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!