Keep An Eye On These 2 Indexes Today
The S&P’s came roaring
back in a big way yesterday shaking off all the bad news from the
past few days. It was one of those sessions where you simply had to pick your
spot, place a stop loss and let it be. Micromanaging the trade yesterday was
counter-productive. In fact at the pace the market trades these days it is fast
becoming the obvious way to approach it. Here are a few examples:
So, as the market continues to operate in a less
volatile, albeit trending manner, we are left with no choice but to adapt.
Frankly, it is not that much of an adaptation, it is simply taking the same
entry and exit techniques associated with HVT
and using them on a 5-minute chart. It takes getting used to not reacting to
every little move in the S&P’s but it is required. In a volatile market where
you get generous moves in the S&P’s on a 1-minute chart, it is one of the most
effective ways to maximize profits while minimizing draw-downs. However, the
current market conditions do not offer that.
In terms of technical levels for today keep an
eye on these:
BKX
923, takes out the yearly high. Daily chart
looking strong, strong banks = strong market
SOX
420, this is key support and needs to hold. The SOX has
been a laggard and got pretty beat up on the recent rout in the market. I
suspect that if does not stabilize soon, the market, Nasdaq in particular will
have trouble moving higher.
One last note, I have been mentioning gold stocks
a lot recently, particularly Newmont (NEM)
since it continues to exhibit excellent range intra-day. You will recall that
in Monday’s column I mentioned a couple of key levels. On Monday, we did in
fact get a nice bounce off of them and yet again today. The trades set up
identically on the 60-minute charts but I used a 5-minute chart to pinpoint the
optimal entry points. See the charts below:
Meanwhile back on the Forex scene, the
AUD continues to power higher after Tuesday’s
“convenient” intervention by the BOJ. One has to wonder what the point is, the
prices are right back where they were prior to the intervention. However, this
story just crossing the wires indicated just how trecherous it can be sometime.
Remember the 15-minute charts I showed in yesterday’s column?
As we have pointed out yesterday that the MOF”s room for intervention seems to
be already smaller than Y10 trillion for this FY (actual figure was Y11.9172
trillion as of September 26) and thus the ministry might need to ask for
increase in the extra budget, today”s NKS reports the MOF is mulling additional
Y10-20 trillion room (and the NKS”s MOF friendly tone remains unchanged). The
MOF”s attitude is clearly against the G7 message that G7 members need to share
burden to adjust the US”s huge deficits. Night desk traders said there were
persistent bids placed every 10 points from 111.00 in the DLR/YEN market,
and the ministry”s routine work to buy the Dlr from the early morning seems to
have begun again.
Source: MCM
Currency Watch
There has been across the board strength in the
so-called commodity currencies all year (AUD, CAD and NZD). Yesterday afternoon
I established a long in the NZD at .60 and
am looking to add to that at .6821, a 52-week high. Those of you who took the
AUD long are in good shape as of 4 PM PST on
October 1st. I would make sure you have a stop loss in place to protect any
profits as further intervention can never be ruled out.
I know that the Forex content I have been placing
in my column is new to most readers, so feel free to drop me a line, I am happy
to explain my thoughts and strategies with you.
| Support/Resistance Numbers for S&P and Nasdaq Futures |
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As always, feel free to send me your comments and
questions.