Thursday, Nov 1, 2007

So the Fed cut rates by 25 basis points today - time will tell if this will boost our economy - still more news due out this week:

Jobless Claims and Personal Income will be released 7:30 am followed by ISM Manufacturing Index at 9am (these time are Central) - these reports plus Unemployment Friday will keep the markets moving and give us a look at how the markets will trend for the last two months of the year.

Market Profile Training Tomorrow in the Inside Edge Room at 3:30 pm Central - I'll go over everything from using the Profile to how I come up with my pivot levels - don't miss it -

http://www.trademaven.omnovia.com/tmaven
password: trademaven

Pivot Levels and Support and Resistance for Nov 01, 2007:

For Wednesday - FOMC Announcement Day

Who doesn't know the FOMC will be announcing a rate cut tomorrow? The big question is how much? 25 or 50 basis points?

Consumer confidence is low (is there an echo in this blog?) The interest rate cuts are designed to boost the economy, but that boost is already in the eMini S&P and Russell 2000 Futures.

An announcement of a 1/4 pt cut will deflate the index futures - the wild card is the 1/2 pt cut, a long shot but will likely cause rallies- SO... trade the range until the call comes in at 1:15 - looking to short on the news.

The blog now has a link on the TradeMaven Website - http://www.trademaven.com/ -

TradeMaven Market Profile Training on Thursday at 3:30 pm Central - join me in the TradeMaven Inside Edge Room - http://trademaven.omnovia.com/tmaven.
The password will be "trademaven".

Happy Halloween!

Pivot Support and Resistance Levels
for Wednesday, October 31st:

For Tuesday, Oct 30

Consumer Confidence is due out tomorrow morning at 9:00 am Central - it is unlikely to produce a significant effect on the eMini S&P the day before the Fed Announces the results of its meeting.

"BUY the rumor, sell the fact" - my typo from yesterday did not get by my readers. (I put them in there to see if you're paying attention)

It would be very difficult to trade the news on Wednesday. The markets should be range bound until then - great trading for the Stochastic & MACD traders out there. Just make sure you are FLAT before the Fed Announcement at 1:15 on Wed.

Pivot numbers didn't change much, which means they are holding. - let me know if there are questions - JK

Pivot/Support/Resistance for Tuesday, OCT 30:

The Inside Edge for Tuesday, Oct 30

From Charlie:

Monday’s market as we surmised was range bound w/support at 113-04/08 and resistance at 113-24/28 both holding. Wednesday’s FOMC meeting should continue to hold the market in a range as large institutions are sidelined until the Fed speaks. The futures markets are saying the Fed will cut rates ¼ of a point on Wednesday. This is built into bond prices. We see today as another range bound day w/a seller above 113-28 and a buyer below 113-12. Today’s news Consumer Confidence is expected at 100 and should not be a factor. Trade the range today.


F1 Comments: Market is in a bracket until the Fed speaks Wednesday. The market’s bias is sideways through Wednesday‘s FOMC announcement.



F2 Comments: Market found strong buying below 13-10 leaving a 6 tick tail. 5-6 tick tails are hard to take out w/out new news. Buyers were present through the rest of the session and the market closed strong. Consumer Confidence is expected at 100 and should only cause a minor reaction. Think the market is in a bracket until the Fed’s rate announcement.


F4 Comments: Analysis was to trade the range. OK to sell 113-11/15 and buy 113-05/09. Multiple signals throughout the session.

Monday, October 29, 2007

As the market comments from Charlie (see below) point out, the markets are clearly expecting the Fed to cut interest rates during the FOMC meeting on Tuesday - Announcment on Wednesday. This is a text book case of "buy the rumor, sell the fact."

Consumer Confidence - Tuesday
FOMC Announcement - Wednesday
and Unemployment Friday - all this week -

Get ready - we are in for a great ride.

Support and Resistance For Monday:

Inside Edge Research from Charles Cochran

Market didn’t break out, nor break. The impact of the emini S&P Futures pushed the Bond between support and resistance, three times as the market filled in volume between 113-06 and 113-30. The saddle formation contained the Bond as it usually does when there is no new news. The focus remains economic activity news and the ES’s reaction to that news. Likely to be the same next week. FOMC interest rate decision on 10-31-07. The futures markets are saying there is a 100% probability of a ¼ point cut. We will see. Credit problems continue and rate relief is the fastest way to offer relief. This news is built into today’s prices. An interest rate cut combined w/disappointing economic news could take the Bond to 114-28/115-00 quickly. Still see the Bond higher and the ES lower over time.


F1 Comments: Market still trading in a range. ES is market’s focus and whipping Bond around. As long as volume continues build above 113-06. Long term bias remains higher.

F2 Comments: Market traded between the High Volume (HV) nodes at 113-06 and 113-30 in a slow, Low Volume (LV) day. The session ended in a “b” pattern. The market is pointed lower, if the emini S&P continues this afternoon’s rally. The Fed will speak this week on interest rates. If they cut rates, it is supportive for equities and financials. No news on Monday. If the ES is lower, we want to buy the bond. If he ES is higher, we want to sell the Bond. Sell zone is 113-15/19. Buy zone is 113-05/09 w/a back up buy at 112-29/113-01. Today’s market might be the best day for trading until the Fed speaks.


F4 Comments: Analysis was to trade the market from both sides. Market ran its range 3 times. Multiple buys and sells.

From Charles

Bond Market did trade up/hold its recent gains as per the analysis. The intraday trading was whipped around by the ES, which becomes the market’s focus after the news hits the wires. Once again the news was a disappointment for those looking for economic growth. I expect the economic growth news to continue to come in below expectations as it does when an economy is contracting. Not much in the way of new news on tap today w/revised Michigan Sentiment forecast at 82.5. Should have negligible impact. Down to OVN earnings and their impact on the ES. If the ES is higher, the Bond should sell, but probably won’t break. Want to buy into early weakness and see if 114-05 can be taken out. If it holds, would expect the market to fill in volume between 113-15 and 113-30. Will be trading w/one eye on the ES.

C. Cochran

For Friday, Oct 26th

Consumer Sentiment will be released Friday morning.

Consumers are wary these days, and although Halo 3 may have bumped up Microsoft's earnings for Q3, Ford and the UAW just agreed that a reduction in the workforce is needed. Consumers aren't buying houses right now and the demand for used autos is at a peak low (confirmed by a special TM client - a shout out to you GG.)

Like I wrote the other day, I'll pay $500 for an iPhone or an Xbox 360 - but I am not making any bigger purchases. A lot of volatility out there, great for trading, still looking for the emini S&P futures to trade lower.

The Consumer Confidence Report (different than Consumer Sentiment above) is coming out Tuesday followed by the FOMC Meeting later that day - amazing how the two coincide.

BIG trading days coming - lets Take the Trade.



Pivot Levels for Friday, Oct 26th:

For Thursday, Oct 25th

The volatility of this market is great for day traders. Im still on the short side of the trade due to the markets overreaction to news and the fact than new home sales coming out tomorrow is almost guaranteed to echo the current housing slump.

Jobless claims (also due out Thursday Morning) and Consumer Sentiment on Friday are also likely to have a impact to the downside.

TradeMaven has released version 4.1.6 - upgrade at www.tmdownloads.com

Pivot Levels For Thursday, Oct 25th

For Wednesday, Oct 24, 2007

"I think the trend for the market is down unless investors see something positive, and the market drifts back up again," said a Chicago economist and analyst this afternoon. What Garbage!

No one needs me to say, "The market may go down folks, but if it doesn't then this is going to be a buyers market." - Let me be more decisive -

Market gains on Monday CLOSED out significantly more positions in the emini S&Ps, today's gain is more of the same. Housing is a huge indicator of the sentiment of the nation - people might be willing to grab a new iPhone for $500 (sending tech stocks up), but they are not willing to let go of serious cash. We have only seen the first wave of the nationwide credit issues and an 8 month supply of housing. Existing Home Sales Report due out Wednesday @ 10 am ET. - I'm still on the short side.

However, Both Sides can be played - look for slowed volume as a confirmation to take the trade as the market approaches the support/resistance. - If you have a question please post a comment. - JK

Pivot Levels For Wednesday:

For Tuesday, Oct 23rd, 2007

"Though the major U.S. stock indexes showed signs of strength Monday, there are still big worries on Wall Street about how problems in the financial markets might drag on corporate and economic growth" - reported by the Associated Press Monday afternoon.

"worries" on Wall Street new plus Existing and New Homes Sales Reports out this week keep me looking to sell against resistance in the emini S&P. At the very least, they should hold the first time the market hits them.

Support and Resistance for Tuesday, Oct 23rd:

For Monday, Oct 22, 2007

It is doubtful that we'll start to see a turn around from this bear move last week. Major Reports due out this week are Existing Home Sales (Wed), New Home Sales (Thurs), and Consumer Sentiment (Fri).

The housing market is unlikely to pick-up before the spring, and consumers are likely to be sheepish with gas prices rising and the equity markets tanking.

But who called it? I did. I got a hearty congrats Friday when my boss said, "even a blind squirrell finds a acorn once in a while." - Still on the SHORT side. - Buying breaks in the bonds sounds like a good trade to me. - JK

Support and Resistance Numbers for Monday, Oct 22, 2007:

The Charts Explained

One of the most common questions from the room is, "what are the different charts, and what do they show?"

There are four screens available for use. These four are the ones we have settled upon as the software was developed and tested over the last five months. The four screen layout shows how we sequence the flow of internal market information down to the execution of the trade:

F1 Screen

The first screen, F1, is a monthly market profile screen and the data can be split and saved by the user. The long term distribution on the right of the screen holds up to two year's worth of data, which is usually more than enough to capture the long term trend and market’s most recent move. This long term distribution can also be colored to show the number of contracts traded per transaction allowing one to differentiate between small speculators and large institutional traders (can show three different lot sizes in each price/volume bar). The monthly timeframe was chosen to make sure the trader was aware of where the market was, has been and is pointing at a quick glance. Now you can easily integrate the day and week into the very long term and know whether you are early or late in a move and adjust your strategy accordingly.

F2 Screen

The second screen, F2, is the standard 30 minute market profile that allows user splits that can be permanently saved to speed the analysis/setup process. The distribution on the right of the screen is the long term distribution with up to two year's worth of data. This long term distribution can be colored to show the number of contracts traded per transaction allowing one to differentiate between small speculators and large institutions (can show three different lot sizes in each volume bar). The long term distribution can show actual contract volume or number of trades at a price or price changes (when contract volume isn't available) to accurately depict the distribution for the periods selected. The volume can be shown at the side of the distributions or superimposed over the distributions. We prefer the superimposed feature, because you can get more history on the screens, which helps one maintain the proper perspective.

F3 Screen

The third screen, F3, is a colorized 30 minute bar chart with volume attached. Red and blue show the prices outside of the value area. Yellow represents the value area. Green is the mean of the volume and magenta is the actual high volume number of the period, when different from the mean. The distribution on the right hand of the screen is the volume distribution for the entire day with the same color scheme as the individual bars. This shows the most recent activity and closest relevant price points, where one should expect opposite activity or a pause. This screen keeps you closest to the market profile information that drives the activity of the traditional market profile user.

The fourth screen, F4 (below), is a 5 minute "equi-volume" chart that shows the volume in that individual bar on the x-axis and price on the y-axis. The chart reveals a bar's volume relative to the volume of the other bars on the screen; the wider the bar the more the volume in that bar. The bar is further coded in the same manner as the F3 chart. The chart includes a long term distribution on the right side of the screen to help track the high and low volume numbers affecting the trade. At the bottom of the chart is a bar histogram that tracks the cumulative buying and selling for the day allowing one to monitor the cumulative buy and sell pressure in the market. The greater this number the harder it is to reverse a trend.

F4 Screen

In F3 and F4 we have developed a library of proprietary studies for potential trade recognition (location). These indicators capture the trade setup, the phenomena that trigger a trade and the entry. The four indicators show the following:

1. The letters B and S letters show market trends.

2. The black up and down arrows isolate and show each rotational high or low for one's defined timeframe. This emphasizes rotational highs and lows that are the market's edges so the trader doesn't miss them. Furthermore, it greatly speeds up the analysis and study of history in the data base.

3. The pink/blue squares show potential turning points or edges in the market by measuring the acceleration and deceleration in market activity over the number of price increments selected; the shorter the timeframe the fewer the price increments.

4. The green circle shows when the market is retesting a previous rotational high or low within as many ticks as the user has selected to accommodate a particular market’s personality and timeframe.

Each of these studies can be adjusted to fit the user's timeframe and trade sensitivity, thereby increasing or decreasing the number of trades to be considered. The proprietary studies are real time, allowing you to take a trade in the signal bar, or after the bar closes like all other technical studies. This real time feature improves trade location over time and is usually the only way to get within a tick of the actual high or low of a rotation. These studies are not mathematical as most technical analysis studies are, but measure raw data, or what is actually happening in the market.

Our software allows integration of multiple timeframes and studies that bring a trader to the buy, sell or flat decision.

Let me know if you have any questions.

For Friday, Oct 19th

News services are still throwing around the term "uneasiness" when describing the equity markets. This does notbode well for those, like me, who love the bullish markets.

CNN continues to spread the rumor of the Fed cutting interest rates, but the next FOMC meeting isn't scheduled till the 30th. So, till then watch for for falling rocks. Day Trading requires flexibility.


Tomorrow (Friday, Oct 19) we are having an open session in the TradeMaven Inside Edge Research Room.

Join me in the TradeMaven’s Inside Edge Room tomorrow at 8am ET (7am Central)
www.trademaven.omnovia.com/tmaven, the password is “crystal”


Support and Resistance numbers for Friday, Oct 19th:

For Thursday, October 18th

Gotta Love the Volatility in the eMini's Market!

Reports Due out Tomorrow, 18 Oct:
Jobless Claims – 8:30 ET/ 7:30 Central
Leading Economic Indicators – 10:00am ET/ 9:00 Central
Philly FED Survey – 12:00pm ET/ 11:00 am Central

I was really surprised to see the eMini S&P’s (Russell 2000, etc.) rally so far in the afternoon. Positive corporate earnings may have caused the rallies, but general worries about the economy as well as rumors of the Fed continuing to slash interest rates have me still looking to the short side in the morning.

I still don’t think we’ve hit bottom yet – Are we having FUN YET?

Thursday (Oct. 18th) we are having an afternoon recap of the TradeMaven Inside Edge Methodology; a comprehensive trader’s education forum focused on e-Mini S&Ps and U.S. Treasury Bond Futures. TradeMaven’s Inside Edge features all of the necessary analytics and execution information in one place to speed up your decision process, keep you on the right side of the market, and eliminate so much of the noise that surrounds trading today.

Join me in the TradeMaven’s Inside Edge Room Thursday, Oct 18th at 4:30 ET (3:30 Central)
www.trademaven.omnovia.com/tmaven, the password is “profile”

Day-Trading Support/Resistance for Thursday Oct 18th:

For October 17

Today after the close I will be giving a Market Profile class – be sure to join me; it’s FREE and I am certain you will gain a better understanding value in the markets and maybe we’ll have some FUN while we're at it.

Join me in the TradeMaven’s Inside Edge Room today at 4:30 ET (3:30 Central) for this Market Profile Seminar!
www.trademaven.omnovia.com/tmaven, the password is “profile”

Essential Report Due out Wednesday – CPI = Consumer Price Index at 8:30 ET / 7:30 Central. Additionally, the Housing Starts Report is due out at the same time. I really can’t see these reports turning the market around. Still looking for the SHORT side of the trade.

The bottom line is that we haven’t hit bottom yet. The key will be a market close below 1544 in the S&P’s

Day-Trading Support/Resistance for Wednesday:

For October 16

Today is the last day of the Free Trial Week of TradeMaven’s Inside Edge. Join us at 8:00 am ET for opening comments.

www.trademaven.omnovia.com/tmaven, the password is 'sellers'.

With the housing market and “subprime” mortgage situation as it is, (not to mention $86 Crude) it looks like my bullish run in the e-Minis died a painful death.

The bright side is there are points to be made on the down side – or look into the Bond Futures – see link to Research Room above.

Bear Trends = SELL RALLIES. When the market comes back to S1 after going midway down to S2 – SELL, SELL, SELL!

“What are they doing? They’re selling, Mortimer!” – (BTW if you haven’t seen Trading Places yet, you need to go back to trading baseball cards.)

The trend is your friend, but resist the temptation to sell the lows - be patient and wait for a pullback to hit low volume areas (hint: those are the S/R points).

Please Keep in Mind:

CPI is due out on Wednesday

Day-Trading Support/Resistance for Tuesday:

Welcome!