Hello traders everywhere! Adam Hewison here, co-founder of MarketClub with your mid-day market update for Friday, the 15th of February.
CARL ICHAN VS BILL ACKMAN, NOW IT'S PERSONAL
One of the biggest mistakes you can make in trading is getting personal with the market. That is why it's amazing to me to see Carl Ichan and Bill Ackman act like two school kids with this very public fight over HERBALIFE. The one-on-one animosity and hatred they have for each other is now in the public arena. Basically, they both want to win on HERBALIFE and the reality is it's going to cost one of their hedge fund clients a lot of money. After the close in after hours trading, Carl Ichan announced that he had purchased 14 million shares, effectively giving him a 12.98 percent stake in HERBALIFE. This was enough to push shares of HERBALIFE up 20% in after hours trading.
How this all plays out is going to be a fascinating WallStreet soap opera that will be watched by professional traders the world over.
At MarketClub, we prefer to use a non-emotional approach to the market. Let's see how our Trade Triangles are interpreting this latest feud between two hedge fund giants.
What do you think of this feud?
HAS GOLD LOST ITS LUSTER?
The gold market continues to drop. The trend is your friend, and we have been saying for some time now the longer-term trend in gold still negative. Potential support comes in around $1,600-$1,620 on gold, but clearly trying to pick a bottom here is like trying to catch a falling knife. Today we will be looking at gold and some key areas that may offer support for this once proud metal.
52-WEEK HIGHS AND LOWS TODAY
We will also be looking for 52-week highs and lows using MarketClub's Smart Scan technology. Here are the three rules you need to trade "the 52-week new highs on Friday rule":
Rule #1: On a new 52-week high, when the market closes at or close to its high on a Friday, buy and go home long for the weekend.
Rule #2: Exit long position on the opening the following Tuesday.
Rule #3: If the market opens lower on Monday, exit this position immediately.
The "The 52-week new highs on Friday rule" works extremely well in futures and in Forex.
There are no guarantees in trading, but you might want to watch this one on paper for a while to build up your confidence in this very simple trading rule.
Have a great weekend,