Hello traders everywhere! Adam Hewison here, co-founder of MarketClub with your mid-day market update for Thursday, the 20th of October.
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Will Europe ever make up it's mind?
The continuing back and forth squabbling going on in Europe continues to be a real problem for the markets.
The risk on, risk off trade is becoming a daily ritual for many traders. We want to refer to our long term Trade Triangles to continue to keep us on the right course.
If you didn't have a chance to watch our MarketClub TV show last night, you may want to take some time and look at what we were saying and what the markets are doing today.
We want to be very watchful of the S&P 500 Index, as a move and close below the 1200 level should be viewed as topping action for this index.
It is all going to come down to tomorrow, and how we close in the markets. I believe that the politicians in Europe are really no different from the politicians on this side of the pond. They do not want to make a decision that would cost them their job. We have said from the beginning that we thought Europe was a disaster, as you have many different countries pulled together in alliance called the euro. Every country in Europe is going to hunker down in their own sovereignty.
Greece is going to default and probably fall into chaos. It is unavoidable at this stage of the game. Let's hope things remain a little calmer here in the United States.
Now, let's go to the 6 major markets we track every day and see how we can create and maintain your wealth in 2011.
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S&P 500 INDEX
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A close below 1200 will be negative for this index.
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 = Positive
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = + 60
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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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SILVER (SPOT)
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Silver is in a bear market.
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
Combined Strength of Trend Score = - 100
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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.
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I would like you to ask yourself this question, AM I Ready FOR A PERSONAL COACH?
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GOLD (SPOT)
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Gold is in a broad trading range.
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 = Positive
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = + 55
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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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CRUDE OIL (DECEMBER)
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Topped out in the short term market, bearish.
See today's Crude Oil Video Here.
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Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = + 55
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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.
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DOLLAR INDEX
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Looks like the dollar has put in an interim low on the index.
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 = Negative
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = + 55
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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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Looking to test 300.
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 = Positive
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = + 55
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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.
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As always, we rely on our market proven Trade Triangle technology for catching the big moves.
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I would like you to ask yourself this question, IS PERSONAL COACHING RIGHT FOR ME?
Give us a call today at 877–219–1482 for a free consultation and see if personal coaching is right for you.
But first, watch my personal invitation to you about one-on-one coaching:
http://www.marketclubcoaching.com/now/
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This is Adam Hewison for MarketClub and I'll see you tomorrow with my mid-day update. Don't forget to enter for a free 1 year subscription to MarketClub on a HP WiFi Tablet.
All the best,
Adam Hewison
President, INO.com
Co-creator, MarketClub
Hi Adam,
just want to say, I fully agree with your opinion. Good luck and have a great weekend.
I will go for huge short when monthly trade triangle will turn into positive for S&P. It is simply a lagging indicator..
Best of luck who is holding short from 1130..
The European Union is going to bailout itself.
If that sounds a little strange…that’s because it is…very strange. It looks like the Eurozone was given tips by Barack Obama on how to fudge reality.
What if I said, GM was going to bailout itself? Would that sound strange? Or maybe, Freddie Mac and Fannie Mae are getting together and their going to bailout each other? There is no difference. The EU bailing out itself is equally absurd.
The second strongest economy in the EU is France. They were threatened with a credit downgrade this week. That leaves Germany the strongest economy…but not strong enough to bailout every one of the 17 other countries in the Eurozone. In fact, right now Germany is balking at the plan that the other countries have proposed because Germany is looking to self-preservation. Who can blame them?
Note well, my original estimate of Greece debt was pretty much on the money…almost $400 billion. There is no way that Greece can EVER pay off that kind of debt. The only question is, are the 17 EU countries willing to pay off Greece debt to presumably protect the Euro? Germany – the strongest of all the Eurozone countries could only muster about the same amount of financial commitment to the ESFS (European Financial Stability Fund) that it would take to pay off Half of Greece’s debt. The rest of the European Union would have trouble coming up with the other half. So then, who’s going to bailout Ireland, Portugal, Spain and Italy?...All with much bigger economies to bail out!
Now, you may be wondering why I’m calling the Eurozone Bailout a bunch of fallacious crap? Let’s start with their “plan” and analyze…here’s the EFSF:
Graphic images don't show up here...See EFSF table in the following article:
Source: http://seekingalpha.com/article/301000-eurozone-bailout-will-it-work
Now someone explain to me how Greece, who can’t pay its own bills is going to come up with nearly $22 billion Euros for this EFSF???!!!! Or, how about Portugal, Spain, Ireland and Italy? Note well the EFSF is NOT a listing of the amount of money that these countries have contributed to the “Fund”, it’s their respective commitments. In other words, these are promises. Yes, promises. The European Financial Stability Fund is composed of promises…IOU’s if you will. And THAT’s what’s going to save Europe???!!!???
Now, these Eurozone countries know that they need to come up with 1 to 2 Trillion Euros in order to cover the bailout needs of the over-extended countries who can’t pay their bills. So, how are they going to do that? Well, according to the EFSF, they have commitments for 780 billion Euros. To make up the difference, France wanted to make the EFSF a bank – so they could borrow the money Germany says,”Oh NO, no way in hell are we going to commit to that.” Germany’s solution is to “Insure 30% of the EFSF ‘assets” which will add enough to get over 1 trillion Euros. How do you like that math? They have indeed been using the Obama manual for Economic Stability. They can’t even come up with 800 billion Euros…promises mind you – not cash…and their going to “insure” these promises in order to come up with the remaining 'funds' necessary for 1 trillion Euro “promises”.
Now, you tell me this isn’t a bunch of fallacious crap!
And on THIS basis, the stock market rallies with “EU Optimism”.
“All the rescue speculation has been around a three-step process:
1. Recapitalizing of European banks so that they are strong enough to withstand market deterioration and sovereign bond losses in case of a default.
2. Leverage EFSF (European Financial Stability Fund) from its existing €440bn to reach a €1-2 trn level.
3. Reset the level of haircut that banks have to take on Greek bonds under the revised PSI (Private sector involvement) terms.
One should not solely rely on stock market price action to gauge effectiveness on the plan and should look at some additional data to assess it is viability.
An interesting development over the last couple of days has been the widening of the yield spread between the French and the German 10-year bond yields. Looking at the chart below we see that this spread has widened dramatically over the last two weeks, implying that the market is doubtful about France’s ability to support it is banking sector, which has been facing substantial liquidity concerns. S&P had recently downgraded French bank BNP Paribas amid funding, liquidity concerns.”
Source: http://seekingalpha.com/article/301000-eurozone-bailout-will-it-work
Conclusion: It’s fairytale land.
Rick
The markets are actually doing well... and despite some less than impressive US employment numbers, the US economy is fairly stable. Unfortunately, Europe can't get their act together... and the worst part is they keep contradicting themselves. All this public discord is causing serious damage to what would be a less than volatile market.
both of those commodity ETFs are illiquid. They almost no volume.
China chased metal prices on the way up then stopped buying as prices fall. Also, they understate their metal stocks. This will ensure a very prolonged crunch in metals and other commodities. Goldman´s warehouse business (hoard and sell) will then make the situation even worse. The market is on to all these tricks.
Hi Adam
Thank you again for your excellent comments. You have saved me quite a bit of heart ache, by adapting your daily comments to what I am doing, ie maintaining and growing my super annuation. I am just wondering why you don't seem to include the copper market in your portfolio, as copper seems to be the barometer of the economy, especially here in Australia. I am looking forward to having your Australian part of the trading triangles up and running so I can make use of your one month trial offer.
Thanks again and all the best
Konrad