After A Great Week, Rob Looks For What’s Next In The Market

Welcome back, gang. We will look at several markets tonight. We have some great follow-ons after last night’s videos.

First thing’s first, is the Euro. After our two bar break, the Euro continues to stay strong. We are going to go into Monday with a little bit of a challenge. We have an M-Pattern sell signal, much like we had high stochastics going into Friday morning that put us under pressure. We are going to be under some pressure on Monday. But at the same time, overall, we are bullish on the Euro at this point. In the short term, if any sort of pullbacks happen in the speed line, I’ll let go and not take any trades in that area – just like this morning. Any sort of sign of resurgence back to the upside, I will be looking for long side trades, especially above Thursday and Friday’s highs.

Gold has a similar situation. We had kind of a weird two bar break. We had a two bar break but really the two bars are supposed to close near the highs, this one closed 50% of its highs on Thursday. But it closed more than 50% off its lows today. It held in like a champ, kind of awesome key supports. So, if we go into Monday breaking out above Thursday’s high, this distribution bar right here, if we can break above that, I’ll be looking for some very aggressive long side trades on Gold. There is a lot of upside opportunities there if we can get above the distribution.

We certainly focused on trading Crude in the room this morning on its little rebound. We had the original 2 bar break, held, took off for about $12,000 a contract on the upside, and now we hit this key resistance. We continue to struggle there. Until we get back above the 6250, we probably will not do anything new on the long side. In the meantime, we are holding some key support which is great. I get a little bit nervous and start focusing on some shorts if we can get back down below Friday’s low because that is an inventory retracement bar of the accumulation bar type. So, if we get down below the 20 period moving average that could lead to some heavier sell side. Bottom line, longs above this side and shorts below this side.

Bonds was basically an intraday trade focus. Once we got back above the speed lines this morning, everything looked really good on an intraday basis so I let my intraday Bond traders that this was a great trade to the upside. I was not focused on taking a bond trade, but gave that information to my bond traders and it worked out very well. Going into Monday, we are cooked in the short term from a stochastic perspective. I’d rather see this pullback and look for some further long side. We are in a funky spot with down trending resistance but rising support underneath so I will need more information before I look for anything more than a day trade at this point. As you know, all last year and going into this year, I gave some great swing trades but it’s not ready for great swing trade ideas right now – it is more intraday basis at this time.

The Japanese Yen has been coiling up. We’ve been sitting here for well over two months now in a very tight range. The indicators have done something very spectacular. In fact, the last time that we did something like this and I pointed out to you, was last year before the big drop in the Japanese Yen. We are in the phase and are getting another incredible coil so watch out as there could be some fantastic movement ahead. Right now, I’m going to keep my money out of this one until it starts breaking out or breaking down – just like last year when it lead to some incredible moves.

The Pound is looking pretty good. I would like to see it take off above Thursday’s high. We have a distribution bar, which is an inventory retracement bar. So as you can imagine, I’d like to get above this 15830 area, then, it will likely be pulled to the 160 area. 160 over the years has been a key magnet to both the resistance and support side.

The DAX is in a peculiar spot. Right now, I need a little more information on the DAX, unlike the US Stock Index Futures which are a little more prime. The DAX is caught between some major resistance and major support. For weeks, we have been sitting there between those two bouncing back and forth. That has to resolve itself. I have to tell you, I’m really hoping it resolves itself to the upside based on what I’m looking at in the Stock Index Futures. This is going to be very important going into next week – can we break above Friday’s highs? That’ll bode well for US and Foreign markets alike.

Speaking of US markets, everything that I told you in last night’s video on the Stock Index Futures was really a factor going into today. We mentioned that the problem is that we are above the speed lines on these different indices, but stochastics on each of these were basically very over cooked. So, in English, we were caught between a rock and a hard place walking into this morning’s sessions. That was the theme from the very beginning over and over again as we started off the session. That continued to be the case – just when the Russell was looking like a really good short, it was bouncing and that I would not short it. Sure enough, the market spiked right back up catching anybody that wasn’t attentive and didn’t listen to that information with a very nasty surprise. Fortunately, I said that our focus was on Crude Oil and that was a very good choice. Last night I spoke about the risk of not going very far because we had bullish sentiment because we were above the speed lines above all 4 Stock Indices, but at the same time, we had stochastic sells and that meant we were not meant to go anywhere. Going into next week, we are still above the speed lines on all of these. We have settled down a little bit on the stochastics. I’m hoping on Monday, we will see what I refer to as a mini trade where it pops up, pulls back, and starts to take back off again from these higher levels. I’d like to see that happen on all four Stock Index Futures, as well as two additional things: 1. I’d like to see the DAX taking off as well (Rising tide, lifts all ships.) 2. I’d like to see the VIX start to get down below the 12 below – this will make it much easier for the Stock Indices to continue to drive higher. So if the VIX is going down, we are looking for the Stock Market to go up.

Monday morning, we are going to be looking for three things: For the Stock Index Market to push higher. For the DAX to push higher. And for the VIX to drop. Anything outside of those three things, means that I’m going to pause a little bit and see if we start drifting back down towards these speed lines, then we will reevaluate for trading ideas at that time in the trading room. Those are the key things to look at going into next week. These are also very important things for swing traders because they need the Russell to get above the channel. Also, we need a third day – we have two bars above nicely on the other stock indices but we need a third day to show us that the speed lines are really support at this point. Next week will be a pivotal week for the Stock Market for day and swing traders alike. I’m looking forward to keeping you updating. Again, thanks for tolerating the voice – I’ve been under the weather for the last few days. Thank you for all of the congratulations for winning the trading competition in Las Vegas. Also, thank you for all the well wishes on my health. I look forward to seeing you next week – let’s have another great, fun, and awesome trading week. Take care everyone.

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