Bo Yoder 3D Apex Trading Update

So many traders and investors get lost looking for “the next big win”, and forget that there is a LOT of profit potential in the smaller reliable and repeatable setups. Last week, I did not see anything on the macro level that interested me, but there was an attractive short term opportunity that I highlighted for you in Johnson & Johnson (NYSE:JNJ)JNJ 4-18

 

In the states, there is a lot of short term real estate investment.  Buyers find property that they believe is “cheap”, then fix them up and “flip” them back into the market for a profit.  This can be done in any asset class, and it is exactly what drove my trade this week.  I saw plenty of bullish power still active in Johnson & Johnson last week, and projected that IF the support level I highlighted in green were to be tested, it would attract a new surge of bullish buyers to enter the market.

 

I felt the odds were extremely high that if I could pick up some inventory “cheap” at that level, I would be able to unload it quickly for a tidy profit in a matter of days.  I was not trying to predict a trend or any type of sustained move, but rather was “providing liquidity” to the setups that would be formed as the reversal played itself out.

 

These “Trading As A Liquidity Provider” scenarios make up the bulk of my personal trading as they offer extremely low risk and the ability to turn over my capital very quickly so that I am able to move on to the next profit opportunity.

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Don’t get hot and cross – it’s Easter!

The more I looked through the price action of the last two weeks, the more I am reminded not to look for ‘something that’s not there’.

It seems that consolidation abounds and while there have been some significant moves within ranges, it really doesn’t pay to be trading more on hope than logic!

The one thing that the forex market does well, is to bring out the addict in all of us and, with that, comes the need to trade.

I accepted this long ago and eventually cured myself (‘healed’ is perhaps the word the psychs use?!); however it was a long process, and it took time and much lightening of the bank account: in and out of therapy, spending time seated ‘in the round’ with my group. Our stories were all similar and we were ready to seek redemption, say sorry and do it all over again.

My name is David and I am an addict: I cannot stop the desire to buy, or sell, or hedge or…..and it went on. There was much hugging and empathetic nodding in those days, as I revealed my inner soul and attempted to exorcise the demon need to make money.

You gotta be in it to win it!

Well indeed that is true, but the reality is that you don’t need to be in it all the time. Patience, timing, entry levels. Give yourself the best chance.

Let’s look at a few current scenarios.

The H4 Gold chart below shows a couple of examples of opportunities. The first was the evident breakout of the downward channel: selling the break with a close on re-entry back into the channel was a reasonable gambit and one that yielded a decent entry (maybe employing the H1 chart).

 

This trade could have been taken with a risk/reward of 1:2 or even 1:3.

In the last 3 days we have now moved into another breakout opportunity as marked the consolidation in the shaded box. A move to the topside, in my opinion, has a target of USD15, and, to the downside, of USD20, with USD5 stops. Bigger picture I am looking at the downside and feel we are more likely to test USD1250, 1225 and I will be looking for new lows.

david1

 

Wedged in! A different perspective, pattern-wise is offered by EURUSD and EURJPY.

david2

EURUSD Daily

Similar stories, similar patterns and likely breakouts in the not-too-distant.

Keep an eye to the news for clues but these will provide a very good trade shortly. My money is cautiously on the downside.

david3

 

EURJPY Daily

US Oil is providing a very interesting upward possibility with a daily double top on the resistance and a rising support line from 9 January now coming in around USD101. I had called this well in my recent articles looking for targets 104-105 which have been achieved over the last week or so. I didn’t get the most out of the trade which is frustrating. However, now I would buy dips to 101 and look for a retest of these recent highs, target 108.25.

david4

And, finally, for my current favourite. I blogged on markettutors.com earlier this week of the double top and bottom on Arabica (based upon July 14 futures).

I am now rather buoyed up and ready to look for a topside break; I admit this is a big picture call but my target over the next few months is 250-260 cents.

I am led to believe that the draught has had some current relief with a fair amount of precipitation; however the damage is done.

The chart shows clearly the channel bounded by double tops and bottoms with an obvious stop on the downside on a close below 168.

I do not normally put this sort of stuff ‘out there’ but it might be fun to watch!

david5

Arabica Daily

A measured move on a topside break could take us to 250+, and furthermore, the fundamentals support it!

The S & P bounced off the very low 1800s and missed my first profit target; we now have healthy short covering and trade only 10 points below my trailing stop on my short position; while that may close me down in profit I really prefer the short side and if stopped I am likely to resell next week.

I intend to have a peaceful Easter break (one break worth taking!). I am neither hot nor cross; my exposure is sorted and I am not chasing trades that may induce stress, my temperature to rise, nor my temperament to be tested.

May I trust you do the same; have a happy Easter!

 

Author: David Horton is a partner in Market Tutors Ltd in the city (markettutors.com). He has had a significant career in financial markets; he is a trader and trainer with a passion for coaching and mentoring with a good dose of humour.

davidhorton@markettutors.com

 

 

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Pale Blue Chips – VectorVest update by Dr David Paul

In both SA and the United Kingdom I have been very impressed with the Unisearch (in the conservative folder) called Pale Blue Chips.

It does not shoot the lights out, but the search finds great shares that are growing earnings safely, paying a dividend and growing that dividend.
Since the start of the year the search is showing a 5% gain whilst the London market is up only 1.3%.

In this, no dividends have been included and market timing has been ignored.
At present in the London Stock Market, there are 42 shares that fulfill the Pale Blue Chips set of criteria.

Read more blogs by Dr David Paul

For conservative types like me, the search is ideal for finding a fundamentally strong set of shares to further apply the Midas Touch technique.

Let’s go through the steps as I presented last week.

  1. Market timing comes first, always. The long term trend of the LSE is UP today, but the Primary wave is Down. In terms of market timing, I would like to ideally wait for the Primary Wave to turn UP and a flash of green from the Color Guard. That said, let’s proceed.
  2. Select Unisearch and run the Pale Blue Chips. I am getting more conservative by the day. I hate spending capital but am fond of a party. That’s what the dividends are for :)) I think that in this present market the benefits of safe undervalued shares are obvious.
  3. Chart the shares in the list and simply apply the Midas Touch technique. The technique finds shares that are technically in a strong uptrend. The trend and trend momentum are measured over a long cycle period and resemble a 40 ton truck that’s speeding up. They take a lot of stopping.
  4. From the 42 shares in the Pale Blue chips list try and find 8-10 shares that are spread across the market with no more than 2 shares in any industry.

Let’s have a go. In less than 5 minutes I have found 10 shares out of the 42 that are Pale Blue Chips and are trending like a 40 ton truck.

I am sure the combination for conservative investors will be unbeatable.
In the video accompanying this, I will quickly talk you all through the steps.

David Paul April 11 2014

Read more blogs by Dr David Paul

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I would bend over backwards to be flexible!

david1It’s been an interesting week. And one that sends a strong message to all traders, but moreso to those in the retail sector who are trying to understand ‘what’s what’!
Certainly one to teach the great lesson of flexibility. Not a week to be married to a trade, or even a perceived trend, it would seem.
I guess, like marriage, keeping the focus and the faith is what keeps the romance alive!

 

          ‘Looks a little different from here!’

 
A professional trader friend (no names here!) was firmly committed earlier in the week to a bullish view in USDJPY. At 103.80! Romance was in the air! However, no sooner had he held hands and indulged in a quick ‘testing’ peck on the cheek, the tongue was at the ready and an impertinent hand was on the thigh. The slap came quickly and he took it like a man.

 
It was not a good week. Flowers were sent as an apology for misreading the signs. I await the news to see if they were enough? Perhaps chocolates, as well? After all, it wasn’t as if he was up for a one night stand: he was (almost) in love and ready for the ‘real deal’.

 
I should, though, own up to the truth and admit that he’s a somewhat serial dater – I gave it one week at best!

 
But what happened to cause such rejection?

 
Text messages suggested ‘BOJ, FOMC, ECB. OMG’

 
First it would seem that Kuroda (of the BOJ) acting like a cautious father, declared, at the close of the two-day monthly pow-wow, that there would be no policy changes. No mention of ‘home before midnight’ though.
The synopsis was essentially:

 
•    No need for change as the economy is in steady recovery
•    This being the case no need for further easing measures at the moment
•    Corporate confidence is growing but cautious.

 
The market in many sectors, although especially the speculative market, has been long USD expecting further news to weaken the Yen; it will happen in due course undoubtedly.

 
However you may recall my credo for considering market positioning before jumping in – what position has the market got?

 
Next up, to dampen the remaining libido of my trading pal, was the dovish FOMC report.

 
And, in between these (as if the smart money was expecting the Fed’s comments), the market had started to sell the bejesus out of Nikkei futures with the ensuing fall in USDJPY albeit with reported very large two-way volumes going through.

 
Real money sellers were the key: when real money comes out, the speccies follow…and so it did. 103 gave way and even my professional contacts were starting to wonder why…has anything changed? Strong mooted support at 102.60 gave way, and the break lower let further waters flow.

 
As I am writing this we are toying with the 101.60-70 level, currently seeing some support (but tellingly, it is not bouncing at all); the bigger level is 101.20.

 
So here we are. 104 down to 101.65 in less than a week! We are at precarious levels in both the Nikkei and the USDJPY as you will see from the daily charts.

 
Of course the technical guys amongst you will have no truck with the rationale and trade what the charts say.

 
The long term daily supports speak for themselves; there will be those who will see this opportunity to buy with equally obvious stop loss levels on a clear break of the trend lines.

 
Others may choose to wait and follow a break and go short.
Either way, flexibility is the key.

 
david2 david 3

Now for a brief follow-up of recent trade suggestions.

 
I have reverted to the coffee trade where the Arabica futures have seen prices buoyed back up to $200 or so; I am going to watch and see whether we make a new high and maybe sell a failure. We may be looking to set up a double top (or have we seen a double bottom?).

david4

Tops and Bottoms? Anyone?

 
Now for the Euro! The daily chart shows the close above the channel.

david5

EURUSD has just closed overnight above the channel however I am not a convinced euro bull and will watch to see if we can maintain momentum. I expect verbal rhetoric from the ECB to ‘talk it down’.

 
The S&P continues to tease me. Top-picking is a frustrating game!
I believe that in one of my recent ‘blurts’ in the last three weeks I mentioned my target for US Oil being 104-105? And I got stopped (in profit) on my long when I used a trailing stop….well today we are trading at 103.70 after a high minutes ago at 103.85.

 
Life’s a $%^$£!!!

 
Meanwhile, I am providing a shoulder to the wounded: the life of a lothario is not an easy one. He’s rather bloodied and bruised. Alas the path of true love does not always run smoothly.

 
He will be back for more, though perhaps he should try dating girls next time.

 

David Horton 75Author: David Horton is a partner in Market Tutors Ltd in the city (markettutors.com). He has had a significant career in financial markets; he is a trader and trainer with a passion for coaching and mentoring with a good dose of humour.
davidhorton@markettutors.com

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FTSE at pivot point

Steve Ruffley 75With no surprises from the B0E of an unchanged base interest rate and holding steady at £375bn of asset re purchase, we find the FTSE at a real key pivot point. On the daily charts we have hit 6687.15 witch is a key point of attraction and the 50% Fibonacci level for the bulls to push on to new highs. We seems to have stalled here and I see that if we can’t sustain the bullish momentum I can finally see these dizzy highs in the indices start to retreat.

 

The FTSE historically has had some sort of over correction or ‘crash’ every 6 years. We are coming to that mark. With the FED tapering filtering through the global markets and the fact that rates in the UK will rise, in the short term I see 6583.31 as a target, then 6404.75, but medium term I see the FTSE getting to the lows at 6114.72

 

Steve Ruffley CEO Tradermaker.com

steve

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Cable could hit 1.70 this year…

Kevin Burton 75The GBP/USD pair has seen the pound strengthen in the past few days with it challenging the 1.68 figure once more. I have long held the belief that we should see cable hitting 1.70 at some point this year and it’s possible it may be gearing up for a move to that level.

 

The chart below shows the daily timeframe with a channel I’ve put on. Should cable break the highs, the logical next level for price to head towards would be the upper channel line which currently coincides with that 1.70 figure.

 

Markets rarely make our jobs easy and the fact we are seeing cable at 1.68 means it could just as easily be rejected here, but I am always mindful that unless we see the lower trend-line broken, that upside channel line will act like a magnet to price.

cable

Should indeed that lower trend-line be broken, measure the depth of the channel and that could give an eventual projected downside target. Until proven otherwise, watch to see if cable breaks higher.

Read more from Charlie Burton.

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The Russell 2000 trade update

Bo Yoder 75 wideThe Russell 2000 trade is now down approximately 7% since the trade began, and has behaved itself every step of the way.  Each price wave had plenty of power and therefore was predictable as you saw.

Now, I am seeing the bearish power begin to fail, and that loss of energy leads me to believe that the “easy money” is out of this index, and it is time to move on.  I would look for excuses to close out the position and plan to be done with it by the time I sit down to write next week’s column.

RUT 4-10

Now that the Russell trade is nearing it’s end, I am looking for new opportunities and have discovered a pullback trade in the making in the stock of Johnson & Johnson (NYSE:JNJ).

This stock has been booming higher after a tough sell-off, and has finally found resistance as it challenges the $100 per share level.

JNJ 4-10

I think the bullish run has found it’s end, and now the stock will be pulling back into the zone of support drawn out in green on the chart above.  As I mentioned in the last column, when a market “jitters” there can be the opportunity to buy and sell the same shares over and over again, and I plan to do that here in JNJ.

As the green zone is tested, I will take in some shares, and flip them for a profit in the $96-97 area. Let’s see how many times this opportunity presents itself!

If you would like to learn more about my trading style, we have just released a book/video training package that will help you better understand how my “3D Apex”  trading strategy works.

Check it out here: http://3dapextrading.info/lpt-book.html

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USD/JPY pair remain bullish

Kevin Burton 75The USD/JPY pair has had a solid run from just below 102 to just over 104 in the past week. The break above the early March highs is a good sign for yet further strength. The chart shows how price pushed through the 50dma (black line) on its way to these highs made this week.

Unless price falls back below that 50dma, we have to assume the trend remains up. So does a trader simply buy at this point? Not a great risk to reward scenario that one!

jpy

The best way to view this pair is to look for a pullback to a zone when buyers may come back into the market. There’s a cluster of support around the 103 price area which if price did pull back, could be where it halts. If this scenario were to play out, look for that support zone to stop the descent and price to start moving higher off it.

Most traders will have their own buy entry criteria, but for now, this pair remains bullish until proven otherwise.

Charlie Burton
EzeeTrader

Check out Charlie´s latest webinar here

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Frying by the heat of my pans…or, if you want to make an omelette –start with eggs!

David Horton 75‘What is in this fellows head?’ I hear you wonder…

I have only recently had a problem with weight. Carrying a little too much around when it’s not in your wallet is a chore.

I regularly attempt to gym ‘n swim; however, while the body is willing, the fondness for a curry and a decent draught of something worth drinking is engrained in my psyche and I am led by my inner satnav to a favourite haunt.

I write this as last night’s visit is fresh in my mind: it was a long day in the office and ‘duty’ called. I will refrain from listing the mouth-watering delights for fear of you will all disappear, leaving me to my own musings while you go in search! after all Brick Lane is merely yards from the City.

beer

Evidence of over-indulgence!

I shouldn’t boast, but I am no slouch in the kitchen myself. I am wok-ed up, the spice cabinet is pungent and brimming and I assure you that I know my onions!

I am a creative cook and, while I have a store of recipe books from the world’s renowned chefs and cookie monsters, I rarely follow a recipe: a handful of this, a ladle of that, a soupcon here, a few drops there and finish with the flourish of the wrist and a sprinkling from the herb garden. Yes, in the kitchen I am a happy chappy.

If you don’t already, I urge you to get stuck in and feed your soul and sate your appetite. Being creative and carefree is good…but don’t take that attitude back to your laptop!

The sad thing is, I know people who trade this way – and it is not a good look, nor is it going to feed your account.

The secret to understanding how to trade, from a retail perspective, is to start with a recipe – and follow it!

To adopt a laissez-faire attitude and ‘just have a go’ because you ‘think’ something may happen is merely asking for trouble. I have met and mentored many would-be traders who would seem to do more ‘thinking’ than Einstein.

‘Why have you taken that position’, I ask.

‘I think it will go up/down’ is the common retort.

‘Ok, why do you think that?’

‘Because. Because I am good at predicting things.’

‘?! This is the forex market with several trillion USD of turnover per day; it has flows from the world’s central banks, hedge funds, banks of all sizes, global corporations. They are all trading. And then you have a range of funds, and algorithm HFT traders; oh yes, and there are a good few million retail traders as well. And then there is you. And you ‘think’?……’

I sigh. In fact, I privately weep. I weep for all the souls out there who ‘think’ when they should be in the kitchen, making an omelette – starting with eggs.

It goes on.

‘So what position do you think the market wants to take?

‘What position has the market got? What data and commentators are you looking to today that might affect the market and positioning?

I pose these questions daily to everyone; they are the meat and drink of any trader worth his or her salt.

‘I don’t know what you mean’ I hear back.

‘I just think ‘it’ will go up (or down)’ they continue.

 

Please get a recipe. Establish a plan. With ingredients.

What you want to achieve, how you are planning to do it?

What you might trade, what is your strategy, how will you start, enter, exit? Do you understand risk management? And it goes on.

Don’t just think. Please.

I have a meeting shortly with a client whom I have been mentoring. She does think. She thinks I am overweight.

I will start another diet tomorrow. I think.

chimps

Market Tutors Boardroom: A thinking session

However, before I do, we must recap on some of my recent recommendation/suggestions:

The equity markets are strong albeit in consolidation ranges: top-pickers like me should retire to the pavilion for a good rest.

As I prepare this the S&P is trading at the top of an approximately 60 point range for the last six weeks. Merely a dozen points above my sell recommendation a month ago, I am still short with a stop at 1917.

The EURUSD remains in consolidation and my short trade was increased; I am not holding out for a major move at the moment but certainly prefer trading the short side within the down channel; I will stop on a break.

david chart

The EURAUD didn’t follow through (similar consolidation) and I refrained from involvement.

EURCHF has traded quietly in a 50 pip range for the last week and am a happy holder.

The Nymex Oil long looked strong and at one stage was almost $3 in profit and I was taken out with $1.60 profit on a trailing stop when the price slipped in the early part of this week.

I never did get the chance to look at reinstating an interest in Arabica as the price settled and has traded in a narrow band.

Nothing is jumping out at me so I will watch and wait.

 

Author: David Horton is a partner in Market Tutors Ltd in the city (markettutors.com). He has had a significant career in financial markets; he is a trader and trainer with a passion for coaching and mentoring with a good dose of humour.

davidhorton@markettutors.com

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FTSE’s outlook conservatively bullish

Alpesh 75The last time we discussed the FTSE 100 it was trading just above the 6,500 points area, a level that had been confirmed as a medium-term support. I said that the key resistance area seemed to be around the 6,650 level and a break above this should be followed by more gains towards the 6,700 and 6,800 points levels.

Since then the UK benchmark index has been on a moderate uptrend that led it above the 6,650 threshold but what this uptrend lacks is momentum and follow through and that’s the reason why the FTSE is still hovering around the 6,680 area.

This should be attributed to the latest string of mixed data coming from the UK and abroad. The general economic climate during this week was mixed: on the one hand we had the discouraging Euro-zone inflation report that missed the mark. On the other hand German Retail Sales picked up and unemployment dropped. At the same time the important Services’ PMI reports showed that the sector is dealing with sluggish growth in the UK and Europe in general.

The way the FTSE reacted to these reports leads me to believe that investors and traders have been holding back from committing into any serious trades on the main UK index this week. I believe what they’re waiting for is Friday’s US jobs report to either support the current uptrend or cancel it altogether.

Last month the labor market data printed in a positive fashion for the US economy and there’s potential for another steady printing for the report this month as well, although there are hints that a surprise to the downside is also possible. For example, the US Non-Manufacturing ISM index printed lower than expected, this is the index that monitors how the non-manufacturing sectors, hence mainly the Services sector, are fairing. Given that the US is primarily a services-based economy this piece of data is alarming.

To sum up, my view over FTSE’s outlook for the next week is largely correlated to the US jobs report, if the data print positive or even at a steady manner then I see no reason for the FTSE not to pick up momentum and look for higher levels. However, if the jobs report shows weakness in the labor market  during the past month then I am confident that the FTSE will revisit the 6,500 points lows.

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alpesh chart 3 april

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