Warning

888.755.3846 www.tradingadvantage.com     Follow us:                             Warning     Another reason for Wednesday’s and now Thursday’s sell-offs, which I failed to mention Wednesday, were warnings to the USSA that its credit rating will be cut again.   Yesterday in Bloomberg we read (as well as heard it live on television)… Fitch Ratings warned that the U.S. may be downgraded next year unless lawmakers avoid the so-called fiscal cliff and raise the debt ceiling in a timely manner, while Moody’s Investors Service said it will wait to see the economic impact should the nation experience a fiscal shock. Congress and President Barack Obama must confront more than $600 billion in tax increases and spending cuts set to take effect in 2013 or risk the economy tipping back into recession. Standard & Poor’s stripped the U.S. of its AAA credit rating on Aug. 5, 2011, after months of political wrangling that pushed the nation to the deadline an agreement to lift the debt ceiling. The U.S. rating depends on “a stabilization and then a downward trend in the ratio of federal debt” to gross domestic product next year, according to a Moody’s statement. Fitch also said that the nation may lose its AAA ranking next year if the government fails to reduce the deficit. Today Standard & Poor’s says it may slash the USSA rating again, unless the United Socialist States of America cuts the deficit soon and in a meaningful way.  Fat chance! From Reuters we read today… NEW YORK, Nov 8 (Reuters) - Standard & Poor's on Thursday said it sees an increasing chance that the U.S. economy will go over the so-called fiscal cliff next year, though policymakers will probably compromise in time to avoid that outcome. Analysts at the credit ratings agency now see about a 15 percent chance that political brinkmanship will push the U.S. economy - the world's largest - over the fiscal cliff. "The most likely scenario, in our view, is that policymakers reach sufficient political compromise in time to avoid most, if not all, potential economic effects of the cliff," S&P analysts wrote. The automatic spending cuts coupled with significant tax increases in January could take an estimated $600 billion out of the U.S. economy and push it into recession, according to the non-partisan Congressional Budget Office's assessment of the fiscal cliff. Will Fitch, Moody’s and S&P allow the politicians to kick the can yet again?     Trade well and follow the trend, not the so-called “experts.”     Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banking mafia.         is a leading investment education firm that empowers traders to achieve and surpass their financial goals. More than 50,000 students have used Larry Levin's proven techniques for powerful results.     Congratulations to Manny Madrid Results: +$ 1,600 "I put a lot of effort into this program and I feel that Patrick does an amazing job!  It is an honor to be the student of the day but I am just a reflection of Patrick and your program.  I recognize the patterns and then manage the trade!  I live and breathe what you are teaching!"   NOTICE: Testimonials are believed to be true based on the representations of the persons providing the testimonials, but facts stated in testimonials have not been independently audited or verified. Nor has there been any attempt to determine whether any testimonials are representative of the experiences of all persons using the methods described herein or to compare the experiences of the persons giving the testimonials after the testimonials were given. The average reader should not necessarily expect the same or similar results. Past performance is not necessarily indicative of future results. No person was compensated for providing a testimonial.       Volatility Commentary   Another VIX head fake? Or signal for market rebound tomorrow? The S&P500 Index continued its decline today on high volatility.  It closed at 1377.51, down 1.22%, but the Index actually was up in the morning.  In fact, the intraday range from the High to the Low of the S&P500 Index is equivalent to a 27% annualized volatility figure. VIX, surprisingly however, declined today by 3.09% to 18.49.  VIX is usually a reliable indicator, and when it deviates from its usual inverse relationship to stock prices investors pay attention. For example, VIX closed down today even though equity prices closed down significantly as well.   Is VIX signaling a market rebound for tomorrow?  Most of the time (actually 72% of the time), that would be the case, but because VIX has given so many head fakes in the past two weeks, it would be prudent to be cautious.               Currency Spotlight   The election is over and now its time to focus on both the fiscal cliff and Europe.  Yesterday, the euro continued to fall under pressure after European finance ministers said that they will delay the decision to give Greece its next round of aid, despite Greek Parliament’s signing off on the required austerity measures.  Economists were also disappointed that the ECB did not cut the key ECB interest rate. Expectations for a rate cut were growing especially after ECB President, Mario Draghi’s recent concern for weakness to persist in Europe.    With price action on the EUR/USD trading comfortably below the 200 day simple moving average and the psychological 1.3000 level, further downside may target 1.2636 level.      The only risk event that could temporarily save the euro is an official bailout request from Spain and that is not likely to happen this year.  The U.S. dollar will benefit from the Greek exit, but not as much as the commodity currencies and gold.  Traders might also want to start paying attention to the EUR/CHF pair.  While the peg has been a great success for Swiss National Bank (SNB), if it is tested and breached, this pair may have the biggest reaction.                        Watch List     Today started off slow and steady and pretty much opened up even or unchanged. We then proceeded to sell off just a tad, and it sustained this sell and stop movement until the close. Then news hit that the S&P 500 might be facing another downgrade. What ended up happening was a fast slide down on strong volume to close just a tad off the daily low. Again AAPL faced a HUGE sell day closing down another 20 points. The volume that was traded was twice the normal amount and as I had stated yesterday, it is getting closer to the 525.00 mark I had been speaking about. I now believe not only will the 525.00 price get hit, but the 500.00 price level could be in the near future. Now that is the BIG number for this stock. If it breaks the 500.00 in a flurry of trading, it can possibly be trending its way down to the 440.00 level in a very short period of time. Our algorithm detected a seller trend in AAPL back on 10/1 and it hasn't looked back.  This sellers trend or Bear market looks like it may stay until the Fiscal Cliff issue gets resolved. If it does not and they continue this into the 1st quarter of next year, there is no doubt the S&P will sell off hard and 1250.00 can be a very realistic number by the end of December. If you are long in the market protect your profits, and if the trend continues look to take advantage of the slide down. Open Position: CHKP Stocks to Watch: AAPL AMZN FSLR GS BAC C GOOG NFLX GMCR DIS HD MCD           Futures Data   Value Areas: ES 1391.75 / 1378.25  POC… 1388.00  YM 12885 / 12803  NQ 2612.50 / 2579.50         Notes from the Pit Click Here to Read       Steven Lee - Lack of Certainty in the Eyes of Volatility       IMPORTANT NOTICE: Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. Nothing in our website shall be deemed a solicitation or an offer to Buy/Sell futures and/or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on our site. Also, the past performance of any trading methodology is not necessarily indicative of future results.   DAYTRADING involves high risks and YOU can LOSE a lot of money. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those talked about in our site.

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