Rob’s Trading Ideas Pre Election and FOMC Drama

Welcome back everyone!  Let’s take a look at several instruments this evening!

The Euro has two consecutive days of consolidation.  It just hasn’t been able to recover above those levels.  For a long side trade we have to get above Thursday’s and Friday’s highs.  There is a lot of work to do for any shorts because of the big accumulation bar.  There are also a bunch of key supports below it.  This is a news driven market the next couple days.  With the next phase of the U.S. election taking place, and the FOMC Wednesday, will make the next couple days emotionally charged.  What that means in English is that if you use technical analysis it will be very different.  We will know that in advance as we are looking for trades.  If we look overextended we should look for shallow pullbacks.  We also need to understand that we will be in a news driven market.  We can talk more about that in the trading room tomorrow morning.

Gold is also a news driven market.  The other day there was a false breakout in the European session.  That is one reason why we focused on it so much as it went into the U.S. session.  There was also a big fat negative divergence.  It just trapped a bunch of retail traders that weren’t paying attention.  When there is a market making higher highs, but the indicators aren’t making higher highs, you need to watch out.  Most of the time they fall back to meet the indicators.  Same thing with the positive divergence side.  It doesn’t work 100% of the time because nothing works 100% of the time.

Crude Oil is budding up against that all important resistance that I highlighted on Friday.  We had this negative divergence, which we got caught in today.  That came as no surprise at all.  I also had multiple trades in the trading room today that focused on short side trades with Crude Oil.  In order to get a long side focus I would need to get above Friday’s distribution bar.  If that happened I would be excited up until the 43 dollar amount.  We can watch and see if that takes place.  Crude oil I will not be looking to do much with Crude at all because of the weekly inventory report to the public.

Ever since the big fat distribution bar we have been getting killed off with the Bonds.  In fact that happened multiple times.  We have a lot of work to do.  If we dip down below the lows set from Monday and Friday we could see further selling.  I have no interest in taking a long.  I understand that there could be new driven activity to the upside.  I would much rather wait till we are clear.  I want to trade in the white space with the bonds.

We are coming up to some key resistance on the DAX.  We stalled out at the distribution bar, where we closed with sell type signals.  We will look to see if the sells keep selling.  That would be the first inclination.  If we see that happen we will be more aggressive.  Otherwise we can look for long side trades if the news warrants it.

We stop dead cold at the key resistance today with the Daily NASDAQ chart.  The same high from Friday ended up being the close of today.  That was also at previous distribution bar.  That helps you see how powerful that is.  The DOW went through the same thing.  There was a gap because of the contract rollover from last week.  It couldn’t break back up.  There was a doji star on the NASDAQ and S&P.  That high was around the 200 day moving average.  The low was at my speed lines.  We were beautifully trapped in there.  That led to a ricochet market.  We spent a lot more time focusing on Crude Oil from a short side perspective.  As we go into the election and FOMC we are coiling up.  I would like to see us break above the highs of the past couple days.  It will be around a week ago on the RUSSELL.  The NASDAQ has more of a recovery.

I have to point this out because you need to be trained to see this.  You all see the bias in the new media in the political stuff.  It is important you see it here too.  Avoid the trap that the crash is coming.  The irony is that the past couple weeks there were plenty of bearish articles.  Is it not ironic that the same day there were two S&P recession fears?  Now there is bearish news front and center.  There is bullish on one side, and bearish on the other.  There the news media can’t be wrong because they picked both sides!  I encourage all of you to please try to avoid making trading decision off of what you see on the news media.  We can talk more about that in future videos.  I keep pointing out the hypocrisy in the news media because it was even on the front cover.  Make sure you all keep watching out for that.  With that being said, have a wonderful night everyone!


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