Hello traders everywhere! Adam Hewison here, co-founder of MarketClub with your mid-day market update for Monday, the 26th of September.
Here we are on the first day of the last week of September, with the end of Q3 approaching on Friday. Are the equity markets building a base to go higher? Or is this just a pause before we start heading back down?
All eyes continue to be focused on the European problem, especially Greece. We still believe Greece will default on their debt. And we still think that the politicians are looking for an easy way out of this economic malaise, unwilling to accept the consequences of their actions.
Last week we saw all the markets under pressure. For the last couple of days we've seen some minor support coming to the equity markets. And just today we have seen support come into the metals markets at much lower levels than most folks anticipated.
As always we rely on our Trade Triangle Technology which continues to point the way to profits.
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
Suggested Trading Instruments:
Non Leveraged ETF's: (Long SPY) (Short SH)
2 x Leveraged ETF's: (Long SSO)(Short SDS)
Futures: 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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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 = - 90
After last week's sharp fall, the S&P 500 index is doing a slow recovery. We do not believe this is changing the overall direction of this market, which we still believe to be bearish based on our Trade Triangle technology. Key level to watch this week is 1120. A close below this level represents a continuation to the downside for this index. The large technical flag formation that we have discussed in previous posts is still in a bearish mode. This also ignited an intermediate term Trade Triangle sell signal at 1136.07 for this index. We are looking for this market to continue on the defensive for the next several weeks. Perception is everything and investors are in a panic mode with the state of the economy and their portfolios. Short, Intermediate and Long-term traders should continue to be short this index.
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SILVER (SPOT)
Suggested Trading Instruments:
Non Leveraged ETF's: (Long SLV) (Short the ETF SLV)
Leveraged ETF's: (Long AGQ) (Short ZSL)
Futures: 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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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
The spot silver market is now lower for the year. We suspect that today's low, which mirrored the lows seen in January, is going to at least hold the market for the time being. With all of our Trade Triangles negative, it is hard to make a compelling argument that this market is headed higher. We continue to just watch this market and see how it plays out. Traders who are following our Trade Triangle technology should be short this market with appropriate stops. As we have said before in these reports, markets slide faster than they glide, meaning they go down much faster than they go up.
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GOLD (SPOT)
Suggested Trading Instruments:
Non Leveraged ETF's: (Long GLD) (Short the ETF GLD)
Leveraged ETF's:(Long UGL) (Short GLL)
Futures: Futures: 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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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
Unlike silver, the gold market is higher for the year and also has a positive Trade Triangle still intact. This basically indicates that the long term trend for gold remains positive. This market is seeing massive liquidation and profit-taking and we expect it will regroup at or around current levels. We do not anticipate this market going straight up from here. Only long-term traders should maintain long positions with the appropriate money management stops in place.
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CRUDE OIL (NOVEMBER)
Suggested Trading Instruments:
Non Leveraged ETF's: (Long USO) (Short the ETF USO)
Leveraged ETF's: (Long UCO) (Short DTO)
Futures: 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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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 = - 90
The November contract for crude oil appears to be finding support at the $78 a barrel level. While it is too early to say that this market has made a bottom, the action indicates that the momentum for the moment has stopped going down. All of our Trade Triangles remain negative, with resistance coming out just around the $81.80 level basis November. As you may recall we are tying the crude oil market with the equity markets. As the equity markets go, so does crude oil at the moment. Short, Intermediate and Long-term traders should continue to be short the crude oil market.
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DOLLAR INDEX
Suggested Trading Instruments:
Non Leveraged ETF's: (Long UUP) (Short UDN)
Leveraged ETF's: (Long) (Short)
Futures: 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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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 = + 90
Despite the pullback from higher levels seen earlier today, the dollar index continues to remain in a positive mode. With all of our Trade Triangles positive, we expect to see further upside action. We remain positive on this index. Longer-term this market looks poised to move much higher. This index is coming from a large energy field that is capable of carrying it much higher, possibly up to the 80.00 - 81-00 area. Short, Intermediate and Long-Term traders should maintain long positions with the appropriate money management stops in place.
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REUTERS/JEFFERIES CRB COMMODITY INDEX
Suggested Trading Instruments:
Non Leveraged ETF's: (Long CRBQ) (Short the ETF CRBQ)
Leveraged ETF's: (Long UCO) (Short CMD)
Futures: 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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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 = - 90
The Reuters/Jefferies CRB Commodity index came very close to testing the $300 level, with a low this morning of 300.15. This may be an interim low as this market continues to try and carve out a bottom for itself. At the moment with all of our indicators in a negative mode, we see no reason to try and pick a bottom here. We have been bearish on this index, putting aside any bias we had toward inflation. Remember the trend is your friend, and 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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Give us a call today at 877–219–1482 for a free consultation and see if personal coaching is right for you.
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This is Adam Hewison for MarketClub and I'll see you tomorrow, right here with my mid-day update. Have a great trading day.
All the best,
Adam Hewison
President, INO.com
Co-creator, MarketClub
Yes, the stock market is somewhat belatedly signaling a recession.
Major resistance has been falling quite rapidly down to the market. The 50-day MA is at 1207, down from 1220 where the last rally failed. It´s interesting that yesterday the bull ran out of gas at 1195, a line of minor resistance and today at 1184. This is an admission of defeat, especially given that this is end of a lousy quarter for stocks. So, they´re selling winners to dress up losers.
Commodities look terribly bearish as well and as for the "safe havens" of gold and silver it should be noted how unsafely they act and how fast they fall when encountering meaningful selling pressure. In fact they seem to act much like speculative stocks with a lot of traders with tight stops.
galdur: Agreed. Another big recession is pretty much inevitable. I am carrying a put spread on the Nov 16 VIX: long $40 put, short $35 put.
you will be interested in:
http://www.bloomberg.com/news/2011-09-28/vix-traders-see-rally-evaporating-with-futures-50-above-average-options.html
P.S. It´s big news when the volume of bets against the S&P 500, the cream of the crop of U.S. stocks, suddenly jumps by 10-20,000%. Yet, you don´t see anything about it in the papers or bubblevision. That should be cause for some concern IMO.
Ralph, I don´t think there´s ever been a jump in volume of this magnitude.
Haven´t checked the number as of now but wouldn´t be surprised if it´s over 3 million.
The put option volume against individual stocks is probably very high as well.
Maybe something big happens, the market tanks and there´s a gigantic transfer of wealth, maybe not. Only time will tell. But one thing is for sure, this incredible mass of puts will create lots of volatility in the market leading up to the 20th of next month.
galdur - I hear you, that's a huge increase. Institutions, banks, funds etc oft-time use puts to hedge their longs. I'm not saying that's the case. I'm just sayin'. When's the last time there was a big % increase and how did the market react?
CHANCES ARE QUITE LESS HOWEVER,IF IT WILL SO, THEN TOO, WILL BE FOR VERY SHORT SPAN AND VERY HARD TO SUSTAIN.
RASESH SHUKLA
INDIA
Every body become hopefull about europe, and still expecting some magical ending of this crisis, however, WE ARE JUST POSTPORNING TROUBLES---- UNLESS AND OTHERWISE ANY HARSH RESULT TAKEN PLACE, WOURLD WILL NOT BE EASED.
PLEASE PLEASE DONT TAKE CURRENT RECOVERY AS A "TREND CHANGE" OR A SIGN OF REVERSAL.... THIS IS SIMPLY A PULL BACK, AND WILL LAST MAXIMUM UP-TO FIRST WEEK OF OCTOBER AND THEN BEAR STORY WILL BE REPITED AGAIN.
GOLD - SILVER -COPPER -OR STOCK, WHATEVER IT MAY BE,
STILL WORST IS AHED,
RASESH SHUKLA
INDIA
Well, when you have the number of put option contracts jump from the usual monthly number of 10-20,000 to 2 million, you´d have to conclude that something big will happen in the first half of October. Most of this is bought by banks, insurance companies, hedge funds and other big players with very good connections, plenty of intelligence resources and insider information.
Add that insider buying of stocks tanked recently while the number of put contracts skyrocketed.
It's amazing how quickly the mood of the market can change. We are looking at an explosive opening on Tuesday, whether there will be followthru to the upside in the afternoon is anybody's guess. What gets me is this: the US economy is not in THAT bad a shape in the near term. The stats are OK, earnings are OK, PE multiples are great. Long term is a different matter, but traders live in the present.
I get suspicious when everybody is on the bear market train. EVERYbody thinks we're going down, down, down. Maybe so, but not with everybody on the same side of the boat - to mix a metaphor.
I am ready to go long silver, gold, oil, banks, copper - short bonds, USD. But not until I see the whites of their eyes.
Good wishes to all.
The number of October put option contracts against the S&P 500 is now up to 2 million.
My take:
Looks like a gigantic heist is being set up.
Something major happens in the first half of October prompting a market sell-off resulting in one of the biggest transfers of wealth in history.
HI Jeremy,
Thanks for your response re the links. If I use the links on the right I do indeed see the video without logging in again but then I don't get to view any of the text e.g. summary, ETF's and discussion. It would be great (and very logical) if members only had to log in once for ALL of the links.
Cheers
TRistan
Well said! And now the government has to raise taxes on the rich because they are the only ones with money who have funded the stock of multinationals to create jobs and acquire resources outside of the US. Low taxes only work if you can keep more of the money invested in your country, and leadership in Washington has failed miserably in providing an economic platform that is friendly to creating wealth instead of destroying it with cheap money for the thieves of insolvency.
The SPX index closed today at 1163 and penetrated the bottom bear flag line (around 1150), does this mean it is going to push back up to 1195 or 1220 level agaain in a few days?
Yes, it does seem that we aren't bringing our troups home from no-win wars is that we only have military goods to trade. Saving lives vs. money. Our government will not bring the troups home if it threatens the solvency of the US Treasury. Sad.
Hello,
I am a member and regular of this site. Ang generally pleased with the service - especially Adam's videos.
However, there is one thing that is beginning to grate. When I click on the link for the video above I get sent to a "Sign Up Now" page where I am told to "Enter your name and email address below now for instant access to the free trading video". What is going on Market Club? I know that many people complain about having to login 2-3 times per visit - I have always heard them but just gone on with it. However, if this is going to be a regular thing now, you need to sort it out please Market Club!
thanks
Tristan
Tristan,
As a member you have full access to all of Adam's videos from your homepage on MC. The videos are located on the right hand side of the page under Member Videos. They do not require you as a member to sign in to see them as you are already logged into the system. If you try to view the video from the blog you will have to sign in to see them. To bypass this just go to your MC homepage.
Best,
Jeremy
im in all the way
All eyes are being focused on Europe to keep the eyes off the real problems, those in the U.S. We wouldn't give a damn about Europe if we had our act together here. Never ending wars sucking the Treasury dry, our entire industrial base moved overseas by multinational corporations that have absolutely no allegiance to the US . . . hard to correct a balance of trade if you have nothing to trade. Except for military goods, yeah we provide 68% of world's total military sales. If we cut that back, and bring the troops home, then there goes have of what's left of our industrial sector and unemployment goes up another 10% (which would make it 30%).
Yeah, those damn Europeans . . .