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It's "back to work" after the labor day holiday. In the new american economoy, back to work is often a misnomer. It's often more like get back to your part-time, low paying job so the BLS can count you as employed so Obama's recovery seem plausible. I've written ad nauseum about the goverment's interesting math when it comes to statistical releases, but it never ceases to amaze me the creative counting involving all things jobs. According to the Wall Street Journal: "More than four years after the recession officially ended, 11.5 million Americans are unemployed, many of them for years. Millions more have abandoned their job searches, hiding from the economic storm in school or turning to government programs for support. A growing body of economic research suggests that the longer they remain on the sidelines, the less likely they will be to work again; for many, it may already be too late. But the recovery isn't reaching many of the most vulnerable. For those without a high-school diploma, the unemployment rate in July was 11%. For African-Americans, it was 12.6%. For teenagers, 23.7%. Even more worrisome to economists are signs of a bifurcation in the labor market: For those unemployed less than six months, the odds of finding a job have improved steadily over the past year; the long-term unemployed have made almost no progress at all." Nothing like some upbeat numbers for a Tuesday. | | ---Larry Levin | | |
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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 Monte Hininger Congratulations to our student of the day Monte Hininger. Monte has mastered the reversal signal and it has helped him to stay in his winning trades longer. The money management techniques taught by Chris Mullaney in the Market Profile Basics room have helped numerous trade become profitable trading the E-mini S&P 500 futures. Congratulations Monte! | | 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 | ---Michael Shorr | | A few days ago I outlined one of the methodologies we employ in the trading class, the secured put sale. Today, let's look at a real life example of how one would use this. J. C. Penney Company (NYSE: JCP) has gotten a lot of attention, not all of it positive, from some of the biggest, most powerful investors in the world. The downtrodden retailer has changed CEOs and strategy in the hopes of changing the company's course. The latest shakeup has activist investor Bill Ackman selling his 18% stake at a $500 million loss (and perhaps even greater damage to his reputation). When a large position like this is liquidated it often signals a capitulation bottom. The stock has not fallen below $12 since 2001. While the typical investor might use a limit order to buy a stock or ETF at a designated price or lower, the options trader can do one better. This strategy has the same mathematical risk profile as a covered call. With a put selling strategy, there is an obligation to buy the stock at the strike price if it is assigned, allowing you to get into the stock at a discount. In fact, the true entry cost basis is even lower with the subtraction of the premium you earned from selling the puts. Sell to open JCP Sept 12 Puts at $0.50 or better. This cash-secured put sale would assign long shares at $11.50 ($12 strike minus $0.50 premium), which is about 7% below JCP's current price, costing you $1,150 per option sold. If the options expire worthless, you keep the $50 premium, earning a potential 4.3% return in 22 days. In other words, you're getting paid not to own the stock. | | |
| | | | | FOREX: Currency Spotlight | ---Ed Moya | | | | | The Commitment of Traders report last week highlighted a very large amount of speculative bets looking to short the Canadian dollar. When we look at last week's trading range, USDCAD started the week near the 1.05 handle and traded up to 1.0560 and as low as 1.0467. Limited strength despite the large increase of Canadian shorts to just less than 25k from 10k. The amount of speculative short bets was 60,334 versus 35,375 long the loonie futures contract as of the close on last Tuesday. The strength behind the loonie despite a plethora of shorts against should raise a cautious eye. The key price barrier of 1.06 has held up since October 2011 and traders should keep a close look on oil prices as the overwhelming strength earlier last week from the concerns of Syria may still provide some key support for WTI. Seasonality will also support the conflicting views, as price remains split over the last decade for the month of September. Volatility may step up over these next few weeks and traders should not be surprised if we finally break out of theese very tight ranges.
| | | | | STOCKS: Watch List | ---Charles Moon | | | | The markets slid again in a choppy session to close out August in negative territory. With the markets weighed down with worries over Syria, the Dow and S&P 500 had their worst monthly decline in over a year. The Dow closed down 30 points and the SPX closed down a little over 5 points, as a late rally the last 5 minutes of the session prevented the market to close at the low of the day. With the markets facing continued confusion without resolution as of late, the trading has reflected this mind state. If we see any resolution as far as Syria or tapering, expect the market reaction to be strong and swift. If no resolution is in sight, then we will continue to drift down under choppy conditions. If we see military action over the holiday weekend, it can spell trouble for buyers in the short term. We can see a volatile reaction in the futures markets. and that would leak over on Tuesday. It will be important to look at the pre-market trading to get a early glimpse of the market reaction. If no military action takes place, we can see a fast rally early on in the trading session, only to face aggressive sellers at key price points in the markets. The 1650.00 level in the SPX can provide a bit of resistance, and so can the 50 Day Moving Average at 1660.58 if the markets rally strong. The reaction at these levels can clue you in on directional plays in the markets. If these levels are broken with aggressive buying, we can see a short term rally take place. If not look for the fall out from the resistance levels. If the rebound is immediate to continue testing these levels, then buyers maybe looking to press the markets back to 1700.00 in the SPX. If the rejection at resistance carries the markets to new recent lows, then look for sellers to remain in control here. Either way, play the momentum properly and you can help create opportunities to capture short term profits. Open Position: FB Stocks to Watch: INTC AAPL GOOG IBM AMZN BIDU LNKD FB TSLA GRPN CTXS CSCO NTAP JBL BAC PRU WFC GS JPM MS NFLX WDC DIS CROX STZ NKE UA LULU CHKP JNPR POT GMCR VZ T HOG MON YUM MCD LOW HD LEN TOL V MA AXP DFS LVS MGM |
| | | | | FUTURES: Technical Data | | | | | ES 1633.75 / 1629.25 POC… 1631.00 YM 14806 / 14768NQ 3081.25 / 3070.75 | NOTES FROM THE PIT
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| | | | | COMMODITIES: Play of the Day | ---Patrick Assalone | | | | Gold continues to be volatile with the recent geo-political unrest. The overall long term trend continues to be higher. While we would consider reversal signals off the top of the large HVA, based on our educational methodology we are primarily looking for long entries, either off of reversals at 1385.00 or 1404.10 or break out above the contract high at 1430.00. Click here to watch video |
| |  | | 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. | | 
 
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