggested GOLD Trading Instruments:
Non Leveraged ETF's: (Long GLD) (Short the ETF GLD)
Leveraged ETF's:(Long UGL) (Short GLL)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity is some ETFs is very thin. Contact your broker for more information.

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COPPER (DECEMBER)
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OUR VIEW: Strong Downtrend
Combined Strength of Trend Score = -100

Copper now has a Chart Analysis Score of -100 indicating this metal has now emerged from its trading range and is in a full blown bear market.  Generally speaking, the major trend for this metal continue to be negative.  Long-term and intermediate term traders should continue to hold short positions in silver with appropriate money management stops.

See today's Copper Video Here.
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Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Negative
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Suggested Copper Trading Instruments:
Non Leveraged ETF's: (Long JJC)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity is some ETFs is very thin. Contact your broker for more information.

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CRUDE OIL (JANUARY)
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OUR VIEW: Trading Range
Combined Strength of Trend Score = +55

Attention we are now tracking the January contract.  As we mentioned last week, we felt that the crude oil market was topping out.  In retrospect, we have confirmation that is indeed the case.  We are now expecting and look for support to come in at $94.55 (basis the January contract), which is a 61.8% Fibonacci retracement.  At the present time both our monthly and weekly trade triangles remain in a positive mode, which is the direction of the major long term trend.  Resistance is the $100 level.  Long-term, Intermediate term should be long this market with appropriate money management stops.

See today's Crude Oil Video Here.
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Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Negative
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Suggested Trading Instruments:
Non Leveraged ETF's: (Long USO) (Short the ETF USO)
Leveraged ETF's: (Long UCO) (Short DTO)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity is some ETFs is very thin. Contact your broker for more information.

-------------
PERSONAL ONE-ON-ONE MARKETCLUB COACHING
877–219–1482 The call is free and the consultation is free.
Watch my personal one-on-one coaching right here.
-------------
DOLLAR INDEX
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OUR VIEW: Bull Market
Combined Strength of Trend Score = +90

We continue to view the dollar index in a positive light and we expect that the highs seen in early October will be tested again.  We believe we'll see this market trade higher and want to hold all long positions as our Trade Triangle technology continues to point to higher levels and indicate that the market is in very strong hands.  All Trade Triangles are in positive mode indicating that this market remains in an uptrend.  Long-Term and intermediate term traders should maintain long positions with the appropriate stops in place.

See today's Dollar Index Video Here.
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Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Positive
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Suggested DOLLAR INDEX Trading Instruments:
Non Leveraged ETF's: (Long UUP) (Short UDN)
Leveraged ETF's: (Long) (Short)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity is some ETFs is very thin. Contact your broker for more information.

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REUTERS/JEFFERIES CRB COMMODITY INDEX
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OUR VIEW: Bear Trend
Combined Strength of Trend Score = -100

This index is lower today and looks to be on the defensive.  Resistance is evident at the $320 level with support coming in between $300 and $305.  Our long and intermediate term Trade Triangles remain negative for this index.  Long-term and intermediate term traders should continue to hold short positions in silver with appropriate money management stops.

See today's REUTERS/JEFFERIES CRB COMMODITY INDEX Video Here.
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Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Negative
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Suggested REUTERS/JEFFERIES CRB COMMODITY INDEX Trading Instruments:
Non Leveraged ETF's: (Long CRBQ) (Short the ETF CRBQ)
Leveraged ETF's: (Long) (Short CMD)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity is some ETFs is very thin. Contact your broker for more information.
--------------
PERSONAL ONE-ON-ONE MARKETCLUB COACHING
877–219–1482 The call is free and the consultation is free.
Watch my personal one-on-one coaching right here.
--------------
HOW TO USE THE MARKETCLUB SCORING SYSTEM:
Chart Analysis Score: 50 - 65 Trading Range
Chart Analysis Score: 70 - 80 Emerging Trend
Chart Analysis Score: 85 - 100 Strong Trend
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This is Adam Hewison for MarketClub and I'll see you tomorrow, right here with my mid-day update.  Have a great trading day.

All the best,
Adam Hewison
President INO.com and co-founder of MarketClub.com

Comments

  1. LanceJ says:

    @Shannon - I see your question is directed at Adam, Jeremy or Sue, but no one has answered your question yet so I'll give it a go. There are two main types of indicators, oscillators (leading) and trend indicators (lagging). Oscillators work better in range contraction or rangebound markets, trend indicators work best in range expansion or trending markets. All markets cycle back an forth between range contraction (rangebound) and range expansion (trends). Bollinger Bands or the ADX indicators are good for determining the type of market we are in. If Bollinger Bands are widening, it's range expansion/trending, if Bollinger Bands are contracting, it's range contraction/rangebound. Bollinger Bands, therefore, will widen and narrow, back and forth. With the ADX, if the ADX is rising, the market is trending, if the ADX is falling, the market is trading; therefore, the ADX will rise and fall back and forth because all markets go through range expansion/trending and range contraction/rangebound cycles.

    So what you can do is give more weighting to your oscillators when the market is rangebound, and more weighting to your trend indicators when the market is trending.

    Hope that helps and good luck.

  2. Rose says:

    This is my first time on this and I like it. Hopefully I can learn enough to make money and join.
    Someone said that France needs to get bailed out. I read on an investers news letter that France has the richest bank in the world. Germany has no intention of bailing any country out.

  3. DGDye says:

    Doug,

    Very true.

    Last month I saw a fund manager bragging about her 8-year results of under 4% per year. She charges a 1% management fee. Inflation in that time averaged 3.3%. She appeared to be oblivious to the fact that she was bragging about earning a substantial fee to lose money for her clients, in real terms.

    This is why pension funds are scrambling, because in this low interest rate environment, there is a 100% chance they will not be able to meet their funding obligations. So you get companies like MF GLobal taking crazy risks as they try to pull back from the "infinite" risk associated with guaranteed failure.

    I expect we will see more of these kinds of failures among pension funds and shadow financials in the future as they reach for yield without adequate knowledge of systemic risk.

    Cheers

  4. steve starr says:

    You ain't seen nothing yet. Coming soon, a bank run in Italy, which as Barclays has stated, "is mathematically beyond the point of no return". (!!)

    Next, the failure of the 3 largest banks in France, which all are heavily exposed to Italian government debt to the tune of $100 billion, not to mention an additional $300 billion in other obligations. And surprise, the Germans are not going to bail out the French! And surprise, US banks have $200+ billion exposure to Italian derivatives (!!), can you say Humpty-Dumpty??

  5. Doug Coulter says:

    DGDye, you're right on. I'm a run and gun cowboy trader myself, and doing fine, thanks. The ticker is always the truth, no matter ones wishes - because whatever we think, it's the price you can buy and sell at.

    The thing is, there are all too many people doing this who can't make the time it takes to do the required homework (which MC helps with) and then pay enough attention, and put in enough energy in decisiveness to make good money at this game. Other things are more important to them, and they demand a set and forget methodology, even though none exists and you just have to stay "on it" to do well. Even money managers seem to require much too much time at the golf course to ever be good traders - and so they invent and push the idea that no one can time the market, since they can't - or, more truthfully, won't.

  6. Hey Adam thanks for the post

    Could you answer for me, what is the dollar index based on? Also, is their a Euro index or could one be produced from a range of data sources similar to the Dollar? Im asking in relation to trading EUR/USD in Forex.

    Thanks

  7. Doctor Stock says:

    To be honest, I'd rather see the markets get hit all at once than a little a time, hitting the markets every day for months or years. Here's to buying on the momentum up!

  8. Shannon says:

    @ADAM or Jeremy or SUE...

    When a market is rangebound, what is the best indicator to use? Are oscillators ok for sideways markets or do you prefer other on chart or below chat studies?

  9. hsm says:

    Hi Adam,
    I always look your 1P.M. Live update. For the past two days, I am unable to see it live on http://www.livestream.com/marketclub. It shows me that Market club has gone private. Fortunately I do see the Videos lator on Ino.com. Have you changed it?
    Thanks
    HSM

  10. DGDye says:

    Adam,

    Enjoy the updates. On this one, I particularly like that you emphasized -- as you have before -- that the best analyst in the world isn't at Goldman, it's the market itself.

    We can have our opinions on the markets and what's causing them to move, but the charts tell all. Whether a person takes the signals depends on how aggressive they are. For example, I'm an aggressive trader, so I will use all the tools in the tool box to play a rally even if I know it's a bear market rally-- such as the Oct. 4 one.

    More conservative traders will strictly use the trade triangles and/or be out of the market for counter-trend rallies. It depends on how much heat a trader can take. Traders who are able to take shorter-term trends will grab more of the "maximum excursion," which is the total amount of money possible in a market move. But they also risk more, so the shorter-term you trade, the better trader you should be. The trading graveyards are made up of about 90% day-traders.

    What I love about Market Club is that whether you are an aggressive trader or a conservative one, you can trade with full knowledge of what the trends are and act accordingly. That alone pays the annual membership fee, usually after about an hour of trading.

    Cheers

  11. Shannon says:

    GVZ-X is the gold volatility index and it has shot up about 9% overnight as opposed to 2% on VIX...if stocks were going to plummet, shouldn't we be seeing opposite numbers? $CPCE Put Call ratio at .91...very confusing indeed!

  12. Shannon says:

    Is the VIX saying anything.. Shouldn't it be a bit wilder here? OR maybe I should ask, what is the VIX not saying?

  13. D. Dulworth says:

    Adam,
    I'm confused. In today's update you said long term traders of Gold should still be long even after it posted a red weekly triangle. According to my notes from your older videos, you indicated this would be a signal to exit all long positions for conservative traders and actually go short for agressive traders (weekly = trend; daily = timing). Could you elaborate on why we should still be long gold?
    Thanks,
    Dan

  14. Mister Snitch says:

    Y'know, Adam, every time I see that picture of you in that tux I think you are trying out your magic act.

    • Adam says:

      LOL,

      Thanks for your comment. The magic is making money in the market and we show you how to do that using our Trade Triangle technology. Next week, I plan on pulling a rabbit out of a hat:-) so stay tuned!

      All the best,
      Adam

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