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Market Commentary

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A Lesson In Short Gamma: Herbalife (HLF)

I typically do not have trades on that are net short options so the subject does not come up often but there are certainly lessons to be learned.   I am talking about everyone's favorite stock to trade, Herbalife .  

Bill Ackman had said late last week that he was going to present a webinar that would definitively prove his case that HLF was indeed a pyramid scheme and would effectively go to zero at some point in time in the future.  The market believed him and the stock plummeted from the $...

Jul 25, 2014
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Listening To Markets

As I was away on vacation last week I still kept one eye on the markets and with my technological devices at hand was able to get a modest tone on things from day to day.  As we are still mired in low volatility the frustration continues to mount - will the market ever correct?  Perhaps that is the wrong question and why so many are missing out on enormous opportunity.  Believe me, these chances will NOT be around forever.  But many are just observing and creating their own high levels of ang...

Jul 25, 2014
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A Ways to Go Before Going Bust

I went out for about 15 minutes to reset the timer on my front garden. When I returned, the market had taken a precipitous dip, some 55 points on the Dow and six points on the S&P. What happened while I was away?  

  • U.S. stocks fall, after the Standard & Poor’s 500 Index extended a record, as earnings at Amazon.com and Visa missed estimates and durable goods data fueled concern that corporate investment remains stop-and-go.

Is that a new fear I see on the horizon – “corporate investment remai...

Jul 25, 2014
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September Swiss Franc Futures: Trading Idea July 25, 2014

September Swiss Franc Futures a Selling Opportunity on More Price Weakness

 See on the daily bar chart for the September Swiss franc futures that prices are in a downtrend and have just hit a five-month low. The bears have downside technical momentum. A move in prices below chart support at Friday’s low of 1.1054 would become a selling opportunity. The downside price objective would be 1.0875, or below. Technical resistance, for which to place a protective buy stop just above, is located at 1...

Jul 25, 2014
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Emerging Markets Stocks Gaining Strength, Oil and Metals Pull Back

iShares MSCI BRIC Fund Relative Strength Ratio rose to its highest level in nearly 6 months on 7/24/14. BKF/SPY currently remains systematically neutral, but the 50-day SMA is now rising up toward the falling 200-day SMA, such that a bullish crossover is possible in days ahead.

Emerging Markets Stocks ETF Relative Strength Ratio rose to its highest level in nearly 8 weeks on 7/24/14. EEM /SPY currently remains systematically neutral, but the 50-day SMA is now rising up toward the falling ...

Jul 25, 2014
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Featured Stories

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Top 10 Free Trading Resources

The following is a list of my top 10 favorite free resources on the web for investors and traders. None of these websites involve any cost, though some do offer the possibility to upgrade to a pay service. We did not include TraderPlanet, since you are already here.

1.www.TopStepTrader.com If you are intraday trader that is tempted to have CNBC on during your trading day here is an entertaining alternative. "Eddie the Broadcaster" will keep you informed with a solid mix of market news, specia...

Jul 23, 2014
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Forex Tips: When Trading Discipline Goes Too Far

“Stick to your trading plan” is what we hear said all the time and I’ve been known to say it too.  Although that may be the best thing to do, if your trading plan is ok, there’s the odd time that crops up that makes you question it.

Being a dedicated forex trader I’ve done some serious screen time.  Eyes locked furiously on the charts waiting for my setups, mesmerized by the ebb and flow of the markets.

While going about my normal trading day, there have been several instances where the radical...

Jul 22, 2014
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Rehypothecation, Has The Goose Stopped Laying “Gold”en Eggs?

The practice of rehypothecation is centuries old. It has been used to create “free” money supply and in recent times the Chinese have become rather fond of commodity funding deals in an attempt to leverage deals and grow their economy.

The model works, at least in theory, and while all is well one can extend the daisy chain, seemingly for ever…

The universe provides infinitely after all, doesn’t it? This is basic pop quantum physics. The difficulty arises in the very moment a link weakens an...

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Technical Analysis: Using Multiple Timeframes

The objective of any trading strategy is to identify trading entries with a high positive predictive value: i.e. the sensitivity and specificity of the order are likely to be successful close to 90% of the time.

Getting Started

In order to achieve this —the market must be defined or broken down into two separate energies: 1) price action or market structure and 2) indicator analysis. Both parameters provide separate information that must be integrated in order to evaluate the predictive value...

Jul 17, 2014
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India’s Impure Gold, Short Squeeze To $5,000

The India Times recently reported that the Reserve Bank of India is planning to ship impure gold to the Bank of England to swap it for pure gold that can be traded as London pure bars.

If the objective is to exchange impure for pure bars that is very easily done. Any major refiner would be happy to smelt the gold, test it for impurities, remove the impurities, and then recast the gold at the purity India desires. The gold could then be shipped back to India, instead of being stored at the Ban...

Jul 14, 2014
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