Rob’s Outlook And Focus For Next Week’s Stock Market

Welcome back, gang. Let’s get back to our regular format – not just using the channels. We will take a thorough look at what happened last week. First thing’s first, the VIX is starting to make its way down below the 12 level which is what I like to see for some good long side trading. Otherwise, I’d like to get above the 18-20 area for some good short side trading. What I do not want to do is stay in this sideways band. It tends to be choppy and a less directional base. I am glad to see that we are making a move there.

The Euro, throughout last week, as you know the focus was once we fail the channel to take further short sides. We were giving you lots of different levels, 10780, 1060, and then 10580. 10580 held here – these 80/20 rules really doing a good job there. Going into next week, I’m going to see if we can get below 10580 for the next major short opportunity in the Euro.

I am not a big fan of Gold just yet. We do not have the 2 bar break to the upside here and we have not broken down below. There is really nothing. It is trapped in no traders land and whipping back and forth in the kill zone. So, we are staying away from that for now.

In Crude Oil, we had the 2 bar break earlier in the week and held the channel. My focus on Crude is buy side and we will continue to be going into next week as long as we stay above the speed lines. Anything below a 5170, I’m going to step away from it and not do anything with it. Anything above 5170, I’m going to be looking very hard for my next long side trade.

The Stock Index Futures, I told you important in the last several days how important the channels are going to be, how strong the Russell has already been holding this market up. Now, the other markets are getting in line with the Russell. The Russell is once again the leader and is why we tend to focus on trading it a lot. Going into next week, we will focus on the channel. As long as we remain above the channel and above the speed lines, I will be looking for long side trades. I won’t be aggressive initially because we are due for a little bit of a settlement back into the speed lines. We want to wait to see how we walk in the door Monday morning and see if we could get a little bit of a pause or pullback, hold the speed lines, and take back off again – that would be my preferred trade choice. I would like to let it catch its breath prior to another leg. Otherwise, if it does start to take off at the US open, I’ll let it take off initially, wait for a pullback, and then look for a re-entry opportunity. The bottom line is that long side trades are the focus for me in general as long as we stay above the speed lines and the channel.

Next, we look to the DAX. The DEX is something that I talked with you guys about yesterday. I wanted it to breakout above this key resistance area. We told you, the sky is the limit. After that, the indicators were all firing off here and breaking out above that would be really good. Sure enough, it was quite a day for the DAX, up just shy of 2%. At this point, while we have what we got a Hockey Stick Sell Signal and a Hoffman Fade, we are due for a little bit of a pullback. As long as we can remain above the breakout point from Friday, I am going to be looking for continuations longs. So, this is similar to staying above the channel in the US Stock Index Futures.

In the Bond, we are stuck between a rock and a hard place. We have some falling resistance in the short term and rising support in the long term. I want to give this one a little bit more time to look for the next major trade. I have a couple of good trade ideas that have all come to fruition on this. There was the aggressive breakout trade, the more conservative trade, all those kind of came to pass. Now, we are just holding here, as you can see at this key area. I want to see a good breakdown that could lead to some short term selling, especially with the indicators the way they are. If we could hold above the speed lines, we could get another resurgence. We will have to wait and see – I don’t want to jump the gun on that. There are too many good opportunities out there such as the Euro, Crude Oil, US Stock Index Future, the DAX, etc. Way too many other things out there that look real good right now to get too overly aggressive on this one. Let it start to play out and look for the next trade there.

It was a great week and we did a lot of great things. I’m looking forward to next week to do it all over again together. I will see you Monday morning in the Live Trading Room or in next week’s videos. Have a great weekend everybody. Take care.

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