19
Nov

FT: Sefs one year on

The US electronic venues for swaps trading have been in place for a year. Laurent Paulhac, chief executive of ICAP Sef, explains to Philip Stafford, editor of FT Trading Room, what their impact has been and how the rules may need to be fine tuned.

FT Trading Room

19
Nov

Trading the Extended Intraday Run

How do you trade run-away markets?  Very carefully!

Let’s chart the intraday stock market action and focus on a kindergarten-simple strategy that beats virtually all others when the market forms these sort of creeping-trend patterns.

With the market overextended and negatively divergent into resistance, logic and most strategies suggested odds favored a retracement lower.

However, the alternate “unexpected” thesis planning called for a strong breakout on a trigger to new highs, which would be generated by another short-squeeze and stop-losses triggered by the bears.

We ALWAYS plan a logical/dominant thesis and then buffer it with an equally plausible alternate thesis to be objective and allow us time to adapt to real-time market changes.

That’s what I repeatedly stress and teach to members of the Premium Strategy Planning reports each night.

I also strongly highlighted this “violent, upside break” potential in this morning’s Market Briefing with TradeStation.

Our plan often calls for larger price movement to occur IF the alternate (unexpected) thesis triggers.

That’s because a lot of traders will “do the right thing” according to logic and then wind up trapped, forced to cover losing positions quickly.

That’s how Trend Days like this develop and sustain themselves the whole session.

So how do you trade these rare but real events as they develop? It’s actually so simple – yet hardly anyone does it.

Here’s the same chart with all the clutter and irrelevant information removed:

As I stress to members, in these rare breakout events that create Trend Days, you should focus your attention on price and its relation to continuously rising moving averages.

In this case, I’m showing the green 20 EMA and the blue 50 EMA on the 5-min intraday chart.

What do we do?

Simply buy pullbacks/retracements that touch or test the rising 20 or 50 EMA.

You can also wait to trigger your buy signal on a break above a falling “flag” trendline.

Target at least the prior high (exit on touch) or hold for a slight movement above the prior high as the trend continues (exiting on the break under a rising trendline).

Trail your stop under the 20 EMA and repeat this process as long as price continues trading higher (meaning, stop buying pullbacks that trade under the 20 and especially 50 period EMA).

The more you think about it, the more you’ll hesitate, and the fewer trades you take.

If you think too much, you’ll even short the market and will CONTRIBUTE to the upside action when you eventually stop out at a higher level.

During rare but real events like this, follow price… and nothing else.

Simple strategies work.

Afraid to Trade Premium Content and Membership

Follow along with members of the Daily Commentary and Idealized Trades summaries for real-time updates and additional trade planning.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).


Afraid to Trade.com Blog

11
Nov

Nov 10 More Bullishness Market Update and Stock Scan for the Day

We have “more of the same” upside action in the stock market, defying bears all the way to even more new highs.

The short-squeeze continues and we have a repetitive morning pattern to study on the intraday frame (as seen Friday) which continued today.

Here’s our updated levels as the S&P trades through more all-time highs:

Our key pattern is the highlighted region where price traded down in the morning session, only to see a surge of impulsive, intervention buying that helped propel the market higher and trigger the stop-losses of the bears (short-sellers) at each breakout to new highs.

Patterns repeat and we continue to observe this pattern propelling price to new highs.

It’s difficult to buy a grossly extended market, but this ‘creeper trend’ has become the norm lately, so keep that in mind (we have to apply different tactics to impulsive movements like this).

When the market keeps doing the same thing, we’ll keep analyzing and trading it the exact same way.

Breadth is slightly mixed – much like the market at the moment:

Money flow – as seen by Sector Strength today – is strongest in the DEFENSIVE Sectors of Staples, Health Care, and Utilities although there’s a bright spot in Financials and Technology.

Our worst performing sector again is Energy as oil prices continue to struggle to reverse off a low.

We have potential bullish trend continuation plays in the following stocks:

CSX, Eli Lilly (LLY), Marriott (MAR), and International Paper (IP).

Potential downtrending candidates exist in stocks showing relative weakness today:

Grainger (GWW), Time Warner Cable (TWC), Gamestop (GME), and Michael Kors (KORS).

Afraid to Trade Premium Content and Membership

Follow along with members of the Daily Commentary and Idealized Trades summaries for real-time updates and additional trade planning.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).


Afraid to Trade.com Blog

9
Nov

Nov 7 More Upside Action Market Update and Stock Scan

We have “more of the same” upside action in the stock market, defying bears all the way to new highs.

The short-squeeze continues and we have a repetitive morning pattern to study on the intraday frame.

Here’s our updated levels as the S&P trades through all-time highs:

Our key pattern is the highlighted region where price traded down in the morning session, only to see a surge of impulsive, intervention buying that helped propel the market higher and trigger the stop-losses of the bears (short-sellers) at each breakout to new highs.

Patterns repeat and we continue to observe this pattern propelling price to new highs.

It’s difficult to buy a grossly extended market, but this ‘creeper trend’ has become the norm lately, so keep that in mind (we have to apply different tactics to impulsive movements like this).

Breadth is slightly mixed – much like the market at the moment:

We have three outstanding sectors today:  Materials, Energy, and Utilities.

This neither adds confidence to the bullish breakout to new highs, but due to strength in Materials, it neither gives the bears ammunition to claim a bearish signal from sector money flow.

Surprisingly, the weakest sector by far today is Health Care.

We have potential bullish trend continuation plays in the following stocks:

Iron Mountain (IRM), Monster Beverage (MNST), Target (TGT), and Whole Foods Market (WFM).

Potential downtrending candidates exist in stocks showing relative weakness today:

Humana (HUM), First Solar (FSLR), United Health Group (UNH), and Disney (DIS).

Afraid to Trade Premium Content and Membership

Follow along with members of the Daily Commentary and Idealized Trades summaries for real-time updates and additional trade planning.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).


Afraid to Trade.com Blog

8
Nov

4 Traders Discuss the Upcoming Market Move – Join Me Monday 1pm EST

Nov 7, 2014: 10:23 PM CST

Start next week with a live market panel discussion about the week ahead!

Join me this Monday at 1:00pm EST as part of a live discussion panel with TimingResearch.

The panel will discuss this critical phase of the market and how to avoid the risks to come.

You’ll also discover where they see the best opportunities.

My good friend and colorful colleague Dave Landry will be hosting and if any of you are familiar with him, you know there’s never a dull moment with Dave!

Click here to learn more and sign up!

Join us and you’ll become a part of TimingResearch’s massive social experiment to develop a crowd-sourced sentiment indicator.

You’ll gain an edge that is unseen by the general public.

Each week, TimingResearch surveys a large and diverse group of traders to get their thoughts about current market conditions.

Next they use proprietary formulas to distill that knowledge into a weekly report that comes out on Sunday afternoons.

Can’t attend? Register now anyway in order to receive the archived recording if you are not able to attend live.

Date and Time:
- Monday, November 10, 2014
- 1PM ET (10AM PT)

Guests:
- Dave Osmond of Metastock.com
- Corey Rosenbloom of AfraidToTrade.com
- Steve Lentz of OptionVue.com

Guest Host:
- Dave Landry of DaveLandry.com

I can’t wait to see you there! And hear what Dave has in store for us…

Corey


Afraid to Trade.com Blog

6
Nov

Stepping Inside the Breakdown in Gold to Plan Nov 5

Gold can’t seem to find a suitable support level from which to rally as the downtrend continues.

Let’s update our Gold charts, note the breakdown, and then identify price levels to watch.

Here’s two quick perspectives on the Daily Chart (a near and far perspective):

The first chart shows the longer term downtrend that began with the 2011 high just shy of $ 2,000 per ounce.

Price has traded in a downtrend against this level ever since the lofty peak.

However, the $ 1,175 and $ 1,200 level was supposed to hold as a support level, but sellers instead took price lower, resulting in a breakout impulse as buyers and funds were forced to liquidate positions bought into the expected support target.

Here’s a zoomed-in view of the most recent action:

The tighter perspective emphasizes the most recent price action and the failure to hold $ 1,200 as support.

Clues were present in the distribution volume where the bullish price rallies were met with reduced volume compared to the more active selling pressure on the price declines (which were actually in the direction of the higher frame).

As logical as reversal trading strategies may be, Gold reminds us why they are riskier than pro-trend strategies and why new traders should avoid the strong temptation to call tops and bottoms.

Bigger price movements tend to develop when markets “surprise” the majority, or do something that defies logic (for example, shattering a long-term support level).

Distribution volume continues to be strong as gold crushes to new lows under $ 1,200.

We can take the perspective even closer to the intraday frame for a lesson and strategy for the next swing:

For a quick educational lesson, one of my favorite trade set-ups is the combination of a Higher Timeframe Resistance Level (pure price) as price touches this level with Lower Timeframe Negative Divergences.

The longer the negative divergence, the better it is to expect price to reverse down against this level.

The swing trade developed into the $ 1,250 level as price traded down away from this level toward the expected floor of support target into $ 1,200 for a successful outcome.

Now, we have a “failure to bounce” or “failure to launch” higher off the $ 1,175 and $ 1,200 support levels.

The result was an impulsive movement lower – joining the higher timeframe trend – as buyers liquidated positions.

Price gapped once again lower this morning down away from the prior gap-into-consolidation zone near $ 1,170.

Focus your attention on the lower frames and the impulsive downswing in price.  Do note the small positive divergence into $ 1,150 and the slight pick-up in bullish volume into this level (green bars).

It wouldn’t be surprising to see at least a bounce off $ 1,150… but if sellers push the price under $ 1,150, we could see even more impulsive selling as more traders liquidate “can’t fail” bullish positions (that failed).

Follow along with members of the Daily Commentary and Idealized Trades summaries for real-time updates and additional trade planning.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).


Afraid to Trade.com Blog

3
Nov

Three Knee-Jerk Reactions to the Federal Reserve End of QE Announcement

Oct 29, 2014: 2:35 PM CST

The cross-market landscape reacted predictably to the end of the QE3 policy experiment and we’re monitoring follow-through from these initial movements.

Let’s take a look at three key markets and how they reacted to the expected news:

A quick, zoomed-in perspective shows a knee-jerk sell-off in Gold which was accompanied by a knee-jerk buying surge in the defensive TLT (Treasury ETF) and the US Dollar Index (seen here as the UUP ETF).

A broader perspective puts the knee-jerk reaction in context:

The Dollar surged as Gold collapsed under support.

US Stocks bounced around after the news but generally traded lower.

Keep in mind that the end of QE3 at the October meeting was not a surprise to markets.

Continue monitoring these typical movements – into Risk-Off areas – as the rest of the day develops and of course as we slide into the weekend.

Afraid to Trade Premium Content and Membership

Follow along with members of the Daily Commentary and Idealized Trades summaries for real-time updates and additional trade planning.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).


Afraid to Trade.com Blog

1
Nov

Join Me and 50 Other Speakers Live at the Las Vegas Traders Expo

Oct 31, 2014: 8:27 AM CST

Be our guest live at the rapidly approaching Las Vegas Traders Expo!

The special event will take place November 19 – 22 at Caesar’s Palace.

You’ll be able to meet fellow traders, hear in-depth presentations from leading trading educators, tour the exhibit hall to see new products and software (and ask questions directly to experts), and network with colleagues whether you are a new or experienced trader.

Register today and start planning your trip to Vegas!  This is the link to learn more information and register.

I’ll be presenting live Saturday, November 22nd on “Insider Strategies to Trading Three Classic Price Patterns

I will incorporate real-time market examples that are showing these patterns (and discuss trading opportunities).

You’ll also be able to hear from more than 50 leading educators including John Bollinger, Rob Hanna, Toni Turner, Larry Williams, John Hoffman, Andrew Cardwell, Al Brooks, Tom DeMark (just to name a few!).

Live events allow you to network with fellow traders and share your stories of success and struggle – all designed to build a community and friendships among colleagues.

I’ve always enjoyed the Traders Expos and will look forward to seeing you there!

Corey


Afraid to Trade.com Blog

31
Oct

Fed Aftermath Market Update and Stock Scan for October 30

At the end of QE3, stocks continued higher on the reported GDP growth and the S&P 500 tagged the underside of the 2,000 index target.

Let’s update our levels and note the top trending stocks so far in today’s post-Fed session:

After a logical sell-off from a knee-jerk reaction to yesterday’s “End of QE3″ announcement (see yesterday’s post), stocks traded higher and broke sharply higher on a Bull Flag pattern earlier this morning.

The result was a short-squeezed impulse toward the 2,000 index target, at which point the S&P 500 turned lower and traded into the 1,990 support confluence.

For now, we’re monitoring the neutral zone between 1,990 and 2,000 with a breakout above 2,000 setting the stage for a future rally to new all-time highs… or a move under 1,990 targeting the 1,980 or even 1,975 downside targets.

Sector Breadth (after the Fed) revealed another bullish picture:

The Defensive Sectors took the lead today with Energy – yesterday’s leader – becoming today’s laggard.

Still, we see relative strength across the board with almost all sectors reporting more than 70% of stocks positive.

We have potential bullish trend continuation plays in the following stocks:

Bristol-Myers SQUIBB (BMY), AmeriSourceBergen (ABC), MasterCard (MA), and the big-winner Visa (V).

Potential downtrending candidates exist in stocks showing relative weakness today:

Avon Products (AVP), Intel (INTC), Ball Corp (BLL), and Trip Advisor (TRIP).

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade


Afraid to Trade.com Blog

29
Oct

Fed Day End of QE3 Market Update and Stock Scan Oct 29

Oct 29, 2014: 1:15 PM CST

As expected, the Federal Reserve announced an end to its QE3 stimulus program and stocks reacted immediately with a knee-jerk sell-off lower.

Let’s update our levels and note the top trending stocks so far in today’s special session:

Continue watching price action closely in the high volatility period after today’s Federal Reserve announcement.

The key level will be the 1,975 index in the S&P 500 and a break above the 1,983 level could trigger an impulsive bull flag breakout.

Otherwise the market is a bearish play under 1,975.  The Fed Day aftermath makes today unique.

Sector Breadth (before the Fed) revealed a slightly bullish picture:

Our strongest sector today is Energy which is rebounding after a large sell-off, and Health Care with Discretionary and Technology (sectors) are the second tier leaders for the day.

Materials and Utilities so far are the weakest sectors of the session.

We have potential bullish trend continuation plays in the following stocks:

Newfield Exploration (NFX), Petsmart (PETM), Medtronic (MDT), and Occidental Petroleum (OXY).

Potential downtrending candidates exist in stocks showing relative weakness today:

Garmin (GRMN), Facebook (FB), Thermo Fisher Scientific (TMO), and Gilead Sciences (GILD).

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade


Afraid to Trade.com Blog

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