Bill Cara’s Blog for Aug 20, 2012
CTA Trading Desk Morning Report
[7:00am ET] Good morning, Geoff here.
This morning, equity futures are slightly lower as the dollar is slightly higher. Following Bill’s extensive Week In Review and my notes last week, I really don’t have much to add this morning.
Stocks should pull back pretty soon, but for what duration?
We could see a slow melt-up to the Jackson Hole Symposium at the end of August and then ECB President Mario Draghi speaks on September 1st so I would suspect that time as a catalyst for a decline should one not occur before then.
I will only show you one chart this morning, the dollar.
It is consolidating in a triangle on the daily chart following a buy signal in the Slow Stochastic. The dollar could be setting up for a rally above the downtrend line which would lead to the sell-off in stocks and commodities that we are anticipating.
We shall see.
Have a great trading day!
Here are the 7:00am ET snapshots of the latest equity market trading results for Europe, and futures prices plus 5-minute charts of the futures for S&P 500, 30-year US Treasury Bond, US Dollar index, Gold and Crude Oil.
|Symbol||Name||Last Trade||Change||Related Info|
||5.40 (0.26%)||Components, Chart, More|
||24.40 (1.03%)||Components, Chart, More|
||0.86 (0.02%)||Components, Chart, More|
||31.75 (0.45%)||Components, Chart, More|
||0.18 (0.05%)||Components, Chart, More|
|^OSEAX||OSE All Share||490.07
||0.34 (0.07%)||Components, Chart, More|
||0.30 (0.09%)||Components, Chart, More|
||4.23 (0.06%)||Components, Chart, More|
||8.53 (0.15%)||Components, Chart, More|
||6.10 (0.64%)||Chart, More|
||16.96 (1.17%)||Chart, More|
|GD.AT||Athex Composite Share Price Index||627.18
||12.09 (1.89%)||Chart, More|
The team will check in during the day, reporting in the Discourse when there is a new entry.
Enjoy your day.
Cara 100 Company research notes from brokers
Vad’s Catch of the Day
Kaimu’s Sound Money
Deron’s Daily ETF Analysis
Since selling off to “undercut” support of its 50-day moving average two weeks ago, the inversely correlated ProShares UltraShort Euro ($EUO) has been trading in a tightening, sideways range, holding above support of its primary uptrend line and 50-day moving average. As the daily chart below illustrates, the primary uptrend has been in place for many months, while $EUO has been in a four-week retracement off its July high:
This type of chart pattern shown above is normal and healthy, and is indicative of what a steadily uptrending stock or ETF typically looks like. Whenever one trendline is moving in one direction (the ascending dashed blue line) and another trendline is moving in the opposite direction (the descending dotted red line), the longer-term trendline typically wins out. This is why we always say that the longer a trend has been in place, the more likely the trend will remain intact. In this case, odds favor a resumption of the dominant uptrend in $EUO. Further, because this is a Pullback Buy setup, the reward to risk ratio of the trade setup is favorable. For this pullback entry on our ETF trading watchlist, regular subscribers of our Wagner Daily swing trading newsletter (details here) should note our exact entry, trigger, and stop prices based on our technical trading strategy.
Going into today’s session, keep a close eye on the performance of $QQQ, an ETF proxy for the Nasdaq 100 Index. Last Friday’s gain put $QQQ within close striking distance of testing major resistance of its late March/early April highs. This does not mean we should suddenly be selling our long positions (since our market timing model is now in a “buy mode”), but a pullback as the index runs into this resistance level would not be surprising. We will possibly analyze $QQQ in our technical ETF commentary later this week, depending on its price action over the next few days.
For anyone interested in the psychology of trading, particularly newer traders and investors, you may enjoy an article I wrote over the weekend, The 4 Most Dangerous Emotions For Traders. Good trading to you today!
The commentary above is an excerpt from today’s issue of The Wagner Daily, our nightly stock and ETF trading newsletter. More details and signup available at http://www.morpheustrading.com.
Cara on the Metalminers
Cara on the International Markets
CTA Trading Desk Mid-Day Report
CTA Trading Desk Post-Close Report