1. Good day traders and welcome to the premium newsletter for Monday June 17, 2013. 2. Lot’s to talk about today. Let’s first start with the fundamentals and go from there. This week on Wednesday chairman Bernanke is going to provide further clues as to whether or not the feds are going to continue or discontinue the bond buying program.
3. More importantly, traders believe the feds will provide more clear clues as to 1. What indications of economic growth they are looking for and 2. When they are planning to make their decision. This should provide investors with a better idea of what to expect.
4. One of the reasons why the stock market is rising so high this morning is because investors believe that the feds will not discontinue the stimuli program in the near future. So once again negative economic news is interpreted as bullish news. Keep in mind this works in the short term but eventually the market will begin following rational logic and will manifest itself it the stock prices in the next few months one way or another.
5. Before Wednesday the only fundamental news that’s going to be released is housing starts and consumer price index. Both are scheduled for tomorrow before the opening bell. However, Wednesday which is the big day we have 3 major events. All three announcements are FOMC related and the final one will be the Chairman’s conference. All meetings occur between 2 and 3 pm eastern time on wed. I highly recommend you do not initiate any positions till after the announcement. Till wed. wallstreet will be in speculation mode.
6. You can see by looking at the intraday SP chart that the stock market is at a very interesting level. If it breaks the resistance level it will go down to the 1600 level and resistance becomes support the market will try and test the previous high price near the 1700 level. I’m afraid till wed. the U.S. market will be very random without much directional bias.
7. One market I’m very keen on today is the 10 year bond futures market. The contract has a 4X4 entry pattern and technically the trend looks like it’s going to continue down. Also the fundamentals are in line with higher interest rates so make sure you consider this position on the 10 year note. If you don’t have a futures account there are a few stocks that track this contract. Just send me a quick email and I will provide you with a list of the stocks and etf’s that
correlate strongly to interest rates. If you do have a futures account and want to take advantage of this position I recommend selling short on a stop at the 130 14/32. I would place a buy stop at the 131 16/32 level. If the position fills I will update you on the profit target.
8. Another market you want to focus on is the gold market. The gold looks like it’s setting up for a descending triangle. These are very accurate bearish patterns that take several weeks or a few months to set up. I will attach a link to this email that discusses triangle patterns. The fundamentals also point strongly down and the only reason the gold market is range bound and choppy is because the market is very heavily influenced by interest rates. So I’m anticipating a further breakdown in the gold market in the coming days. I will keep you updated here as well as things develop.
9. Looking at our open position PFE is up only a few cents from the previous close. Considering that the stock market is up over 150 points and the fact that this stock is very correlated to the market demonstrates lot’s of weakness in Pfizer at this time. I still believe the stock will be coming down in the next several trading sessions and is reaching overbought levels. A correction is due and we are still in profit target area. Therefore I will hold the position and maintain the original stop loss level as well.
10. There are a few new set ups for today. I will list them for you, however I’m not initiating any positions in the stock market till after wed. report from the feds. a. YUM this is Tricon Global…they are probably the largest fast food restaurant business in the U.S. including kfc chicken, pizza hut and taco bell. There’s a 4 by 4 set up there b. HDB is a Indian bank and the stock is very interest rate related. The stock is following the 10 year bond futures contracts and is highly correlated to it. There’s a 4X4 entry here as well to the downside.
11. Tomorrow I will finish up the relative strength ATR section that we started last and get ready for wed. Announcements.. The second part of the week is going to be busy so I want to everyone to be prepared for it. 12. Good night everyone and I will touch base later tonight or tomorrow morning. http://www.marketgeeks.com
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