After This Holiday Rally, You Better Know When To Walk Away

This week’s investor insight will make you think twice about the current stock and bond rally as we head into the end of the year.

We get a lot of questions about if the stock market has bottomed or if it is headed lower and how they can take advantage of the next Major market move. Over the next 6 to 12 months, I expect the market to have violent price swings that will either make or break your financial future. So let me show a handful of charts and show what I expect to unfold.

Let’s dive in....Continue Reading Here.

Weekly Futures Recap With Mike Seery - Crude Oil, SP 500, Gold and Coffee

We've ask our trading partner Michael Seery to give our readers a weekly recap of the futures market. He has been Senior Analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets......

Crude oil futures in the July contract finished the week down about $1.50 closing around 102.70 a barrel after hitting 1 year highs earlier in the week. The crude oil market is trading above its 20 & 100 day moving average continuing its bullish trend in recent months as economies around the world are improving as well as the U.S stock market hitting new all time highs on a daily basis helping support crude oil prices. We have entered the strong demand season for unleaded gasoline as there will be a lot of drivers on the road increasing demand which could propel prices back up to last August highs of around 112 a barrel. If you are looking to take advantage of this recent dip in crude oil prices I would remain a buyer as long as prices stay above the 10 day low of 101 a barrel which is about $1.75 away or $900 risk per contract.

Don't miss this weeks webinar "The Insiders Guide to the Big Trade"

The S&P 500 hit all time highs once again along with the transports this week as the Vix or fear index is at a 7 year low as the S&P 500 traded up another 20 points this week at 1917 as Apple Computer was also up $20 this week currently trading at 635 a share which is propelling the rest of the equity markets higher as the trend seems to be getting stronger and stronger and I’m still recommending a long position in this market .The S&P 500 is trading far above its 20 and 100 day moving average telling you that the trend is higher and with the 10 year note trading at 2.45% which is also propelling stock prices higher as companies are able to borrow large amounts of money at practically nothing while increasing dividends while also buying back their shares decreasing their float therefore increasing earnings per share. I love this market to the upside for one reason because the market has very little volatility and continues to grind higher with solid chart structure to continue to play this to the upside.
TREND: HIGHER
CHART STRUCTURE: SOLID

Gold futures in the August contract finished down for the 5th straight trading session finishing lower by 45 dollars this week at 1,245 an ounce continuing its bearish trend trading below its 20 and 100 day moving average as I remain bearish gold prices as I think there’s a high probability of a retest of 1,200 and if that level is broken look at a re test near the contract low of 1,180 as prices look very bearish in my opinion. You have to ask yourself at this time would you rather own gold or stocks as investors are choosing to sell their gold and are buying stocks and it seems like on a daily basis. The problem with gold right now is everybody’s buying the S&P 500 which hit another all time high today as there is a very little interest in purchasing gold at the current time especially with bond yields continuing to move lower as the money is going into bonds and stocks and out of gold. Gold futures are still higher by about $60 in the year 2014 but traded as high as 1,390 earlier in the year and has given back much of this year’s gains that it had and I do think the trend continues to the downside and if you took my original recommendation place your stop above the 10 day high minimizing risk in case the trend does change. Gold is famous for having large washout days meaning it will sell off $50 in one day and volatility will spike as I said in yesterday’s blog & I sense one of those days is coming as the trend seems to be getting stronger.
TREND: LOWER
CHART STRUCTURE: SOLID

Coffee futures in New York are sharply lower this Friday afternoon trading down 445 points at 177.50 a pound trading down for the week continuing its short term down trend as prices spiked to a low of 170.80 on Tuesday as I have been recommending a long position in this market between 165 – 170 so currently I’m still sitting on the sidelines waiting for the opportunity to arrive. A large coffee exporter named Ipanema Coffee is suggesting that yields could drop by as much as 40% as there are small beans in the cherries which could spike up prices if they are correct on their assessment as the numbers will be coming in the next couple of weeks as in the beginning of the season we were expecting 53 million bags then down to 43 million bags due to the severe drought and anything lower than 43 million bags would be bullish this market and I do expect volatility to rise here in the next couple of weeks. Prices have been going sideways to lower in the last couple of weeks because of the fact that we have very little fresh fundamental news on crop size but that will change quickly so continue to look to be a buyer at 165 – 170 level as you will never pick a bottom in coffee but I do not think prices are headed back down 140 as this whole rally started at 125 as there was significant damage done as I talked to many producers down in Brazil and this was no joke as this was one of the worst droughts in history. Coffee prices are trading below their 20 day moving average in the right near their 100 day moving average which has not happened in more than 4 months telling you that the trend is mixed at the current time as I’m laying in the weeds waiting for an entry.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Get more of Mikes calls on orange juice, soybeans, cotton, corn, wheat, hogs and cattle....Just Click Here!


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Small Trading Accounts are Ideal for These Trading Methods

We have an important workshop to invite you to coming up on Thursday that really strives to put the opportunities the big guys benefit from into your hands. What was once unreachable is now in our grasp for small account traders.

Don't let the big stock names scare you! Sure, if you bought 100 shares of Apple, Google, Netflix and Amazon you'd need over $200K. But, there's a much better way for you, the individual trader to participate in these high flying opportunities.

This webinar is dedicated to 'everyday' folks starting out with a small account. In this webinar, you'll learn:

    *   Options Recommendations - top stock and ETF picks
    *   Risk Management Tips
    *   Ways to Increase Your Account and Scale
    *   Using Mini and Weekly Options to trade the big names for a fraction of the cost
    *   An exact road map to follow to start trading options now
    *   Minimize risk but still participate for maximum upside
    *   Strategies for the small account trader to use now with options and a trading system with training included

Want to know how to do it?

Successfully Trading Options with a Small Account - Including High Flying Tech Stocks!

This Thursday, April 10th, 2014
Three times to choose from....12 pm EDT / 9 am PDT / 4 pm GMT

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In this webinar, we'll teach you the finer points on how to trade big name stocks with small time capital.

Just Click Here to Reserve Your Logins for Thursday!

See you in the markets!

P.S. Can't make it on Thursday?  Reserve your seat anyways and we'll send you the recording! 



Here's a complete schedule of our Free Trading Webinars....Just Click Here!

Watch a "small account" Become an Internet Sensation

Whether you are trading gold, oil, stocks or currencies there is no shortage online of stories about legendary trades. What there is a shortage of is proof that the trades actually took place.

If you are a regular reader here at The Crude Oil Trader then you are probably familiar with our trading partner John Carter. John has recently made quite a name for himself as he began sharing his methods of trading that could be done with any size account.

John is shaking things up again with a new video that shows a recording of John trading LIVE with his REAL accounts on a day he made over $223,000 in one day.

The trades were.....

$97,000 on Apple, ticker AAPL
$93,000 on Google, ticker GOOG
$104,000 on Priceline, ticker PCLN

John will show you exactly how he traded the above trades, what he did right, what he did wrong, and what YOU can do to trade like this. And he points out what a 'small account' really is and how the overall goal is to not only make successful trades but to make a regular income source from your trades.

Watch the video here and please feel free to leave a comment and let us know what you think of John's new simple trading system.

See you in the markets,
Ray @ The Crude Oil Trader

View "Watch a small account Become an Internet Sensation" right now!

Making money with Apple using any size account AAPL

If you missed John Carter's webinar last week you missed how he explained his favorite trade setups. In the last couple of days he has used these exact setups to make himself some killer profits trading Apple [AAPL] options. And the best part about these trades is that they can be profitable with any size account.

Watch John's latest two part video HERE

In this free two part video he explains his EXACT entry signal, and how he managed this trade. It's actually really simple and you've got to see this.

And John is holding another webinar Wednesday night at 8 p.m. eastern, in which he explains his trade setups for trading options in detail. So while you are there make sure to sign up for the webinar before all the slots are taken.

Click here to watch two part video and sign up for webinar

See you Wednesday night!
Ray C. Parrish
The Crude Oil Trader

The SP 500, Apple Earnings and Feeding The A.D.D. Monster

The last hour of trading was intense on Tuesday and then all eyes were focused on Apple’s earnings which were released around 4:30 ET. The initial reaction to the earnings release is negative although as I write this AAPL is bouncing sharply higher in after market trading on strong volume.

To put the final hour’s volatility into perspective, at 3 P.M. Eastern Time the S&P 500 Index was trading at 1,217. A mere 12 minutes later the S&P 500 Index pushed 15 handles higher to trade up to 1,232. Then sellers stepped in and pushed the S&P 500 lower by nearly 12 handles in the following 20 minutes.

The price action was like a roller coaster and I was sitting watching the flickering red and green bars in real time with the anticipation of a child. It was the most excitement I have had in quite some time, but please don’t hold that against me. I don’t know whether reading my previous line makes me laugh or cry, but the truth must be heard I suppose.

Enough self deprecation, I want to get down to business with some charts and what is likely to happen in coming sessions. The sell the news event in AAPL has the potential to really change the price action tomorrow. If prices hold at lower levels, the indices could roll over sharply tomorrow. The S&P 500 E-Mini futures contracts are showing signs of significant weakness after the earnings miss by Apple in aftermarket trading.

Some other potentially game changing news items came out of Europe where Reuters reported earlier today that the Eurozone will likely pass legislation that will ban naked CDS ownership on sovereign debt instruments. Additionally, Treasury Secretary Timothy Geithner stated this morning that a forthcoming FHA announcement involving a new housing refinance plan was going to be made public in coming days. The statement regarding the new FHA plan helped the banks and homebuilders show relative strength during intraday trading and likely were behind much of the intraday rally.

I would point out that the S&P 500 Index (SPX) broke out slightly above the August 31 highs before rolling over. The reason that is critical is because the S&P 500 E-Mini futures did not achieve a breakout, but tested to the penny the August 31^st highs. I am going to be totally focused on tomorrow’s close as I believe it will leave behind clues about the future price action in the S&P 500 leading up to option expiration where volatility is generally exacerbated. The daily chart of the S&P 500 Index is shown below:



If Wednesday’s close is below the recent highs near 1,230 we could see this correction intensify. The price action on Tuesday helped stop out the bears and if we see a significant reversal tomorrow the intraday rally today will have been nothing more than a bull trap. The price action Tuesday & Wednesday could lead to the perfect storm for market participants where bears were stopped out and bulls are trapped on the potential reversal.

Another interesting pattern worth discussing is the head and shoulders pattern seen on the SPY hourly chart. The strong rally to the upside may have indeed negated the pattern, but if prices don’t follow through to the upside in the near term and the neckline of this pattern is broken to the downside we could see serious downside follow through. The hourly chart of the Spider SPY Trading ETF is shown below:

Ultimately there are two probably scenarios which have different implications going forward. The short-term bullish scenario would likely see prices breakout over recent highs and push higher toward the key resistance area around the 1,260 price level. The 1,260 price level corresponds with the neckline that was broken back in August that led to heavy selling pressure.

Bullish Scenario
If we do breakout to the upside, the longer term ramification may wind up being quite bearish as most indicators would be screaming that price action was massively overbought at those levels and a sharp selloff could transpire into year end. The daily chart of the S&P 500 Index illustrates the bullish scenario below:




Bearish Scenario
The short term bearish scenario would likely involve a break below Monday’s lows that would work down to around the 1,140 level or possibly even lower. If a breakdown took place, a higher low could possibly be carved out on the daily chart which could lead to a multi month rally that would likely see the neckline mentioned above tested around the holiday season. The daily chart of the S&P 500 below shows the bearish scenario:



There are a variety of reasons why either scenario could unfold. Most of the analysis that I look at argues that the bearish scenario is more probable. However, based on what happened in the final hour of trading on Tuesday and the surprise earnings miss from Apple anything could happen.

I will likely wait for a confirmed breakout either to the upside above recent highs or to the downside below the neckline of the head and shoulders pattern illustrated above before accepting any risk. I am of the opinion that risk is exceptionally high in the near term. I am not going to try to be a hero, instead I am just going to wait patiently for a high probability setup to unfold.

Until a convincing breakout in either direction is confirmed, I am going to sit on the sidelines. I am quite content just watching the short-term price action without taking on any new risk. For those that want to be heroes or feel they have to trade, I would trade small and use relatively tight stops to define risk. Risk is excessively high!

Subscribers of OTS have pocketed more than 150% return in the past two months. If you’d like to stay ahead of the market using My Low Risk Option Strategies and Trades check out OTS at Options Trading Signals.Com and take advantage of our free occasional trade ideas or a 66% coupon to sign up for daily market analysis, videos and Option Trades each week.

JW Jones

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