Hello traders everywhere! Adam Hewison here, co-founder of MarketClub with your mid-day market update for Tuesday, the 8th of November.
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Call in, or e-mail your questions for the show.
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It's different this time...
There are so many negative reports about what's going on in the world, but the market seems to shrug it off like everything is hunky-dory.
I'm not so sure yet, as many of our longer-term indicators continue to resonate in a negative manner. That is not to say they can't or won't change eventually, but rather they serve as a reminder that we are not out of the woods yet.
Europe continues to be a serious financial and social problem for the world. How are these countries and the citizens of those countries going to deal with having things taken away from them? Human nature is human nature, and I seriously doubt whether all these proposed austerity plans are going to be accepted with open arms by anybody.
So what is a trader to do? One of the easiest ways, and these have not been easy markets, is to follow the market action. Today could be a good example of doing just that.
While the intermediate term trends are positive for some of these markets, they are in conflict with the longer-term trends that are still negative. Until we see those indicators in unison, we have little enthusiasm for chasing the long side of the equity index markets at the moment.
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: $1270 resistance - $1220 support
Certainly a close below the $1253 and $1250 levels today will signify some sort of top is put in place for this index in the short term. We still believe that the $1220 level holds the key for the S&P 500. With a Chart Analysis Score of +60, we are in a trading range which could be very broad at this time. Intermediate traders should be on the sidelines waiting for a new Trade Triangle short signal. Long-term traders should either be in cash or continue to hold short positions in 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 in some ETFs is very thin. Contact your broker for more information.
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SILVER (SPOT)
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OUR VIEW: Trading Range
Nothing has changed from our earlier comments. The spot silver market remains in a broad trading range bound by $32 an ounce on the downside and $36 an ounce on the upside. With our Chart Analysis Score reading +70, we seen no clear-cut direction at the moment in this metal. Generally speaking, the major trend for this metal continues to be negative while the intermediate trend is in conflict based on our Trade Triangles. Long-term traders should continue to hold short positions in silver with appropriate 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 = Positive
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = + 70
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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 in some ETFs is very thin. Contact your broker for more information.
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GOLD (SPOT)
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OUR VIEW: Resistance at $1,800 basis spot
The upward trend in gold remains intact with the Chart Analysis Score remaining at +100. This indicates to us to be very concerned about what is happening in Europe and the financial markets. Long-term and intermediate term trends remain positive for this precious metal. Intermediate and long-term traders should maintain long positions with the appropriate money management stops in place.
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 = Positive
Combined Strength of Trend Score = + 100
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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 in some ETFs is very thin. Contact your broker for more information.
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COPPER (DECEMBER)
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OUR VIEW: $3.50 key support
We want to watch the copper market very closely today, as a close below the $3.50 level and a move to the $3.49 level would put pressure on this market. Copper generally reflects the economic conditions and as such is influenced by equity prices. With a Chart Analysis Score of - 55, this metal is in a trading range. Generally speaking, the major trend for this metal continue to be negative while the intermediate trend is in conflict. Long-term traders should continue to hold short positions in copper with appropriate 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 = Positive
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = - 55
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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 in some ETFs is very thin. Contact your broker for more information.
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CRUDE OIL (DECEMBER)
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OUR VIEW: Trading Range
The December crude oil market moved out of the upper levels of the Donchian trading channel, which is similar to what happened back on October 25th. It looks as though crude is setting up a Doji pattern, which often indicates some form of selling and buying equilibrium. With a Chart Analysis Score of +60, this market maybe trying to move out of its broad trading range. Depending what happens to equity markets and the global economy will likely be reflected in this commodity. Intermediate term traders should be on the sidelines and long-term traders should continue to be short the crude oil market.
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 = Positive
Combined Strength of Trend Score = + 60
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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 in some ETFs is very thin. Contact your broker for more information.
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DOLLAR INDEX
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OUR VIEW: Resistance at $77.50
We believe the dollar index is continuing to consolidate to move higher. However, the market really needs to close over near term resistance at $77.50 to get moving on the upside again. For the past six days, we have seen this market bounce back and forth as it consolidates its recent gains. While our longer-term monthly Trade Triangle remains in a positive mode, our intermediate term weekly Trade Triangle remains in conflict. Long-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 = Negative
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = + 75
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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 in 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: Trading Range
This index has moved higher the past five days however, it may be close to a reversal and running out of steam. Like many of the other markets where tracking right now, the CRB index is in a trading range with a Chart Analysis Score of + 60. Resistance is evident at the $325 level and support comes in around the $315 area. Look for these levels to contain the market for the next few days. Our longer-term Trade Triangles remain negative for this index. Intermediate term traders should be on the sidelines. Long-Term traders should maintain short positions with the appropriate money management stops in place.
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 = Positive
Combined Strength of Trend Score = + 60
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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 in some ETFs is very thin. Contact your broker for more information.
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Market proven, Trade Triangles catch the big moves.
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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
This is Adam Hewison for MarketClub and I'll see you tomorrow, right here with my mid-day update. Have a profitable trading day.
All the best,
Adam Hewison
President INO.com and co-founder of MarketClub.com
Love the title. The "four most dangerous" words are so often misinterpreted. While human nature never changes, or only so slowly it's hard to see (that thin veneer of civilization is lost so easily), things do change over time.
It used to take a day or two to even know what the markets were doing. Then it took a phone call. Now I have a quad screen with realtime level II data feed. It's far easier for the very same human nature to get "twitchier" in these new conditions -- and move markets quicker.
Yet we still have old-school policy makers who think they run things (politicians who don't realize they really don't run things - finance does) and who seem to think they have time on their side, they can just muddle through indefinitely.
But ca WWII - we had such low (true) capacity utilization we could just ramp up - send all the guys to war, let the women step in and not only keep an economy going, but grow it, and even grow much of their own food. It's changed a little bit since then to say the least...we are ever more balanced on a knife edge of small differences between large numbers of supply and demand for nearly everything than we ever have been in the past - it's truly different this time!
Adam,
In looking at the chart, where do you think FSG (etf) could go to ?
this is a 2xbull for gold, and short s/p etf.
I think it is almost out of the donchian channels, does it look like it will come back in the donchian channel?
Thanks, Adam
Dina
Dina.
Monthly S&P triangle would currently go green at 1,307.38. Look at the monthly chart (INX) and look at the high from three months ago (do not count the current month). Monthly triangles fire at three month highs or lows. Weekly triangles (look at weekly chart and count three weeks back not including the current week). Daily, look at daily chart and count three days back not including the current day. Gaps will show the triangle fired at the high or low (depending on if green or red) despite the fact that the opening of that bar was much higher or lower. If a triangle does not fire in that day, week, month, then once the new day, week, month open, count three back from that. So, in other words, if the S&P does NOT reach 1,307.38 by November 30th, then count back three months starting December 1 (not including December) which would be 1,292.66. Mind you, it doesn't have to be the high FROM three months ago (as you'll see in the S&P). It just has to be the high OF the previous three months. Make sure you use each specific timeframe (daily, weekly or monthly) to determine when each triangle should "fire" (in other words, daily for daily triangle, weekly for weekly, monthly for monthly).
Adam,
On the s/p at what price would the monthly triangle come in at to turn green ?
As a member, how do you determine the price that the triangle would turn green in various markets ? Is there a way to know this ?
Thanks,
Dina
It would be great to see some consistency in these markets... a third up day in a row would be so nice... a fourth would be getting ahead of ourselves.
Hi... I just join the club. Do you have analysis for Forex? Example EUR/USD or other pairs of forex?
Thanks
Azhar,
Here are the rules we use for trading forex with our trade triangle technology.
How to use "Trade Triangles" in futures and Forex.
In the futures and Forex markets we use the weekly "Trade Triangles" for trend and the daily "Trade Triangles" for timing. Let me give you an example of how that works. If a green weekly "Trade Triangle" is in place it indicates that the trend is positive for that market. Initial entry point would be on the weekly green "Trade Triangle" and then you would use a red daily "Trade Triangle" as a stop. For example if the trend was up on the weekly you would exit a position on a red daily triangle. This is not to go short but only to exit the position and wait for the trend to reestablish itself on the upside. In the event the trend that does not reestablish itself and reverses with a weekly red "Trade Triangle" you would go short on the weekly "Trade Triangle" and use the daily "Trade Triangle"for money management and reentry points.
All the best,
Adam
Adam...
I don't stop by enough! If this post is a typical daily post.. or even weekly... I just say WOW!
Your opinions an market numbers are laid out in a nice readable way. Love that.
PLUS... in looking at the market at 3:03 pm eastern, you've hit just about all these numbers on
the head. Gold, for instance, breached 1800 and within minutes it reversed 15 dollars. It's nice
to know resistance!
Again... keep up the good work, my friend.
Norman