An Ignoble Experiment: Go Green

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Go Green

Don't worry, this isn't a public service message trying to get you to recycle. Instead "Go Green" refers to the Tuesday markets.

The Dow completes its 19th week in a row with a green close on a Tuesday - so yes, there are no superlatives left. As a gentle reminder, since February 1st, the Dow has gained 9.85%; absent Tuesdays it is up a mere 0.5%. Despite equity strength, bonds rallied, VIX rallied, the USD ranged violently to end unchanged, and commodities drifted lower on another dismally low volume day. Correlations between stocks and the rest of risk-assets have completely broken down today.

With Ben Bernanke speaking before the Joint Economic Committee of Congress, and FOMC minutes due out in the afternoon, we might have both wild and flat market conditions today. Or we might have more dull in listless following the early week dearth of data.

Who knows what sort of nuttiness will ensue. Watch for the activity to come in early morning, and also in the afternoon. Conditions should be flat with some choppiness, but do look out for the lunch hour rally also.

So far, it's been go green or go home.

Trade well and follow the trend, not the perma-bull OR perma-bear “experts.”

---Larry Levin

In conjunction with TheStreet.com and Bar Chart, Trading Advantage Senior Market Analyst Alan Knuckman provides a daily morning update on the global action in stock futures, gold, oil and interest rates.

Congratulations to Wendy Rosgen

The Student of The Day today was Wendy Rosgen for her application of the trading techniques taught in the Beyond Buy and Hold Level 4 Classroom. She has had successful trades over the past couple of days in MS, DFS and TS. Equities educator Charles Moon has been impressed with Wendy's agressive trading style. Congratulations Wendy!

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.

OPTIONS: Volatility Commentary

---Steven Lee / Michael Shorr

Yesterday afternoon, noted dove and Chicago Fed Chief Charles Evans had some pretty optimistic tones to his speech. He says he sees improvement in the labor market and claimed the U.S. will generate "self-sustaining growth" in 2014 at which time the economy will "hit escape velocity". Things are business as usual over at JPMorgan. The shareholders voted to keep Jamie Dimon in both roles as the Chairman and CEO of the company. The vote to separate the two positions received about 32% support. Last year, there was about 40% support. Also, the entire board was re-elected to their posts, including risk committee member Ellen Futter. She received a 53.1% positive vote. A bit of surprise from FRBNY President Bill Dudley. At a gathering in Japan he said that the uncertainty in the US economy "has him unsure" if the next QE move will be up or down. Some other highlights (from zerohedge):

One of the many markets Steven Lee analyzes is natural gas. Its ETF is UNG and this is the primary trading vehicle he employs. Per Bloomberg: "Natural gas futures gained for a third day in New York to run air conditioners." “The abrupt change in the weather, with above-normal temperatures in the eastern half of the U.S., has triggered concerns that storage injections will fall off sharply,” said Teri Viswanath, director of commodities strategy at BNP Paribas SA in New York. “The market will likely respond by pushing the front of the curve up closer to the highs set in April.” So we have a pretty good fundamental basis for a bullish play. Now we look at the technicals. UNG has been in a bullish pattern since May of 2012. The slope of the bullish trend has been increasing since this March. The realized volatility's slope has turned positive and our proprietaryVolatility Indicator has indicated increased volatility. Also, the stock is trading above all of its moving averages. This technical evidence combined with the strong fundamentals generated a trade signal to buy the UNG June 22/24/25 Call Butterfly Spread.

FOREX: Currency Spotlight	---Ed Moya

The IMF gave their 2 cents regarding the Swiss economy and the bottom line for traders is that the SNB may use any strong EUR/CHF rallies to lower their currency exposure. Since the 1.20 peg has been in place, we have witnessed a steady defense of that key level. The IMF report highlighted: With the exchange rate floor in place for over a year, the Swiss economy has been relatively stable, though GDP growth decelerated, and inflation remains negative. The chance for further weakness with the franc however may not be an easy one-way move. The report suggested the SNB address its unprecedented balance sheet size. They said, “Directors encouraged the authorities to consider introducing negative interest rates on excess bank reserves if appreciation pressures reappear. The authorities should also take full advantage of any capital outflows to unwind past currency interventions.” Traders may need to trade with wider stop losses on any short positions with the franc.

STOCKS: Watch List	---Charles Moon

Well this is Tuesday and of course we finished in positive territory. This makes it 19 weeks in a row we have rallied and closed in positive territory. This continued buying on Tuesday's are due to Monday's being typically down this year. We have rarely had 2 losing days in a row since the start of this year, and the prevailing uptrend/nonstop buying continues. The buying continues because we have the Easing in play, and as traders and investors alike will pay close attention to Ben Bernanke tomorrow, I highly doubt we will see an ending to easing anytime soon. FED member Bullard reiterated that exact point today. Look for new high to continue on a weekly basis as nothing short of a catastrophic event will stop this rally. The Retail Sector is still climbing strong here in recent weeks. In particular stocks that are offering athletic apparel has done well. Stocks like Nike(NKE), Under Armour(UA), and Lululemon Athletica(LULU) have risen to 52 week highs continuously here, and they still have momentum behind them to create new highs once again. Overall I am particularly bullish in this sector, but I caution you about being hyper aggressive as these stocks can have severe pullbacks. I do like the athletic apparel companies, and I also like the high end consumer goods companies such as Tiffany & Co(TIF), Coach(COH), and Micheal Kors(KORS). Look for the short term play as some of these stocks are trading at all time highs, and pullbacks off these highs must be expected. Look for the uptrend to continue here in the intermediate term. Open Position: LVLT Open Position: LVLT Stocks to Watch: INTC AAPL GOOG IBM AMZN PCLN BBRY FB LVLT CHKP CTXS CSCO BAC C PRU WFC GS JPM MS CMI CAT NFLX WDC GE AIG LULU LNKD DIS KORS COH FOSL CROX STZ NKE UA CHKP JNPR POT GMCR HLF HOG YUM LOW HD LEN TOL V MA AXP DFS LVS MGM TSL FSLR JASO

FUTURES: Technical Data

ES 1670.25/ 1663.25 POC… 1668.00 YM 15385 / 15325 NQ 3031.00 / 3016.00	NOTES FROM THE PIT Click Here To Read

COMMODITIES: Play of the Day

---Patrick Assalone

Gold: The sharp depreciation of the Euro and Aussie dollar during the previous week may have partly contributed to the decline of bullion prices. If these currencies will continue to depreciate against the USD, they might pressure down precious metals.

Based on our educational methodology, we are looking for short entries with the long term defined trend still being lower. Look for opportunities to get short at 1368.20 with a possible break down to 1358.80.

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