| | Barnyard Economics | | 
Which came first - the chicken or the egg in the new world of Barnyard Economics??? If the first two months of 2013 market’s action could be compared to the farm, the crop would be poor and the animals unproductive, but the farmer would be enjoying a banner yea...except on Mondays. Because alas, for the eight Monday in a row, the S&P 500 closed lower. The farmer (and the markets) might opt for a three day weekend in the future. Whether or not these patterns and statistics have become self-fulfilling prophecies is hard to ascertain. We do know that the market opened all gangbusters Monday with everyone from the cows to the pigs buying stocks. By mid-morning, things got dicey as we heard Chicken Little’s cry, not the sky is falling, but the sequester is coming. With no resolution in Washington and March 1st fast approaching, federal spending will be reduced by $85 billion in the final seven months of this year and by $1.2 trillion over the next nine years. Another culprit seemed to be Italy, as we learned there may be a barnyard government. Initial results from Sunday's election showed the center-left party of Pier Luigi Bersani leading in both chambers of parliament, but later in the day Italian state TV station RAI said none of the four main groups running in the Italian parliamentary election is likely to win a majority in the Senate. A coalition or party must win at least 158 of the 315 Senate seats to gain a majority in the upper house, which a government would need to pass legislation. Italian stock market proceeded to drop 4% from pre-poll headlines and Europe's VIX pushed back above 21.5%. In addition, the Euro fell out of bed versus dollar dropping down to 1.3141.
Whether or not the barn doors have swung open and the macroeconomic fundamentals will upset the cozy liquidity production machine, we shall soon see. Trade well and follow the trend, not the perma-bull OR perma-bear "experts." | ---Larry Levin
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 | | Congratulations to Munawar Soomro! Results: Results:
[10:40 am] Munawar Soomro: Up $120.00 this morning just from three early morning signals from awesome Ed! Just trading one each mini-lot.
This is a great example of the fact that it is important to learn to walk before you learn to run!!! It isn't always about the amount of money that you make... ...it has a lot to do with staying within your risk parameters!! Quotes:
[10:45 am] Munawar Soomro: Ed is everything I look for in instructor/mentor! He not only generates mostly profitable signals, he teaches as well! So I can make money while learning! Can't beat that!
[10:42 am] Munawar Soomro: Ed, are you filled on USD/CAD swing sir?
[10:44 am] Munawar Soomro: Cool, I can get in market now. Thanks!
[10:48 am] Munawar Soomro: Thanks!!! | | 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. |
| | Congratulations to Ed Moya: The Educator of The Day today is Ed Moya who posted a very strong day based on several trade signals that were generated!!! Ed is dedicated to his students and is always willing to put in extra time and effort to make sure they get what they need! Based on these four signals that were generated there were three winners and one potential loser for a grand total of $722.00.
Here is how these signals break down:
Sell Limit Gold 1597.90, Limit 1580, Stop 1602.o Bearish Gartley, perfect symmetryo invalidatedo Sell Stop GBPUSD 1.5140, Stop 1.5165, Limit 1.5100o Stop moved down to 1.5110o +30 pips, $300o Buy Stop EURGBP .8778, Stop .8760, Limit .8800o +22 pips, $330o Sell Stop Gold @1588, stop 1590.10o Profit target set later @1581o Breakdown key supporto -$2.20, -$220o Sell Stop EURJPY @ 124.30, Stop 124.65, Limit 123.50o Move Stop Down to 124.00o +30 pips, $322 |
OPTIONS: Volatility Commentary ---Steven Lee / Michael Shorr
| Europe closes a wild day higher across the board, but giving up nearly all of their earlier gains. Stocks popped at the open following Friday afternoon's rally in the US and then soared after early polls showed Italians voting for the pro-austerity party led by Pierluigi Bersani. As the results came in, it showed that Berlusconi has made significant headway. If Berlusconi does garner enough support, it could force another election and further cloud the Euro zone's unclear future. This week promises to be an interesting one with Chairman Bernanke speaking in front of the Senate Banking Committee on Tuesday. We also have a slew of economic reports due for release with Consumer Confidence and New Home Sales on Tuesday, Durable Goods and Pending Home Sales on Wednesday, GDP on Thursday and Personal Income and ISM Manufacturing Index on Friday. Also, lest we not forget, sequestration potentially kicks on Friday. In an otherwise uneventful day we are monitoring a possible set up for a trade. When the Euro zone stocks reversed their gains, we noticed a potentially significant indicator in the VIX complex. We are starting to experience backwardation. This means that spot VIX is above the futures on the VIX. This can be an indicator of impending (or perceived) volatility in the overall market. The longer amount of time that the spot trades over the futures the closer the futures will trade to the spot VIX. We are continuing to monitor this space. We have already generated a trade signal for VXX late last week. |
FOREX: Currency Spotlight ---Ed Moya
| | EUR/JPY fell 642 from the session highs after exit polls suggested the Italian election had Silvio Berlusconi ahead of Bersani. At one point, a 224 plummet in 8-minutes. The selloff continued despite reports that Bersani had a small lead because expectations grew that we will need to see another round of elections. When reports surfaced that Monti would not secure the 10% needed for the coalition with Bersani the risk-off selloffs continued. Executions were terrible during these times and several were eaten alive, while we stayed away. The election outcome will eventually provide some strong trending opportunities, but the volatility still remains high and it will only pick up after we hear from Bernanke. If you are not used to trading in this volatility, there is no shame in waiting this out. The important thing is winning and not persistence and trying to capture part of the extreme moves that are occurring. We have witnessed 1000 pip moves in 15 minutes and we will expect to see large moves like that in the future. |
STOCKS: Watch List ---Charles Moon
| The market opened higher and pushed up over 80 points before selling off to levels that haven't been seen in quite some time. The Dow closed down 216 points and that is a far drop from the highs. The market reacted this way off the news of the Italian election, and it's obvious they were not happy with the results. Interesting to see what the reaction will be tomorrow, but with this hard selling you have to expect some sort of a rebound coming. I do feel if we break down past the 1497.00 level in the S&P and can't break back above, then watch out below as we will fall and will be venturing into bear territory. I will say the technical levels did not matter as much today as this was a headline driven move, but at some point the technical aspect will come into play. The 1497 price level is a very important number, and it should be watched closely as this can be an early indicator of a bear market.
The Financial Sector got hit today on the news, and Goldman Sachs(GS) was one of the stocks that dropped quite a bit today. Goldman dropped almost 6.5 points (4.2%) not only on the Italian election, but also on news that one of the Goldman Sachs Salesman is being investigated by the FBI in a insider trading probe. That was just more fuel for the fire today in this stock. For awhile there it held at several technical levels, but when the market made the hard push down in the early afternoon session, the flush was fast and furious with strong momentum. With the run banks have been on the last two months. Look for a steep pullback or even a full turn around as we can see sustained momentum to the downside.
With news hitting the wire early on, we can see more selling taking place tomorrow. Watch for the reaction, and the possible reversal taking place like it did today. If the reversal doesn't take place, then expect the bears to wake from hibernation and to grab control of the market this week. Open Position: X Stocks to Watch: AAPL GOOG IBM AMZN PCLN BBRY FB CTXS BAC C GS CMI CAT NFLX WDC LULU LNKD DIS KORS FOSL X QCOM STZ NKE CHKP JNPR POT GMCR HLF |
FUTURES: Technical Data
| | Value Areas: ES 1518.75 / 1494.75
POC… 1487.25
YM 14014 / 13858
NQ 2755.50 / 2719.50 | NOTES FROM THE PIT
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| COMMODITIES: Play of the Day ---Patrick Assalone | The wheat market has been in a defined downtrend as we continue to
look for short entries. The market finally flushed towards the end of
the trading session on Monday as it made a new run towards the
contract lows. Our methods teach to not buck the trend so until we see
the point of control closing higher for consecutive sessions, our
intermediate and long term time objectives will be short trades. View Video Here
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