| | Under the Mattress | | 
Cyprus has set the precedent that private assets in the Eurozone are anything but that. Yes, on Tuesday, their parliament overwhelmingly rejected the tax on the bank deposits as a condition of an international bailout and there were rumors of a revised draft of the deposit levy that would exempt savings below 20,000 euros ($26,000) from the 6.75 percent tax BUT alarm bells should still be sounding. This proposed bailout may have averted the immediate risk of disorderly default and Euro exit, but economically it is completely insane and dangerous, not just for Cyprus, but for other countries too. Once again, the US equity markets opened lower but managed an afternoon rally off the lows after the Cyprus parliament vote and the European Central Bank uttered the magic “L” word, saying it will provide “liquidity within the existing rules.” Even with an increase in volume and a modest spike in the VIX, there seems to be a “who us, why should we worry?” attitude. And maybe there is no reason to worry. If you don’t have money in the bank, you can’t lose it. The Wall Street Journal reported new data that shows 57% of Americans reported less than $25,000 in household savings and investments. Only about half of the 1,003 workers and 251 retirees surveyed said they were sure they could come up with $2,000 if an unexpected need were to arise in the next month. Let’s hope these folks have money under the mattress. Maybe the other 43% should follow suit. Trade well and follow the trend, not the perma-bull OR perma-bear "experts." | ---Larry Levin
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 | | Congratulations to Zoe Leung! he Student of The Day Today is Zoe Leung after a great performance over the last couple days Zoe was a able to capture a nice profit and continue to learn from Steven Lee!!! Zoe is one of Trading Advantage's star students and has grown so very much with Steven and the program in a short period of time. We are proud of you Zoe and stay committed to your success! Let's hear it from Zoe:
Results:
01:51 pm Zoe Leung: i got in 10 lots of VXX at 0.41 and sold 10 lots of VXX at 0.88 credit. Including round trip commissions, I got a net profit of $421.76.
01:52 pm Zoe Leung: I also followed your trades on how u look at SPY and VXX and made my profits in my VXX stocks. Thanks Steven!!!
Quotes:
01:53 pm Zoe Leung: still learning...i learned a lot....One of the hardest things I have learned is how to take a loss when i have to. Thanks!!!
01:55 pm Zoe Leung: Steven is really the expert of VIX and VXX.
| | 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 Dan Obrien: The Educator of The Day Today is Dan Obrien for doing a stellar job of educating our students, calling high probability trade signals and making sure that our students had the proper information to keep them on the right side of a trend that started early!!! Dan is the best when it comes to the concept of situational awareness and making sure we keep the market in context! Today was a great example of how important this is as the Cypress banks are BUST..... ....news like this has a tendency to move the market and you want to make sure you are on the right side of these moves! The education today focused on the news and "reading the tape!" This is why it is so valuable to learn from the professionals, you get the "on-the-job" training with real life situations and examples! Without this information today a newbie may very well have been slaughtered! Stop by and see what Dan can do for you;) Let's check out those results:
results:
09:26 Dan Obrien: VA sell = +2.50
10:02 Dan Obrien: KH buy = b/e and +1.00
14:08 Dan Obrien: Algo sell = +1.00 & +2.25
14:46 Dan Obrien: Algo sell = -.25 & +.75
Based on the signals generated in the Level I S & P Signal Classroom there was a potential profit of +7.5 points in the ES which is +$375.00! Dan was 4/4 on the trade signals today and was potentially filled on 7 contracts all together! Nice job Dan! |
OPTIONS: Volatility Commentary ---Steven Lee / Michael Shorr
| Housing starts of 917K are up a hair from January, That puts year on year growth at +27.7%. This marks the fastest pace of starts since June 2008. The major news of the day was the bailout vote by Cyprus' parliament. Cyprus' ruling party abstained from the vote thereby assuring the measure's failure. From Steven Lee citing Bloomberg: "ECB Says It Will Provide Liquidity to Cyprus Within Existing Rules"... Not sure what exactly that would entail, but I think this news is the reason for that spike in SPX. The important lesson for today is correlation. In a market where macro forces are not the dominant ones, asset classes can seem to drift off on their own individual paths. Looking at each trade in your portfolio may look good in its own right. When macro forces take hold, correlations (negative or positive) become very strong. What is essential is to identify how your portfolio is correlated and how individual holdings will tend to react to macro trends. For example, the best of companies generally still decline in price in a well-defined down trend (positive correlation). On the other hand, when equity prices fall, implied volatility (VIX) tends to go up (negative correlation). It is vital to construct a portfolio that identifies these risks and doesn't compound them. |
FOREX: Currency Spotlight ---Ed Moya
| | Yesterday, Bank of Japan head Mr. Shirakawa gave his final press conference. It marked the early end of his failed tenure along with his two other deputies. His five year term was supposed to end on April 8th, but he decided to make way for Shinzo Abe’s guy, Haruhiko Kuroda. Mr. Shirakawa told parliament that risk appetite has helped contribute to the yen’s weakness. Mr. Kuroda and his two deputies, Kikuo Iwata and Hiroshi Nakaso will take office on Wednesday. The ball is now in Shinzo Abe’s court. Can his BOJ dream team push forward his agenda unlimited easing to fight deflation? If history is a sign for anything, the answer should be an easy no.
This time it is different, but this time trading the weaker yen could get ugly. Risk aversion from Europe could help contribute to a risk off environment that could help the yen move higher. The new BOJ leadership will need to pass their unlimited easing plans through parliament and that should face severe headwinds.
Currently the markets are not heavily positioned long USDJPY as they were the other trading week. With the economic outlook remaining strong for the U.S. economic situation, traders could look for some limited downside until it becomes time for the BOJ to act.
If we see price have a daily close below 94.00, a potential reversal may gain momentum and target the 92.45 level. If valid, traders could look for a corrective move lower towards the 90.50 area. If price however recaptures 96.00, upside targets may look for a push higher towards 97.42. |
STOCKS: Watch List ---Charles Moon
| With the market range being fairly wide today, we saw swings both up and down throughout the day. This of course was fueled by the mess in Cyprus needing a bailout after they invested in the Greek debt with assurance from the ECB thinking it was a "wise" investment so to speak. Well now they are facing a dramatic turn of events and they brought to Parliament today the bill of taxing bank accounts to help fund the bailout needed an economic collapse. This was the reason the market slammed down yesterday before recovering, and today it slammed down fast once again off the news that the Cyprus finance minister handed in his resignation which was not accepted by the countries president. The market actually turned and rallied once it was announced that the Parliament voted against the taxation. Now this is just a temporary measure and we will know more on Thursday when they reconvene once again. Not surprising here is that the Dow once again finished in positive territory. God bless the ability to print money with no recourse or repercussion. We also have the FED meeting announcement tomorrow and while I don't expect much from this meeting, we can easily see the market slide once again if Ben Bernanke speaks on the easing policy. If they give an actually timeline on when the easing can possibly end, we can see a significant sell off here in the next few days. Market action is generally good on FOMC days, so look for market action and volatility to pick up during tomorrows session. With our two open short positions( RHT, X) benefiting from the sell off, we are still continuing to look at both sides of the market to take advantage of. We called a long in INTC today looking to get in on a great value price. Now with what has been happening in the markets, we do have a tight leash on this trade with a small risk parameter, and we will be watching the overall markets closely here. If the markets start sliding fast, we might look for a early exit with a small loss. It is important to pay close attention to the headlines as this can drive the market through important technical levels. I am looking at $21.00 as the first initial support level followed by $20.65 as the next level to lean on. If these levels collapse it might be time to call it a day. If they sustain the support levels as the $21.00 price had held today, then the upside play just might be right and we can be in at a great price point. Position: X, RHT, INTC Stocks to Watch: INTC 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 LOW HD LEN TOL |
FUTURES: Technical Data
| Value Areas: ES 1545.75 / 1535.25 POC… 1538.00 YM 14402 / 14332 NQ 2787.50 / 2764.00
| NOTES FROM THE PIT
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| COMMODITIES: Play of the Day ---Patrick Assalone | Crude Oil futures fell sharply Tuesday to below $93 a barrel, as
uncertainty surrounding a bailout plan for Cyprus clouded the outlook
for energy demand in the euro zone. We have moved to the bottom of a
large area of consolidation and may have found support down here.
Based on our education methods, we are not looking for short signals
until we break out lower and would be instead looking for a long trade
to the top of the High Volume Area. Click here to watch video
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