Hello traders everywhere! Adam Hewison here, co-founder of MarketClub with your mid-day market update for Monday, the 3rd of October.
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Many investors are saying, "thank goodness that the month of September is over!" Do you share that sentiment?
Welcome to Q4 and the first trading day in the month of October. It is the "trick or treat" month, as we celebrate Halloween at the end of the month. Is October going to provide a treat for investors? Or will it sucker them in and trick the market down to new lows?
As stated before, the problems in Greece are very real and are not going be solved to anyone's satisfaction. So what happens when a country defaults on its sovereign debt? No one knows what the answer will be to that question. The market however, will figure it out and deliver the answers that smart investors are looking for.
The month of September was brutal for most buy and hold investors, and that is why we advocate being nimble in these amazing economic times.
Now let's go to the 6 major markets we track and update every trading day and see how we can create and maintain your wealth in 2011.
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S&P 500 INDEX
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Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = - 100
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The 1120 area continues to provide support for the S&P 500. This is the last vestige of hope for the Bulls. If this level were to give way, I think we will see this market move down to our ultimate target zone which is the 1000 to 950 area. As always, we are going to rely on Trade Triangle technology to guide us on the path to profits. We feel that we are going to see a resumption of the downward trend in this index. At the moment this index is trapped in a broad trading range bounded by 1120 on the downside and 1220 on the upside. We are looking for this market to break down and be on the defensive for the next several weeks. Intermediate and Long-term traders should continue to be short this index.
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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.
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SILVER (SPOT)
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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 = - 90
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Not much has changed in this market, as it continues to be trapped in a fairly narrow trading range. When we see situations like this we tend to want to lean on our Trade Triangle technology to help us decipher the next swing. Presently it would appear the next swing is going to be on the downside, as all of our Trade Triangles are in a negative mode. How low can silver go? I think we have to look back at major support which is around the $20 an ounce level. Silver could drop another 30% from current levels. Having said that, we will rely on Trade Triangle technology to keep us on the right side of the trends. Traders who are following our Trade Triangle Technology should be short this market with appropriate stops.
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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.
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GOLD (SPOT)
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Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = + 55
The gold market has now moved two Triangles to the green column, which is a potential sign it may be ready to move back to the upside and retrace some of the losses that were seen in September.
A Chart Analysis Score for gold of + 55 indicates a near-term trading range. This range is pretty broad with support coming in at $1550 on the downside and resistance at $1675 on the upside. I think most traders would be better off watching from the sidelines, as the volatility continues to contract. Only long-term traders should maintain long positions with the appropriate money management stops in place.
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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.
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CRUDE OIL (NOVEMBER)
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Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = - 90
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Crude oil started off the day under a great deal of pressure trading below the 77 level before rallying. This market continues to be wrapped around the equity markets in such a way as to reflect their swings both up and down. Intermediate and Long-term traders should continue to be short the crude oil market.
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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.
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DOLLAR INDEX
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Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = + 100
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The dollar index continues to climb up towards our target zones of 80.00 and 81.00. Today's action was very reflective of what is going on in the global currency markets. We continue to be friendly to this market and want to hold positions with money management stops. This index is coming from a large energy field that is capable of carrying it much higher. Intermediate and Long-Term traders should maintain long positions with the appropriate money management stops in place.
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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.
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REUTERS/JEFFERIES CRB COMMODITY INDEX
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Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = - 100
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The REUTERS/JEFFERIES CRB COMMODITY INDEX has now completed the 61.8% Fibonacci retracement that we have been suggesting. We expect the downward pressure in this market is coming to an end, and we may see a reflex rally from current levels. The Fibonacci measurement came from the highs that were seen around April 29th and the lows that came in around August 25th of 2010. We expect the trend to continue until our Trade Triangles inform us that the trend has changed. Short, Intermediate and Long-Term traders should maintain short positions with the appropriate money management stops in place.
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Suggested REUTERS/JEFFERIES CRB COMMODITY INDEX Trading Instruments:
Non Leveraged ETF's: (Long CRBQ) (Short the ETF CRBQ)
Leveraged ETF's: (Long UCO) (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.
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This is Adam Hewison for MarketClub and I'll see you tomorrow, right here with my mid-day market update. Don't forget to enter for a free 1 year subscription to MarketClub on a HP WiFi Tablet!
All the best,
Adam Hewison
President, INO.com
Co-creator, MarketClub
Greece is a midget but perhaps a convenient excuse to sell overpriced assets.
The dollar continues importing deflation into the U.S. economy. This is a very important correction in that 1) it recognizes that economic input costs into the import-dependent U.S. economy must be taken down
and (2
the debt bubble maintaining impossible prices of things in absolute overabundance is bursting.
The very big news is that conventional economic theory of scarcity is finally giving up its ghost in the face of massive and rising tsunamis of technological advances, incredible oversupply of everything and totally endless supply of dirt cheap labor. As a result the price of money being hoarded in anticipation of falling prices is at a 100-year high.
Hi Adam, from a very happy Market Club member in the UK, now in my second year and now really starting to feel that your daily and weekly videos are making the difference to my understanding of the main market sentiment changes in conjunction with the trade triangles - has definitely given me the confidence to trade with better knowledge and to recover my earlier losses, so now looking forward to putting my trade account into positive territory. However, I would appreciate your thoughts on conflicting thoughts that crude oil may hit $70/barrel if the S&P hits $950, but with the impression that the CRB Index is bottoming out and is ready for a turn, when the CRB is as you indicate is so heavily influenced by crude oil movements?? - surely the CRB can only move upwards if the S&P and crude oil reverse their downward trends? Best regards for a great service.
Adam, thanks for the updates on the six market indexes, nice to see you provide extra detail with the etf shorts/longs.! It appears that we may have some more correction coming on the markets.
Pedro
Adam,
The S&P fell through the "congestion area" bottom at 1120 today.... My believe is that the equity markets are going to accelerate to the downside pushed by the rush to the dollar as the likely hood of Greece being the next to default begins to be more real...
What ever happened to the prospects of natural gas?