Hello traders everywhere! Adam Hewison here, co-founder of MarketClub with your mid-day market update for Friday, the 21st of October.
-------------
As we are coming to the end of the trading week I want you to ask yourself this question: IS PERSONAL COACHING RIGHT FOR ME?
Watch my free personal invitation to you about one-on-one coaching:
------------
How to avoid Slice-O-Matic markets
One of the biggest challenges many traders face is avoiding "Slice-O-Matic" markets. What is a "Slice-O-Matic" market? Well, it's a market that lacks any real direction. We can call these markets "Slice-O-Matic" markets as they cut trader's equity into ever smaller pieces.
For the past seven days, the S&P 500 has not closed in any one direction from more than one day. This is the choppy scenario that many traders would like to avoid.
So how is that done?
One of the simplest ways that I know is to use our Trade Triangle technology. The major Trade Triangle to watch trading stocks is the monthly Trade Triangle, as this determines the trend. We use the weekly Trade Triangles for timing purposes. Let me give you an example, if the last monthly Trade Triangle is green, this indicates the major trend is up for that stock. You would then use the initial monthly Trade Triangle as an entry point and the weekly red Trade Triangle as an exit point. You would only reenter a long position if and when a green weekly Trade Triangle reappeared, providing the monthly green Triangle is still in place. You would again use the next weekly red Trade Triangle as an exit point.
The reverse is true if a red monthly Trade Triangle shows that the trend is down. You would then use the weekly green Trade Triangles for covering short positions and the weekly red Trade Triangles for reentering short positions.
When you have two opposing Trade Triangles, like the red monthly Triangle and green weekly Triangle in the S&P 500, it indicates that you should be on the sidelines and in cash. You would be amazed at just how well this simple formula works in the stock market.
So there you have it, a simple, easy way to protect your equity and avoid Slice-O-Matic markets.
Now, let's go to the 6 major markets we track every day and see how we can create and maintain your wealth in 2011.
-------------
S&P 500 INDEX
-------------
The market action in the S&P 500 index continues to be very choppy and we expect that to continue in the near term. The long-term monthly Trade Triangle is negative on this market and yesterday's action did not alter that. With a Chart Analysis Score of + 70, we are stuck in a trading range waiting for some news to shake us out of the doldrums. Intermediate traders should be on the sidelines waiting for a new Trade Triangle signal. Long-term traders should either be in cash or continue to hold short positions in this index.
See today's S&P 500 Video Here.
-------------
Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = + 70
-------------
Suggested S&P 500 Trading Instruments:
Non Leveraged ETF's: (Long SPY) (Short SH)
2 x Leveraged ETF's: (Long SSO)(Short SDS)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity is some ETFs is very thin. Contact your broker for more information.
-------------
WIN A FREE 1 YR SUBSCRIPTION TO MARKETCLUB ON A HP WiFi TABLET
-------------
SILVER (SPOT)
-------------
Our Triangles are all negative, indicating further weakness and we expect to see this market on the defensive. We believe that the markets are looking at silver as an industrial metal and if we are correct on the longer-term trend in the world equity markets, then silver should fall to around $20 an ounce. Our Chart Analysis Score moved to - 100, indicating a strong downtrend and a move to the downside. Intermediate and Long-term traders should continue to hold short positions in silver with appropriate stops.
See today's Silver Video Here.
-------------
Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trend = Negative
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = - 100
-------------
Suggested SILVER Trading Instruments:
Non Leveraged ETF's: (Long SLV) (Short the ETF SLV)
Leveraged ETF's: (Long AGQ) (Short ZSL)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity is some ETFs is very thin. Contact your broker for more information.
-------------
HERE'S THE FASTEST, EASIEST WAY FOR YOU TO IMPROVE YOUR TRADING
I would like you to ask yourself this question, AM I Ready FOR A PERSONAL COACH?
Give us a call today at 877–219–1482 for a free consultation and see if personal coaching is right for you.
LEARN MORE HERE: http://www.marketclubcoaching.com/now/
-------------
GOLD (SPOT)
-------------
Our Chart Analysis Score has moved to +55 indicating a trading range for this precious metal in the near-term. Longer-term, our monthly Trade Triangle and our intermediate term weekly Trade Triangle remain in a positive mode. I think most traders would be better off just watching from the sidelines. Only long-term traders should maintain long positions with the appropriate money management stops in place.
See today's Gold Video Here.
-------------
Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = + 55
-------------
Suggested GOLD Trading Instruments:
Non Leveraged ETF's: (Long GLD) (Short the ETF GLD)
Leveraged ETF's:(Long UGL) (Short GLL)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity is some ETFs is very thin. Contact your broker for more information.
-------------
CRUDE OIL (DECEMBER)
-------------
The crude oil market continues to mirror the action in the equity markets. The highs seen on Wednesday in the December contract at $89.69 a barrel remains to be taken out if this market is going to move higher. With mixed Trade Triangles and a Chart Analysis Score of +55, there is no clear cut direction for this market at the moment. Crude oil is very overbought on the Williams % R indicator. We would not rule out a pullback to the $80 a barrel level, which would represent a 61.8% Fibonacci retracement. Our long-term Trade Triangle continues to be negative and we expect it will once again dictate the tone of this market. Intermediate term traders should be on the sidelines and long-term traders should continue to be short the crude oil market.
See today's Crude Oil Video Here.
-------------
Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = + 55
-------------
Suggested Trading Instruments:
Non Leveraged ETF's: (Long USO) (Short the ETF USO)
Leveraged ETF's: (Long UCO) (Short DTO)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity is some ETFs is very thin. Contact your broker for more information.
-------------
WIN A FREE 1 YR SUBSCRIPTION TO MARKETCLUB ON A WiFi TABLET
-------------
DOLLAR INDEX
-------------
The dollar index moved to its lowest levels since July 21st and pushed our Chart Analysis Score into a -70 reading. While our longer-term monthly Trade Triangle remains positive, our intermediate term weekly Trade Triangle is indicating weakness. At the moment all intermediate and short term traders should be on the sidelines. Long-Term traders should maintain long positions with the appropriate stops in place.
See today's Dollar Index Video Here.
-------------
Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = - 70
-------------
Suggested DOLLAR INDEX Trading Instruments:
Non Leveraged ETF's: (Long UUP) (Short UDN)
Leveraged ETF's: (Long) (Short)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity is some ETFs is very thin. Contact your broker for more information.
-------------
REUTERS/JEFFERIES CRB COMMODITY INDEX
-------------
The pullback that we were looking for in this index to the 305 area was completed yesterday and we expect we will see more two way trading with today's +55 Chart Analysis Score. Technically our long-term Trade Triangle remains negative and we expect to see this market once again resume its downward trend. Intermediate term traders should be on the sidelines. Long-Term traders should maintain short positions with the appropriate money management stops in place.
See today's REUTERS/JEFFERIES CRB COMMODITY INDEX Video Here.
---------------
Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = + 55
---------------
Suggested REUTERS/JEFFERIES CRB COMMODITY INDEX Trading Instruments:
Non Leveraged ETF's: (Long CRBQ) (Short the ETF CRBQ)
Leveraged ETF's: (Long) (Short CMD)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity is some ETFs is very thin. Contact your broker for more information.
---------------
As always, we rely on our market proven Trade Triangle technology for catching the big moves.
---------------
As we are coming to the end of this trading week I would like you to ask yourself this question. CAN PERSONAL COACHING HELP MY TRADING?
Call us today. The call is FREE, and the consultation is FREE. See if personal coaching is right for you. The number to call right now is 877–219–1482.
--------------
This is Adam Hewison for MarketClub and I'll see you this weekend, right here with my weekend wrap. Have a great trading day.
All the best,
Adam Hewison
President, INO.com
Co-creator, MarketClub
P.S. Don't forget to enter for a free 1 year subscription to MarketClub on a HP WiFi Tablet.
Hi Adam, it would seem the negative monthly triangle on the S&P is hanging on by a thread. Are you now able to advise at what level the monthly indicator would flip to positive?
With thanks,
Mike
You are supposed to go short when the algorithm kicks out a monthly red triangle. "Monthly for trend, weekly for timing." In other words, we all shuda been out from a green weekly triangle on Oct 12, safely on the sidelines, waiting for a weekly red triangle. The move from Oct 3 (153 points on the DOW)is pretty impressive bull action.
Adam is one smart cookie who has made millions trading the market. If he says long-term players should hold their shorts, they will. It just seems counterintuitive. Nobody is right all the time and even the sharpest traders, and the most reliable algorithms, have to take losses now and then. But right now, Adam seems to be advising AGAINST his own algorithm.
Adam, please give us your reasoning for holding short stock positions against a green weekly triangle on Oct 12 and now a green daily triangle at 11652 on Friday? Isn't +70 a pretty strong reading?
Thank you.
I like the "negative " in red and "positive" in green. Keep it up!
It seems many readers are concerned about the lack of responsiveness of the daily triangles. I think they work well in trending markets, but in volatile markets, they likely are contradictory to the weekly at times. I don't know, but I suspect some would suggest this is a signal to be in cash.
I've found a way to be more responsive... because I share some of those frustrations. Any guesses where the markets will end up next week? Europe is such a catalyst.
You made a short call of the S & P 500 for the last several weeks. Especially when the SDS peaked out @ 28.15 last week. Since then we've lost 25% because of your completely off base, wrong side of the market call. I was a subscriber and lost a great amount of money due to your inept trade triangle technology which clearly does not work. It's too slow.
@ Kumar,
Is that a joke why it is the monthly slow to respond? Well it takes at least 28 days (Feb) for the monthly data to be created. Why are you short and hold? Buy n hold is dead yes, but to go short and hold is just suicide. Hope you don't own any 3x short ETFs. The beta slippage alone will make your stomach ill. Mkts take at least 3x as long to go up and gains can be lost in a matter of days/ weeks.... but look at any correction. Fast n Furious unless you thought this was a start of 2008 all over again....then some sort of stop should have been in place to prevent a catastrophic loss. When the daily and weekly triangles are the same you go that direction long or short. KISS. Use some sort of stop while you are at it. Don't be short as a long term investor... another oxymoron. I love it!!! If you truly are a long term investor then the weekly and monthly triangles have to be in agreement. If not like the SP now Monthly down and Weekly up… you are on the sidelines or trade option strategies since the volatility is so great now. It is a traders paradise with and SP range of 300 points (1080-1370). As soon as the weekly triangle went green you should have closed your short position... but that lag is too great. Why not trade a small position short with the daily and weekly triangles and go long with your other capital when the weekly and monthly are green? Go to cash with long term position when they are sideways (55-65) and not trending upward +70 to +100. I am only talking trash since I was short using TZA for 4 months..... from Sept 2010. So I learned the hard way!! The person on the other end my TZA (TNA I suppose) made a killing off of my stupidity, lack of a game plan and no risk mgt. GL2U.
Adam,
Missed the move from 1100 to 1238. Why is the monthly triangle so slow to respond? Getting killed being short as a long term investor!
Kumar
Should be no resistance on the way to 1260. This momentum may even push it to 1300.
If the weekend is quiet a flood of buyers will come in on monday.