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Market Commentary

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How To Play A Bear Put Spread On Bearish Gap Down

GlaxoSmithKline gapped down on earnings on July 23, 2014 breaking below $51.00 demand level.* 

Key Levels

Because of the gap, GSK now has overhead supply at $51.00 and potential demand at $48.00.  I will use the demand level as target one.

TroyJuly30.jpg

Trade Setup

I will look to take a short position with options if the stock trades below the gap down low at $50.01.  I will look to use a Bear Put Spread to capitalize on this trade.

Option Trade

Since I know the stock is broken on the gap down side I wil...

Jul 30, 2014
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November Soybean Futures: Trading Idea July 30, 2014

Consider Buying a Call Option on November Soybean Futures

 See on the daily bar chart for November soybean futures that prices took a beating in late June and early July. Recent price action has been choppier and hints of a market bottom being in place. See, too, at the bottom of the chart that the Moving Average Convergence Divergence indicator has just recently produced a bullish line crossover signal, whereby the thick blue MACD line crossed above the thin red “trigger” line. Also, the mo...

Jul 30, 2014
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Psychology: 5 Trading Personalities - The Warrior

Last week I discussed how one’s personality has a substantial influence on investor/trader behavior. In fact, one often hears the advice to “trade according to one’s personality,” but most models used by psychologists for defining personality are designed for the corporate world, to help management identify leaders and team players.

These standard models provide very little useful information to those who are active in the financial markets, because leadership skills and the ability to play w...

Jul 30, 2014
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Gold Forms Wedge Into Fed, Jobs Data

Precious metals traders have much to digest this week before July ends and we enter into August on Friday. Significant earnings releases, a heavy slate of economic releases highlighted by the monthly jobs non-farm payroll number released on Friday, and major political turmoil in North Africa, the Middle East, and Eastern Europe that has dominated headlines. 

FOMC Meeting Concludes Wednesday

Oh, and let’s not forget, the FOMC meeting that ends on Wednesday with a policy statement and post meet...

Jul 30, 2014
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U.S. Bonds, U.S. Dollar, and Largest Cap Stocks Gaining Strength, Industrial Stocks Losing Strength

Bond, iShares Barclays 20+ Year U.S. Treasury ETF absolute price rose above its highs of the previous 14 months on 7/29/14, thereby reconfirming its preexisting bullish trend.

U.S. dollar ETF absolute price rose above its highs of the previous 5 months on 7/29/14. UUP is currently systematically neutral, but the 50-day SMA is rising up toward the 200-day SMA, such that a bullish crossover may be possible in weeks ahead if price rises further.

The Largest Cap S&P 100/S&P 500 Relative Stren...

Jul 30, 2014
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Featured Stories

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What Could The End Of QE Mean For Markets?

The end of quantitative easing in the next few months, could lead to a drop in asset prices followed by yet another QE round, more debt and a further devaluation of paper currencies.

The QE economy —which started in 2009 and has continued through 2014 — saw the banks buying stocks, bonds, and real estate, while loaning money to Wall Street, which sparked an asset bubble. That economy is coming to a halt.

The crisis in Ukraine, pro-Russian rebels in Ukraine shooting down a passenger airliner a...

Jul 29, 2014
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Strange Times: The Unprecedented Bull Market

The S&P 500 is on pace to triple its March 2009 low of 676.53 in 2014, leaving many wondering what is driving such an unprecedented bull market.  Indeed, a widely respected figure at a major financial news network said to me earlier this month, “Even in the media, we’re left scratching our heads by a lot of what we’re witnessing right now.”  

On Thursday the SPX touched an intraday peak of 1991.39 to close at yet another new all-time high of 1987.98.  The 10-year Treasury yield had closed th...

Jul 25, 2014
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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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