| | Take it to the Courts | | |  We can continue to complain about Chairman Bernanke and his easy money policies, or perhaps we can follow the lead of an angry German politician. Peter Gauweiler, a member of the CSU in the German Bundestag, along with others, filed challenges in the country’s top court stating that the European Central Bank must halt its bond-buying plan in order to preserve the principles of democracy, even if it causes “uproar” in financial market. According to Gauweiler’s lawyer, The ECB’s Outright Monetary Transactions program violates European laws and the constitutional principle of democracy. The court is reviewing seven cases filed over the OMT and the European Stability Mechanism at a two-day hearing. The as-yet-unused OMT foresees potentially unlimited purchases of bonds of debt-stricken countries that sign up to adjustment programs. Conceived as yields on Spanish and Italian 10-year bonds exceeded 7 percent, the OMT has helped the cost of borrowing for nations like Spain and Italy fall to levels not seen in more than two years. German Finance Minister Wolfgang Schaeuble defended the government’s policies, saying that Germany itself insisted on giving the ECB independence. According to a Forsa poll, nearly half of Germans want the court to stop the bond-buying program. Perhaps a precedent will be sent and even if the OMT program is allowed to continue, voices are being heard loud and clear that there is a growing movement of responsible economic policy. 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 Chief Market Strategist Alan Knuckman provides a daily morning update on the global action in stock futures, gold, oil and interest rates. |
| | | | | | | | | Congratulations to Blaine McKinstry Congratulations to Blaine McKinstry our student of the day. Blaine
made $350 trading the E-mini S&P 500 on Wednesday and has been an enthusiastic learner. He attended our trading advantage Live Event and continues to refine his trading knowledge. Congratulations Blaine! | | | 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 | The bank of Japan released its monetary policy statement today and as expected they said that they will keep their ultra-loose policy unchanged. They did say they were seeing signs of improvement in exports and the wider economy. They also added that "some indicators suggest a rise in inflation expectations". The announcement was a disappointment to many market participants as they held out hope that the central bank would have taken measures to address bond volatility. The emerging markets all were getting hammered partially due to the events in Japan. South Africa was hit especially hard with the rand trading down 1.5% and the JSE fell 2.3%. India, Thailand, Indonesia and the Philippines all experienced significant losses in their equities as worries about the Fed tapering QE compounded any individual problems these countries are experiencing. Today a lesson in trading account management. If you take a close look at the trades we put on, very rarely (if ever) do you see a trade in a company whose share price is less than $20.00. Why is this? The math behind our volatility constructs are the same for a company trading $10 as a company trading $100 right? You would be correct. Let's take two examples. Company ABC is trading $10. Let us assume we buy a broken wing butterfly spread for $0.25 and sell it out for $0.40. Great right? 60% gain. Let's assume that we did this spread 50 times. So we make $0.15*50*100=$750. Now company XYZ is trading $100. Let us assume we buy a similar broken wing butterfly at $2.50 and sell it out at $4.00. Same 60% gain. Let’s suppose we only do this trade 5 times to keep the overall investment in line with our ABC trade. We make 1.50*5*100= $750. Now when we are managing our trading activities, one very important component is trading costs. For most of our students, commissions are calculated on a per contract basis. Let's assume a $0.50/contract commission. With company ABC, we are trading a total of 400 contracts so; our commissions will be $200. Now our net profit on company ABC is $550. Our return is now 44% ($550/$1250). With company XYZ our commissions are only $20 because we did a 5 lot of butterflies. But, our return on investment is 58.4% ($730/1250). Remember: It's not the raw percentage gained on given trade; it's the amount of money that is in your account after you are done. You must figure in all costs. This includes commissions, fees, software and even hardware. |
| | | | | FOREX: Currency Spotlight | ---Ed Moya | | | The BOJ kept their monetary base steady and a rumor that a hedge fund(s) had to liquidate carry trades helped the yen have its biggest gain in nearly three years. The daily chart on USDJPY is displaying an exceptionally bearish corrective move that just had its first daily close below the 100-Day simple moving average. The last time price traded below this key indicator was last October, a time well before Shinzo Abe announced the platform that he will run on. Despite the technical corrective move and downward pressures mounting that Fed may have further headwinds that prevent it from tapering this year; the bond yields on U.S. treasuries are still trending higher and despite the 5% rally in 10 year JGBs, a healthy pullback is just what USDJPY needs before resuming its historic rally. Key support lies at the 93.50 -94.00 region, but traders should not be surprised if we see value buying well before these levels. |
| | | | | STOCKS: Watch List | ---Charles Moon | | | | What a wicked roller coaster ride we experienced in the markets today. The Dow swung over 100 points up and down several times throughout the day, and finished down over 116 points today. Some of the swings were attributed to the riots in Turkey and the initial drop was due to the BoJ's latest monetary policy disappointing the streets. The fallout was aggressive selling through out the day, and seeing volatility kick into high gear. With no other substantial economic news, we are looking for the volatility to continue into tomorrows trading session. Lululemon(LULU) took a sharp dive in after market trading yesterday when it was disclosed that CEO Christine Day will step down. Investors and institutional traders frowned upon the news, as the stock plummeted down over 17.5% today. I would look for a rebound soon as the shock wears off, this can be a great buying opportunity as it can make a climb higher. It will be facing several hurdles from a technical stand point as it has closed below both the 200 and 50 day moving average for the first time since April 9th. The streets are also watching closely to see who gets appointed to the open CEO positions, because if investors disapprove of the new leadership, the stock will be hard pressed to move back up to recent highs. Look for the rebound here to take advantage of for a short term buy play. With the way the market pressed down today, we may see a nice rebound tomorrow, It would not surprise me one bit to see the markets flip back and forth like it did today, as volatility is the main course on this menu. Pre-market trading should give us some insight for the sentiment of the market for the day, but again with these aggressive movements taking hold, anything can happen at anytime. Best play here is to look short term and take profits early. Holding onto winners too long, can turn into losing trades very quickly. Open Position: INTC, ADBE, JBL Stocks to Watch: INTC AAPL GOOG IBM AMZN ADBE FB TSLA GRPN CTXS CSCO NTAP JBL 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 HOG YUM LOW HD LEN TOL V MA AXP DFS LVS MGM TSL FSLR JASO |
| | | | | FUTURES: Technical Data | | | | | ES 1634.50 / 1625.00 POC… 1625.25 YM 15200 / 15100 NQ 2978.25 / 2958.75 | |
| | | | | COMMODITIES: Play of the Day | ---Patrick Assalone | | | | Gold prices continued to head lower as the intermediate trend is
defined lower. Based on our educational methodology, we are looking for short entries up above with a cement ceiling or a reversal signal at 1389.70 with a target of 1376.00. We also looking for entry signals below the contract low at 1364.50. Click here to watch |
| |  | | 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. | | | | | | 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. Trading Advantage LLC provides only training and educational information. By accessing any Trading Advantage content, you agree to be bound by the terms of service. Click here to review the terms of services. 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. | | 
|
No comments:
Post a Comment
Keep a civil tongue.