CTA Trading Desk Morning Report
[7:00am ET] Good morning.
I’ll leave the blogging for today to Geoff, Deron and others. The one picture I have in mind is this one:
Recent comments here are that some writers are loathe to get into political subjects whereas I am not. The truth is that we all have opinions and this is a community forum to express those opinions.
It is a fact that politics affects capital markets. For sure social equity is materially influenced. Some older Americans today are concerned about the likes of Rep. Paul Ryan joining the GOP ticket, for instance. So, we can and do talk about these matters here. This is a blog, not a newsletter or newspaper.
Another comment referred to this community as being “progressive” — in the political sense I suppose. I may be a progressive in the manner that I speak out against Humungous Bank & Broker (HB&B), but clearly my Cara 100 are mostly very large business corporations. I may also be viewed as progressive in some countries, and not others. Bottom line of course is that I am a populist.
Wrapping it all together, I am of the older generation who is fiscally conservative. If I were American, I would not fear Paul Ryan. I would endorse him, just as I do the budget conscious mayor of Toronto, Rob Ford.
Have a good day.
Good morning, Geoff here.
In a low volume rally, stocks continue to show promise but $VIX has fallen out of bed.
This has many traders worried of a quick decline, but the market can continue to rise on short covering.
Neither the equity put/call ratio nor the McClellan Oscillator are flashing warning signals, but the put/call ratio could quickly change.
We remain long, but are cognizant of the markets current overbought position. If you are long and worried, put options as a hedge are not expensive at the moment.
Have a great trading day!
Here are the 7:00am ET snapshots of the latest equity market trading results for Europe, and futures prices plus 5-minute charts of the futures for S&P 500, 30-year US Treasury Bond, US Dollar index, Gold and Crude Oil.
|Symbol||Name||Last Trade||Change||Related Info|
|^ATX||ATX||2,052.95 ||1.74 (0.08%)||Components, Chart, More|
|^BFX||BEL-20||2,334.70 ||1.30 (0.06%)||Components, Chart, More|
|^FCHI||CAC 40||3,439.20 ||12.79 (0.37%)||Components, Chart, More|
|^GDAXI||DAX||6,966.66 ||56.98 (0.82%)||Components, Chart, More|
|AEX.AS||AEX General||333.35 ||1.97 (0.59%)||Components, Chart, More|
|^OSEAX||OSE All Share||483.59 ||2.24 (0.47%)||Components, Chart, More|
|^OMXSPI||Stockholm General||331.90 ||0.47 (0.14%)||Components, Chart, More|
|^SSMI||Swiss Market||6,492.82 ||26.64 (0.41%)||Components, Chart, More|
|^FTSE||FTSE 100||5,862.22 ||30.34 (0.52%)||Components, Chart, More|
|FPXAA.PR||PX Index||927.30 ||5.50 (0.60%)||Chart, More|
|MICEXINDEXCF.ME||MICEX Index||1,455.43 ||3.45 (0.24%)||Chart, More|
|GD.AT||Athex Composite Share Price Index||623.76 ||0.54 (0.09%)||Chart, More|
The team will check in during the day, reporting in the Discourse when there is a new entry.
Enjoy your day.
Cara 100 Company research notes from brokers
Vad’s Catch of the Day
Kaimu’s Sound Money
Deron’s Daily ETF Analysis
Since August 9, the iShares Nasdaq Biotechnology Index Fund ETF ($IBB) has been on our watchlist as a potential pullback trade entry. Though it has not yet traded through our trigger price, it formed a bullish hammer candlestick pattern yesterday, which could lead to upside follow-through in today’s session. Further, it “undercut” (briefly dipped below) near-term support of its 20-day exponential moving average, as well as the low of its six-day trading range. This is illustrated on the daily chart pattern of IBB below:
When an ETF “undercuts” a key moving average, as IBB did yesterday, this serves to sweep poorly placed stops and shake the “weak hands” out of the trade. This has the effect of absorbing overhead supply, thereby clearing the way for the equity to move higher. When a bullish reversal candle forms after a stock or ETF has “undercut” a key level of support, we refer to this type of buy entry as a “pullback entry” (which is one of the preset technical scans on our new technical ETF Screener). Pullback entries develop when an ETF gently retraces from the most recent “swing high” of its uptrend and finds technical support at an area of horizontal price support and/or a key moving average. After this happens, it is important to wait for the ETF to form a “pivot,” which allows for a relatively low-risk pullback entry for swing trading. The best buy pivots tend to occur when an ETF or stock forms a bullish reversal candles (such as a “hammer”) that sharply undercut a key support level on an intraday basis, but subsequently recovers to close near the high of the day. When this occurs, our trigger for buy entry of at least partial share size is simply above the high of the reversal candle. Because of the combined “undercut” with reveral candle that IBB formed yesterday, subscribers to our Wagner Daily newsletter should note on “today’s watchlist” that we have lowered the trigger price for buy entry this trade setup.
The commentary above is an excerpt from The Wagner Daily newsletter, which we have been publishing since 2002. Subscribers to the full version receive our clear entry and exit prices for swing trading our best ETF and stock picks, access to our market timing system, and daily technical trading commentary. Sign up for your 30-day risk-free subscription today by clicking here or visit our trading blog to learn more about our rule-based trading strategy.
Cara on the Metalminers
Cara on the International Markets
CTA Trading Desk Mid-Day Report
CTA Trading Desk Post-Close Report