Here’s The Game Plan
The markets liked what
they saw yesterday in terms of the economic numbers. Within 45
minutes the S&Ps and semis were carving out intra-day highs and offering some
great HVT pull-backs. There were two trades
that I was involved with, both in Texas Instruments
(
TXN |
Quote |
Chart |
News |
PowerRating), go back and look at your 1 and 5-minute charts on both
TXN and the S&Ps at these times to see the
set-up
6:46 AM PST
7:16 AM PST
Gold stocks on the other hand finally gave up
some ground. You will recall in my last two columns that I was beginning to get
concerned with their price action. Yesterday was the day that showed me it was
time to take profits on the majority of my positions. My investment positions
in my IRA’s for example remain. I still believe that we are in the early stages
of a gold bull market. However, like any trader who effectively balances greed
and objectivity, it was time to take some money off the table.
Meanwhile the short in the
Euro mentioned in yesterday’s column is
starting to play out. Technically it was a pretty solid set-up on its’ own,
however, fundamentals play a critical role in FX. Consider the following quote
and chart below, it is a pretty solid back-drop for shorting the Euro:
“We are bullish the euro over the long
haul. Our
long-term target for the currency is 1.5000. However, the euro will have a deep
pullback in the near term if the U.S. economy continues to create
jobs. We are placing our
bets on strong job creation.”
Source: BCA
Research
Overall the recent dollar strength and weakening
Euro has helped out some shorts I have mentioned in columns over the last few
weeks. Specifically, EUR/JPY,
CHF/JPY, and EUR/CAD.
I was stopped out of the long AUD last night
at break-even.
The only other trade I took in the afternoon was
a trade in Marsh & McClennan
(
MMC |
Quote |
Chart |
News |
PowerRating). I
had mentioned to the subscribers in
my Trading Room that this one was on my radar screen due to all the fall-out
from the Putnam mutual fund scandal. Yes, the stock went on a straight shot
higher right out of the gate, however, the set-up below was more my liking. I
did exit the trade too early, but still managed to grab 30 cents.
So, the game plan remains the same: Trade
early, be decisive and selective. Sounds simple — it is — however, most
traders cannot sit that still, much to their detriment. Remember, trader income
tends to be lumpy.
| Support/Resistance Numbers for S&P and Nasdaq Futures |
||||||||||||||
|
As always, feel free to send me your comments and
questions.