S&P 500 Update Part II

As per the post before last (Dec 8th) we are holding a sizeable short position. We came close to being stopped out, however, the flat top saved our bacon. It really does look like resistance is in place. Let's see where we go from here.....

Happy trading traders!

Where next? Robert Prechter of Elliott Wave on Bloomberg / Oscar of Live with Oscar

Two very contrasting opinions from two well respected technical analysts. Ah, the subjectivity of TA....

S&P500 Update

To be clear, we are still short the S&P500 and inttend to remain short for the weeks leading up to Christmas. The market failed at the descending resistance, highlighted on our post on 1st December and short-term indicators are now pointing lower. Both of which underline the quality of the thinking behind this trade.

I received a mail from a flatbook reader recently asking for proof that we take our trades. In response to said reader's email, please see below, a screenshot belonging to a key flatbook contributor. She currently holds one position: an S&P500 short on the back of our call on 1st December.

Wishing you all well this festive period!

Critical juncture for S&P500?

After another brief hiatus, here at the flatbook we are back. Posting for posting's sake is not in our nature and it was our feeling that over the course of November, market conditions yielded very few high probability setups.

Thanksgiving week saw an increase in volatility on light volume as was to be expected. As panic on the back of an allegedly exaggerated Dubai World crisis fades to black, we enter a week headlined by the ECB rate decision on Thursday and US NFP data on Friday, both of which have the potential to founder market gains. Technically we find ourself ensconced on tested descending resistance (see below). Notwithstanding indicators appearing decidedly indecisive, we have executed a sizeable, yet somewheat speculative short position at 1106 with stops above recent highs. Let the flatbook go on the record and say that we expect a healthy pullback into the Christmas period as traders unwind their books and take some chips off the table. Indeed this is a critical juncture for global markets, and our direction over the next couple of weeks may provide insight as to whether we are in a genuine bull market or a bear market rally.

Safe Trading all!

Long S&P500 @ 1043.5

Although we have profited substantially from shorts at 1101 earlier this week, let us not forget our mandate: buy dips! Since March lows of 666 we have consistently made higher highs and higher lows. Today, ahead of 3Q US GDP, the S&P500 is testing ascending support that has been in play since those market lows. Is this reason sufficient for us to effect a long position? In and of itself, no. Consider this however: The EUR/USD, often considered a mirror of global indice health, is also at a key level of support. The stochastics on both charts seem to bottoming out and RSIs both look to turning higher. On this basis, we have executed a sizeable long position at 1043.5 on the S&P500 with a moderate stop loss to compensate for the inevitable noise around the US GDP data. Please note, we would not normally effect a position ahead of such a key figure, howerver, the statistical and technical evidence in favour of our doing so is overwhelming.

Safe trading all!

S&P 500 support at 1054.5?

Here at the flatbook we will action a long position (in line with our 'buy dips' mandate) at 1054.5 with moderately sized stops - 50 pips. We anticipate a bounce from this level due to the considerable support as illustrated on the d1 chart below.

Safe trading all!

Short-term S&P500 support

Our target for our short position today of 1090.0, as illustrated below, was hit triggering our limit orders. We are considering effecting a speculative long position at the ascending support (1088).

Safe trading all!

Are we at critical point for S&P 500?

After several months of upside momentum are we now at a critical juncture in the Bulls vs Bears battle? Well, here at the flatbook we certainly think so. Take a peak at the charts below. Here we see price action encroaching upon previously tested, descending resistance. That we see this resistance coming into play almost simultaneously, on more than one global market index gives this setup additional credence. The stochastic on all three charts is also looking very 'toppy'. We will effect a short position on the S&P500 at no lower than 1001 (as this is where the chart meets our resistance), with tight stop losses.
Worthy of note, is that this trade is extremely counter trend. With better than expected results popping up left, right and centre, of which Apple is the most recent (profits up 47%) the mandate for profitable trading over the weeks/months past, has been to buy dips. The technicals pertaining to our short position however, are too extensive for us to not take the trade. We are techincal analysts afterall and not fundamental analysts.

Safe trading all!

Trade Updates

Ahead of what is anticipated to be a fairly light trading day, let's reflect on a most profitable couple of trading days:

Long SPX @ 880; actioned Wednesday 19th August 0844
We find ourselves once again in a great position thanks to sound technical analysis. Here at the flatbook, we have taken some profits of the table but will leave 1/4 of our original trade size in play (with stop at break even) so as to take advantage of any further potential upside. 1017 is not beyond the realms of possibility over the next few trading days.


Long GBP/USD @ 1.390; actioned Wednesday 19th August 0942
We have taken this position off in its entirety @ 1.6550. Though aware of resistance on our h1 charts at 1.6600 we were optimistic that cable could push through this level and doing so missed out on further 50 points. Still, we keep the p&l ticking over. Moral of the story: always respect your TA!


Short US Crude Oct '09 @ 72.77; actioned Wednesday 19th August 1542
Stopped out of this one for break even. It was very much in profit at one point. We didn't take the position off however as our technical analysis indicated a prolonged movement to the downside could ensue over the next few trading days. Such is life, eh?

Happy trading all!

Trade Update: US Crude Oct '09 short @ 72.77

Again, we are shorting recent highs on the back of volatility cause by today's surprise EIA (Energy Information Administration) Oil Inventories data:

+1.1mln forecast vs -8.4mln actual

Our entry is 72.77 and we will move our stop loss (40points initially) to break even at the earliest opportunity. Please see the chart below:

Trade Update: Long GBP/USD 1.390

On the back of the release of the MPC minutes we've seen an increase in volatility in cable. We have actioned a long position at 1.390 with a 40point stoploss. We will move s/l to break even as the instrument moves to the upside. See the h1 and m10 charts below for our thinking behind the trade:






Safe trading all!

Trade Update: Long spx @ 880

On the news front today, we have only the MPC minutes to contend with/profit from.
Technically, however, we see 880 as a level of some support. Couple this with the enduring trend to the upside and we have the fundaments of what could be a profitable trade (order filled as I type this).

On a sidenote guys, please beware of the fact that we are in the midst of August, and so substantial moves may take longer than usual to develop: this is holiday season afterall.

Nothing more to report for now.

Happy trading all!

Should we have foreseen market lows?

Firstly, allow me to apologise to all flatbookers for the extended hiatus. We are back now, and back for good!

Since our last post on July 20th we have witnessed quite the bull run/bear market bounce depending on which side of the fence your long term perspective rests. Here at the flatbook, we don't like to trade contra-trend and as our 200-day MA on our D1 chart starts to head higher we would like to be a buyer of dips rather than a caller of phantom tops. Though we've profited from calling key points of resistance in months gone by (954.4 and 931), it is clear that the former strategy has been more fiscally rewarding to its followers since March lows.

Pertaining to our blog header, W1 charts show enduring obedience to an equidistant channel, whose upper limit first manifested itself as resistance in w41 October 2007! March lows, saw the spx touch, and duly rebound from our channel's lower limit. We will speculate then, that our next test of this channel - which could be as high as 1100- will again fail and see the spx continue to be obedient to our long term equidistant channel as highlighted below. One to watch in the coming weeks/months, that's for sure.



More contemporaneously though, the spx has been pretty much range bound - 993 to 1010 (see chart below) - and so one might be inclined to trade this range; indeed we were speculative buyers at 993.6 early this trading day. Keeping in mind today is Fed Day, we will closed the aforementioned trade and stay on the sidelines ahead of 1915GMT. The potential to piggyback a substantial move in the wake of the FOMC statement is there however, but be warned: this is not a strategy for the weak hearted!



Good luck traders!

Where now for the spx?

It appears that the head and shoulders pattern we reported as dead and buried on Tuesday 14th July, is still in play. The major test is whether we can break and consolidate above the midpoint between the respective peak points on the head and shoulders of the formation. We calculate this to be 944.7 (we are testing this area as I type):



Should we fail to close/consolidate above 944.7 we can expect a move lower, quite possibly back to our 200-day MA (currently at 867.8) in the coming weeks.

The Gold chart below illustrates a near identical scenario:



Here we can see the head and shoulders formation quite clearly. The retest of and subsequent failure at the midpoint between the respective peaks of head and shoulders, presages a retrenchment below the pattern's neckline.

Using this as our rationale, we have effected a small short position. This might prove somewhat premature as neither failure below nor consolidation above our 'midpoint' have yet to transpire. The head and shoulders pattern is indicative of bearish sentiment however, and so I feel vindicates us somewhat in our early entry.

Happy trading all!

Trade Update: S&P 500 short @ 917; EUR/USD short @ 1.4121

We were stopped out for -40bps. With retrospect I think our stop loss was slightly on the big size as hitherto the S&P500's loyalty to our descending resistance had been absolute. Should we have flipped our position with the fracturing of this resistance? Maybe....

With every trade, we must remember that no chart pattern is completely infallible, that is, perfectly applied technical analysis is no guarantee of a profitable trade. Conversely, a losing trade is not necessarily indicative of poor technical analysis and so as traders it is important for us to focus on that which we can control- not the outcome of the trade, but the quality of the thinking behind it.

With this in mind, we instituted a Fiber short @ 1.4121 (1850 GMT) citing a similar descending resistance line to that which we were watching so closely on the S&P500:





Please forgive me putting on my philosophical hat, but I think it's crucial that we understand the very nature of trading in order for us to one day excel at it.

Happy Trading all!

Trade Update: S&P 500 short @ 915.8

We were stopped out at our entry this morning, but have re-actioned a short position at a better price - 917. We intend to move our stop loss to break even once more and hold the position for the duration of the trading day.

Happy Trading all!

I'm not the type to say I told you so, but.....

Ok, let's not be premature with our celebrations! The markets are a great leveller of the overconfident! However, in the face of what seemed to be considerable upside momentum on the back of Intel's having released better than forecast earnings, we traded as the charts told us to and actioned short positions at 915.8 as the S&P500 met our trusty descending resistance line.

Instituting the position after market close is never ideal but the evidence for a retracement from this level (potentially back down to the 200-day MA at 869) is overwhelming. In any case we have moved stop losses to break even which means this is effectively a 'free' trade, if any such thing exists! Whatever happens, it would seem that we are at a critical level.

Currently minding 27 bps profit....

Happy Trading all!

S&P500: Head and Shoulders pattern not confirmed; what next?

The Flatbook readers: We are back with avengence! Our anticipated close below the neckline of the head and shoulders pattern on the S&P500 daily chart failed to materialize and so we did what objective, rational traders do when sufficient opportunity does not present itself - we stayed on the sidelines. That our 200-Day MA has acted as reliable and enduring support from 1st June onwards is worthy of note but more importantly, we will effect a sizeable short once again on touching the descending resistance that yielded our 931 / 954.4 short opportunities - our entry will be 915.8 (ish) should this transpire today -Tues 14th July (see charts below). Until then, we won't move.

The rationale for this trade is once again the extent to which the SPX has remained faithful to this descending resistance and that it has done so since mid May 2008. This may prove to be another very profitable position, as the path to 915.8 might well be followed by substantial market retrenchment. As per our ethos here at the flatbook however, we will trade what we see on the charts rather than engage in conjecture and guestimations as to where we see the market in 6-12 months time.





Let's be mindful this week of the start of earnings season with the standout pending release:

Tuesday - Goldman, Intel Q2 (earnings)
Wednesday - Rio Tinto, LSE (Sales and Trading Update)
Thursday - IBM, JP Morgan Chase, Nokia Q2 (earnings)
Friday - Bank of America, Citigroup, General Electric Q2 (earnings)

Not to state the obvious, but we will keep our eyes on actual results vs forecasted results, so as to be prepared for any potential surpirses.

Wishing you all a profitable trading day!

S&P 500: Head and shoulders pattern....

I've just been alerted to two game-changers:

1. There is a perfect head and shoulders pattern forming on the spx daily (see chart below). Intraday we may still look to action a long position but a strong close below the neckline - 881/880 will be an extremely bearish signal. In this event we will be short.

2. The 200-day MA (Moving Average) is sitting at 874.5 no less! Again, a strong close below this level will further underline the case for effecting a substantial short position.

I cannot overstate the importance of the above for the S&P500 going forward over the next few weeks. Should both of the above transpire - a strong close below the neckline and the 200-day MA- then the potential retrenchment over which so many are now musing, will surely materialise.



Happy Trading all!

Potential setups.....

This morning here at the flatbook there are two potential setups that we are mulling over. The first, brought to our attention by a friend of the flatbook, is an SPX long at 880. Indeed, since early May 2009, 880 has proved a key level of support for the S&P500 and we might be wise to speculate that it'll hold. Momentum however, is very much to the downside and many market insiders are forecasting a considerable retrenchment, something we considered well ahead of time on the flatbook- see our 3rd July post: Breakout to the downside on S&P500?
Nothing actioned yet, but we'll be keeping our eyes on this one....




The second of our setups is similar in form. USD/JPY appears to be in something of a short term decline so a long position is not a conventional flatbook trade seeing that we are going against the immediate trend but we anticipate the 94 level being a source of strength for the Dollar against the Yen. Again nothing actioned yet, but we are watching and waiting......



Safe trading all!

xa2rvy5p6c

Trade Update: Long GBP/EUR @ 1.1634

It looks very much like this is breaking out to the downside, hence we will cut our losses here at 1.611. :-(

Trade Update: Long GBP/EUR @ 1.1634

We are paying particular attention to this trade as we expect a break of the symmetrical triangle highlighted in the previous post. We are hovering around our entry point and break even. Staying nimble at this point will be crucial to mitigate capital risk.

Be careful out there! Safe trading!

Trade Update: Long GBP/EUR @ 1.1634

We will effect a long position at 1.1634 as we envision the ascending support line as highlighted on the charts below, holding in the short-term. We may see a breakout from the symmetrical triangle before the end of the week. The brave amongst us may be tempted to jump on the back of such a breakout (regardless of its direction) with prospective profit on this trade being substantial.





Looking to the week ahead, we will pay particular attention to the MPC's interest rate decision on Thursday. We will publish several FX trade opportunities over the coming few days as and when they arise, so stay tuned!

Happy trading all!

Breakout to the downside on S&P500?

As per our intention, we closed the other half of yesterday's 931 short ahead of the ECB interest rate decision at 915 for a further 160 pips. Not bad for less than 24 hours work, eh? Going forward, we've been monitoring the progress of what appears to be the formation of a symmetrical triangle on the S&P500:



Today's price movement however, saw us breakout from the triangle to the downside which suggests a substantial retrenchment could be on the cards over the coming weeks. We will not chase this move though, but will instead wait patiently for the market to present us with a high probability short entry. I anticipate this being around the 923-928 (time dependent, of course) once again utilizing the same descending resistance that manifested our 955.4 and 931 shorts. Not a bad precedent I'd say, but we'll only take action if this circumstance - a retest of our descending resistance - materialises.

FX wise, we're still watching and waiting. There are at least two pairs that may form high probability into next week.

Happy Trading! Wishing you all a great weekend!

Trade Update: S&P500 short @ 931

We took half our position off at 923 today and have shifted our stop loss to break even - 931 - on the other half. We'll see how it plays out tomorrow morning. Let me reiterate: We do not hold positions short term positions ahead of key data. Thus, we will close the other half by 1245 GMT at the latest.

Should either the ECB decision or the Non Farm Payroll data come in substantially different to forecast (ECB are forecast to keep rates at 1.00% and Non Farm is expected to come in around -360k) the brave among us may attempt to trade the news - a risky strategy, but one that can yield dividends if applied appropriately and in specific market circumstance. I for one, will probably stay away!

Looking ahead, there are several high probability FX setups in the offing that we intend to take advantage of. The middle of next week will most likely see these for fully so stay tuned!

Happy Trading!!!

Trade Update: S&P 500 short @ 931

We have executed a substantial short position on the S&P500, the motivation for which was extrapolated in yesterday's post. Essentially yesterday's 934.1 entry has become 931 today, as is the nature of a descending resistance line (highlighted below in red). We will look to hold this position for the remainder of the trading day. We will close the position, at the very latest, before the ECB rate decision tomorrow- 1245 GMT - and non-farm payroll data at 1330 GMT.

US Bank Holiday this Friday ahead of Indedepnce Day w/e; lower volume is to be expected then.

Happy Trading!!

Stay nimble, stay profitable....

Thursday may prove to be the gamechanger this week as the ECB set their interest rates and US non farm payroll will be released. Let me reiterate then the importance of staying nimble ahead of key data on Thursday; we will not carry any positions into the release of this data.

A prospective SPX short is in the offing today however at 934.1 as we seek to take advantage of enduring obedience to the same descending resistance line that yielded our 955.4 short. Here at the flatbook, we're happy to take advantage of recurring technical indicators particularly when they take shape so uniformly as this one appears to be:



Remember however, to be consistent with respect to trade management:

- ALWAYS implement tight stop losses.
- ALWAYS consistent stop losses sizewise.
- ALWAYS plan trade entries and exits ahead of schedule.
- NEVER move stop losses should a trade go against you.

There is no better or faster way to lose trading capital than to go against these hard and fast rules. Do so at your peril!!!



With reference to the previous post, our long order GBP/USD was not actioned; unfortunately Cable didn't go that low. In reaction to the dramatic and sudden strengthening of Sterling against the Dollar on the back of an unexpected rise in UK House prices in June of 0.9% (vs a median forecast of -0.5%), we may look to effect a short position at or around the crucial 1.6670 mark.





We are short GBP/EUR as of this morning at 1.1841; reason being the descending resistance line as illustrated on the chart below. Incidentally, our short was actioned ahead of the release of the UK GDP data. In line with our mandate, that is to mitigate capital risk outside of our control, I should have closed the profitable position prior to the data. Indeed, we were lucky that the GDP figure came out in favour of our position(-2.4% actual vs -2.0% forecasted; the biggest contraction since 1958), but it's not great practice and we will not find ourselves at the mercy of a jerk reaction to market data anytime soon. Notwithstanding this, the trade is currently in the black and as per our trading strategy, we will continute to trail stop losses accordingly to 'lock-in' profit.



Safe trading all!!

Trade Update: S&P 500 long @ 897.1

As per previous post, our SPX long order at 897.1 was actioned. I anticpated an increase in volatility ahead of Ben Bernanke's testimony, and so I closed for 80bps at around 805. Unfortunately I misread the subject matter of the testimony; it was very retrospective in tone and the net effect on price movement was negligeable.

We are currently casting our analytical eye over a potential GBP/USD setup. We may look to go long at 1.6276 based predominatly upon adherence to ascending support...... chart to follow........

Safe trading meantime!

Trade Update: S&P 500 long

We closed our positon @ 907 ahead the FOMC decision. Seems like it was a good play too, as markets reacted negatively to news that the FOMC will not be extending their programme of purchasing bonds and mortgage backed assets. The prospect of interest rate hikes in the not too distant future looms larger now, than before the Fed meeting. With this in mind, intraday bulls were forced to think twice hence our end of day sell off. Going forward we will pay close attention to a potential long entry @ 897.1 citing the SPX's continued obedience of the ascending support line detailed in yesterday's charts.

Safe trading!!

Trade Update: S&P Long @ 890.8

Let me be clear. This could be a very big day for the markets on the back of the FOMC decision/ statement at 1915 GMT. We will close our long position just prior to the decision around 1900 GMT, so as to negate the roulette wheel that is short term market reaction to data. We are currently 70 pips in the black and so I will trail stop losses accordingly: stop loss moved to 895.2. Why not move the stop to breakeven - 890.8? Our ascending support line is now in play at 895.2. Should the S&P break this support then our rationale for being in the trade would no longer hold water.






Happy trading all!

Trade Update: S&P500 Long

We were stopped out @ 891.2.

Actioned new long position @ 890.8 and will hold for the duration of the trading day. Stop loss placed at 886.8.

S&P 500 long entry @ 891.2

As per yesterday's post, we actioned a long position at 891.2 at a 0710 this morning. This was the point at which tested and rebounded off of the lower parameter of this enduring channel (see chart below). With regard to trade management, we've moved our stop loss to 891.2 - break even - with a view to hold for the interim period as a bounce up to the 920 area is not out of the question. It might prove wise in retrospect to take the pips on the table, however I'm still semi-smouldering at having liquidated our 955.4 short too early - see posts on the 11th and 12th June.

Happy Trading Traders!

So much for a V-shaped recovery.....

With less than 70% of NYSE stocks trading above their 50-day Moving averages in June, compared with more than 90 % in May, is bullish market sentiment finally running out of steam? The World Bank forecasts a 2.9% contraction in the global economy, a deeper recession than was predicted in March. The S&P500 duely reacted negatively opening 1.18% down at 910.38. Worthy of note also, is that we have a crucial day on Wednesday with the convening of the FOMC. We'll watch out for the tone of their statement for clues on fiscal policy.
Keep in mind too, that Corporate Execs are selling stakeholdings at the fastest rate in 2 years: the last time we saw this much selling was June 2007, 1 month before Bear Sterns Hedge Funds filed for Bankruptcy. Total Net Sales reaching $1.2Bln over the past 14 weeks, according to InsiderScore.com.

Technically, the upshot of this is that we find ourselves in limbo. There are two prospective entries on the horizon however, one more speculative than the other. On the hourly chart below we have descending support, in play since June 3rd, which lends itself to a long position at 900/900.6.




The higher probability entry is detailed in the chart below. Since March 2nd we see the S&P500 has been faithful to the ascending channel highlighted. A long entry around the area highlighted in blue- 888/895, may yield dividends with effective trade management.



Happy trading all!

S&P500 Hourly Channel

We were alerted to this channel on the hourly chart by a trader friend of the flatbook. Short term though it may be, the index's obedience of it is irrefutable. Lower lows and lower highs as of June 11th bodes well for the bears going forward; keep this in mind when trading markets tomorrow.

Profitable trading!

Where now for the S&P500?

Nobody knows, is the simple answer. As intraday traders we must aim to be reactionary, not anticipatory. All that we need is manifest in the chart. With this in mind, the daily chart below, suggests a patient approach in the short term, may prove to be the most profitable. We will look to action a long position at the lower end of the channel highlighted - 890/900 - depending on when it occurs. A contiuation of this endruing move to the upside is not out of the question, though the S&P500 remains overbought, notwithstanding recent declines. Conversely, should we see a pop up 948/950 we will consider a short position, theorizing the markets may continue to be obedient to long term descending resistance in play since 20th May 2008.

Happy and profitable trading all!

Trade Update: S&P Long @ 924.0

Stopped out @ 920.0.

Famous last words on Friday:

"Although we anticipate a pullback to at least 930 in the near term, we will close out our 954.4 shorts at 940, with a view to keep the p&l ticking over nicely. Retrospectively this might prove a tad premature, but I suppose hindsight is always 20:20."

Trade Update: S&P Long @ 924.0

We have actioned a speculative long position @ 924 as 927 is a key level of support. We will stay very nimble here as always with very tight stop losses.

Trade Update: S&P 500 short

Although we anticipate a pullback to at least 930 in the near term, we will close out our 954.4 shorts at 940, with a view to keep the p&l ticking over nicely. Retrospectively this might prove a tad premature, but I suppose hindsight is always 20:20.

Look after your p&l. No one else will!

Trade Update: S&P 500 short @ 954.4

Sizeable short executed @ 954.4 as we hit resistance once again at this point. Tight stops implemented. Stay nimble here.

Trade Update: S&P 500 short

We have closed out our short position at 944.1. All eyes on 955 once more. A break above this resistance could spell more upside.

Profitable trading one and all!

Trade Update: S&P Long @ 934.1

As forecast in my earlier post today we sold off into an area of major resistance. However, we are now in an area of tested support as detailed in the chart below and so will action a short term long position. It's important that we stay nimble here with tight stops.

Stay Profitable!!

GBP/USD - All eyes on 1.6650

As per header, we are poised to effect a short position at 1.6650. I anticipate volatile price movement and so we'll need to be quick. Place orders or be very attentive or the opportunity may pass you by before you realise it.

Do I still want to be short this market?

This week is light on news and so lends itself to our paying more attention than usual to the technicals. Let me reiterate: Technically, we are very overbought. As I type the hourly S&P 500 RSI sits at 74.1523 and we are touching the uppermost bollinger band- all very ominous. However, as stated on a previous post, be mindful of the fact that overbought technicals are no guarantee of a sell-off. Many market insiders have shifted from calling a top around 940-960 to 1050, citing a resurgence in the flow of 'silly money' from long only funds. In stark contrast, I am not attempting to call a top from which we will see a substantial retracement, but instead am focusing my efforts towards identifying areas of substantial resistance. Enter 957.4 (daily) and 959.4 (hourly). We will be taking up sizeable short positions at these points with tight stop losses to profit from any retracement, big or small!

Happy Trading!

Trade Update: Cable long

Closed out at 1.6300. Logically, we should hold until resistance around 1.6650 but this might be a good point at which to take profit off the table solely to insure against further downside. As the chart shows, should we see 1.6650 within the next couple of days it'd surely represent a fantastic shorting opportunity.

Keep 'em peeled!

Trade Update: S&P 500 short - Never be afraid to take profit!

We closed out our short positions at 940 and 942 earlier today, the reason being that I suspect enduring market positivity may have some juice in it yet on the back of Friday's jump higher. Let's use this to our advantage and look to put our shorts on at a higher level - the fundaments of trading are rooted in risk to reward after all!

Happy Trading all!

Trade: Cable long @ 1.6180

Long position actioned @ 1.6180. FX traders are being spooked by Gordon Brown's increasing precarious position as PM. Political turbulence then is priced in to a certain extend, furthermore we see a continuation of the recent trend to the upside continuing.

Trade Update: S&P 500 short

We are still short, and holding for the interim period with stops at break even. We still look substantially overbought but it could go either way from here. A move above 950 could signal an extended upside move.

Happy Trading All!

Trade Update: S&P 500 short

We added to our short position today @ 947.3 with tight stops, as resistance continues to hold firm. We'll monitor this position closely through the rest of the week, ahead of key market data.

Today's great traders take advantage of opportunity when presented to them. I happened across an interview given by notoriously successful, professional gambler Patrick Veitch. Reflecting on one of his more famous gambles he remarked, "... it was just a shame that there wasn't a later start to the race", the implication being that he regretted the short window of opportunity presented to him despite profiting substantially from bets he did manage to action. The interviewer responded, "You can't be that greedy, surely?" to which Patrick replied:

"Greed is the wrong word..... there simply isn't any point in not exploiting opportunity to its best advantage within the rules"

Something for all of us to bear in mind. Happy Trading All!

Trade Update: S&P 500 short @ 946.0

We have actioned a sizeable position short the S&P 500 based principally on the following:

- 941-946 is an area of key, enduring resistance just above the 200-day Moving Average, 944 being the January high:




- June is historically one the worst months for indices in terms of returns (second only to September; see chart on previous post)

Let us be mindful though, of the fact that some market watchers called tops at 875, 881, 900 and most recently 925, theorizing that bull markets rarely begin before a retesting of market lows. This could mean that a healthy but substantial market consolidation could be imminent. Volatility is sure to be high this trading week with ECB and MPC interest rate decisions on Thursday and crucial US Non Farm Payroll data on Friday.

With this in mind, we should manage our trades immaculately, trying not to 'call markets' but instead do as the market tells us to. After all, all the information we need is in the charts!

Profitable Trading to you all!

A change in market sentiment in the offing?

Indices have continued to trend upwards with the S&P500 putting in a record month of gains in April. Over the past few weeks however, many chartists have been calling a 'top', attempting to time the apparently imminent market consolidation and position themselves to profit from it. They've lost money in the process. Can you say "The trend is your friend"? Technical Analysis though, is a subjective sport, an art not a science, and so by no means a guarantee of consistent trading profits. But crucially, appropriate usage assists today's diligent trader in timing his/her position. With this in mind, the S&P500 chart looks increasingly overbought. We are also approaching the upper end of a channel within which the S&P 500 has been confined since May 2007:



Remember as well guys that May throught September is historically the worse period for the markets:




I, for one, will be positioning myself accordingly!

Happy trading all!

Trade Update: Cable short

We closed out @ 1.5935 for 65 pips. Maybe should've closed out a bit earlier but we suspected that this could move more substantially than it did today. Money in the bank!

Stay focused!

Trade Update: Cable trade

Our cable trade is now in profit. We have moved stops to break even and will now hold tight. There's plenty of upside potential on this one.

Happy Trading!

Beware Existing Home Sales Data

Existing Home Sales Data is out at 1500 GMT. In layman's terms:

"the annualized number of residential buildings that were sold during the previous month, excluding new construction"

4.68 million is forecast; as per usual, substantial deviation from the expected number could shape the course of the trading day.

Happy trading to you all!

Trade: Winding up S&P long

We are now closing out our long position from yesterday morning; a great looking triple bottom formed on the hourly chart above.
However, a consolidation is not out of the question over the course of the next few days as we move into an area of recently tested resistance - 920/930.