The Calm Before The Market Storm

Welcome back gang! We’re going to begin with focusing on the Euro.  The Euro had a one bar push up on Friday followed by a pullback into rising support.  We held above there and pushed back up.  Before we can take a long we have to wait for forward progression to the upside.  I want to see it break through and show us that this is support, and then watch it take back off again.  If it does that, we can then watch for some long side opportunities.  Keep in mind FOMC this week will dictate a lot.  I’ll go more in depth with that in a little bit.

Gold is just hanging on for dear life.  It is going nowhere fast.  We are looking to see it break down below the 11000 area for short side activities.  There is a lot of resistance on top and because of that I am not interested in long side trades.  I expect gold to move later this week post FOMC.

Crude Oil was a key focal point this morning.  I walked in the door and it looked like it was a great short opportunity.  However it was not a great short opportunity in reality.  I gave people plenty of reasons why that you can see in the premium video.  Sure enough multiple daily supports held back.  Therefore there were no trades there.  However if we get down below the 4280, I will start getting more aggressive on the short side.

Bonds are still stuck in that gobblygook of resistance.  We hit four of my major resistance levels today and we got killed.  This here is a no trader land and will cause a long of heartburn.  I don’t want to be within a thousand feet of the bonds until post FOMC.  Right now, from a swing trader perspective, it is just gambling.  At this point I would like to focus on day trade longs or shorts only.  With this being in the gobblygook there is not a lot of opportunity for that.  I am going to hold off on bonds till post FOMC.

The Japanese yen is looking a little more interesting and is trying to hold on.  We have this long term resistance here and we keep pushing back up.  One bar up and it comes right back off.  We want it to hold and then take back off.  That could bode well for the long term yen.  But I won’t do anything till it does that.

Today was all about the U.S. Stock Index Futures.  This morning I was drawing charts showing how we had tails on the tops, tails on the bottoms, due to extremely low volatility.  This market is a coiled spring and I spent a lot of time focusing on that this morning.  Get ready for some fantastic moves.  I have a lot of people who are brand new and who are also trying to place big bets before the FOMC.  That is 50-50 gambling gang.  For every argument that you give me that the market will go up, I will give one that it will go down, and vice versa.  The goal right now should be capital preservation.  Let’s wait to see what way this market gets moving before we get too crazy on the swing trading side.  On the day trading side, the volatility is contracting over and over.  We are getting ready for a huge volatility explosion again.  The key is to keep your money in your pocket.  No matter the size of the loss, if you take the risk and lose, you will have less of a financial and psychological standing to take the good trades when they come.

As we go into tomorrow we need to look and see if that contraction of volatility continues.  We will also look to see if there is a breakout of that area by watching the VIX closely.  I will go deeper into that in the premium videos as well.  Overall keep an eye on these and understand that they are making higher lows, and making lower highs in the big picture.  As we are coming down with falling resistance above, and rising support underneath us, we have to wait for the breaks.  Moral of the story is there is some really great trading that is about to smack us right in the face.  They key is will you have the money and the psychology to be there at the right time for the right reasons as we are moving through the FOMC process.  So don’t do anything too crazy in the meantime.

I hope everyone has a great night and I look forward to seeing everyone tomorrow in the live trading room where we will discuss all of this more thoroughly.

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