The Yen & S&P Futures are really a simple gauge for market timing. They can tell us when to be risk on or risk off based on the correlation.
We take a look at a short video as to why, at the current time, the Yen futures are saying that they may be in for a rally higher which means to be risk off on stocks/equities.
Yen Futures Ticker: /6J
Not sure what yen Futures are? Read this free tutorial we made on them here.
You can sign up for the Trading 101 Class in Scottsdale this weekend by calling the office at 1-855-800-1875 or clicking here.
I've been traveling a lot the month of October for the school, Vancouver & LA, witch one would think makes it tough to trade. Futures? Yes, it makes it a bit harder but for options and stocks being away from the screen helps, at least me.
On Sunday's we make it a habit to do chart outlooks and look for the best deals/trades of the week. We narrow it down to the 'best of breed' ideas and look to execute on those, aka having a trading plan. This is not something that needs to be done everyday (who really wants to do that) or something where you're sitting at the computer for 5 hours daily.
This week we came in with a few key ideas:
We do this as a group for the LMT (Live Market Training) so that as a new trader you can get in the groove and see from the instructor how and what to look at for the best possible trades for the week ahead. This helps because you can focus on the rest of your life and execute the trades when you get the alert.
Today the markets rewarded the community for their hard work with over +$10,000 + in combined student gains.
The real winners were: TSLA, NVDA, (Yen Long/Futures) and CMG. Three ideas, if executed with the correct size and exit, could make your entire trading week if not month.
So the idea? Trade less, profit more.
I hope this helps.
If you would like to learn more about the Core Foundations of Trading Program and the LMT you can schedule a call here.
It's time for some inspiration as we look at a student profile and his journey thus far trading in the futures markets.
He's a Canadian student who began about one year ago knowing nothing about the world of trading. No courses, books or even what candle sticks were. He had some experience in real estate investing and worked in administration for a contractor in Vancouver. Ironically, he heard about Landshark from another employee who had been talking about it and decided to come to a Trading 101 Class in Vancouver to see what it was about.
As we've approached a year in he began trading live just a few months ago and is now between projects with his firm which has given him time to begin trading more. From speaking with him I can say there are three things that made it click for him with futures:
1. Understanding the importance of Monthly candles (Macro view)
2. Being focused and in front of the computer
3. Being selective with trades
Now with number one I can saw that most futures traders lack this - You end up shorting for ten cents when you should be looking only at long trades because the pressure from the larger time frame is saying so. It's really simple but most just forget to check the larger time frame direction. If you don't know how to do this or why this matters then you'll surely struggle. Secondly, he's not scalping in and out all day for 10 cent moves. When I had first started training others in 2013 9/10 of them were trading for $50 moves and $100 stops which is a recipe for disaster. The truth is, you need money to make money doing this and if a $100-$300 loss is going to set you off then you're likely under capitalized. This is one of the reason many educational companies send people to Forex; You can start with almost nothing ($100 accounts) but you're also going to make close to nothing.
I've seen his progression as he flew down to Scottsdale earlier this year for the Traders Summit and I've spent a lot of time recently in Vancouver. I would say (and you can ask him, we'll have him on the podcast if he agrees), that talking through the issues helps. You know, why do we care more about the larger trades? Why do we tend to be selective?
Today speaking with him in chat he told me he was up $1,800 and change on a Crude oil short using a 4 lot strategy with max risk of $1,000. So let's break that down for you absolute beginners.
4 Contracts of Crude oil requires $1,000 margin hold per contract for a total of $4,000.
He set is stop to 25 ticks ($250) per contract for a total risk of $1,000.
Total Gain: +$1,840
He then scaled out of the trade at various targets. This is important, we teach this in the E-Mini Futures Program. It matters and it will save you from being greedy.
This is his chart below with notes. If it looks like another language to you, no worries, it should. That's why we focus on learning how to use price action and read it so we understand it.
So ideally, before the trade, you want to set targets, usually three. This let's you set the risk for the trade head of time so you know where you risk is (His was $1,000) then profit targets. You won't change your plan as you're in the trade and you have a defined plan, not just pushing buttons and being erratic.
For this week, he is over $2,500 in gains and last week was at $2,100 in gains on a $20,000 account. This translates to 20% in two weeks using minimal risk.
And I get it, when you're new to this world it seems like BS, fake, not real. Why? Because most of us are used to handing our money over to financial advisors and checking the statements a few times a year. As long as we don't lose money and make a few percent we're usually happy. But you have to ask yourself, is it time to start taking control of your money and learning alternative ways to make it grow?
I hope this post inspires some of you and hopefully we'll get him on the podcast here soon.
Dan Bustamante, Instructor
We started earnings season last week with Netflix and continue this week with big names. Bryan Agosto who is a staff member in the Scottsdale office started it off right this week with a $1,700 trade on STX which traded higher today on their earnings report.
Here is the breakdown of the trade:
5 Calls purchased at $1.70 (each call is really $170)
Total Cost: $850
Sell Price: $6.00-$7.00 per strike
This is textbook risk reward here. You will not find this in Forex, Futures or stocks, though we do like to trade them. Earning season usually provides these types of set ups for these risk/reward plays and even with 1 call contract at a cost of $1.70 ($170) your risk is capped. The most you could lose is $170.
I discussed this concept on the radio show last week with Jason and I'll go into more detail about it this week. If you want to learn the basics you can attend a beginners webinar this Wednesday afternoon at 4pm EST.
Click here to sign up.
The charts lead the way. This Sunday in our group charting and market outlook session with Core Foundations of Trading students we really found only 3 ideas for this trading week that were worth while.
One of them was NVDA. Click below, that was the number 1 idea for the week. Why? Because the price chart had a signal. Then, news came out today and we have sold off from $194.
Now to the novice good news means time to buy right? Wrong. The price chart usually leads the news and when it releases professionals usually sell or take profits. One of our staff members, Bryan Agosto took this trade. He took about $2,000 in profits using calls.
The trade was planned, structured (with the right strikes and targets and taken.
Thursday night we're hosting a webcast on how to begin investing & trading.
You can register here.
The main points?
1. Plan your trade ahead of time, targets included.
2. This is NOT day trading. Period, this took 2 days.
3. Less is more: You don't need a daily watchlist. If you have 2-3 ideas for the week and execute on them correctly then your week is done.
I hope this helps and we'll see you at the Beginner Investor webcast this Thursday.
So today after the radio show I spoke with the host Jason about trading & real estate and it hit me that most people tend to do too much. Whether it's trading or anything else in their lives we tend to chase far too much at one time.
With the world of investing chasing 5 rabbits (five trades/strategies) and not focusing on one usually causes losses. It's amazing to me being on this side (educational) of the business the last three years of the stories I hear from students. "It's taken me 6 years to be profitable" or "I've been doing this for 6 years and still cannot get it". Why? Is it because of the strategy or lack of focus? Sure this is a hard hitting question but I've been on a kick of perspective after reading Dalios latest book, Principles (read it if you have yet to).
When people say that you can usually boil it down to one thing: They never focus on learning how to be great at one market or one strategy. They jump from indicator to indicator or research some new strategy instead of just actually sitting at the screen and doing what? Trading. When I first started in this business I worked as a trader for a private shop. My duties were simple: I traded E-Mini, Russell and Crude. That's it. I never cared about what Blackberry was doing with partnerships or what the fed was doing with their balance sheet or whether or not the TTMSDS Squeeze was saying. I traded price.
The charts are what matters. Period. Price on the chart is very direct, it tells you where the market is headed, or in the case of oil up until today, not headed (sideways). I have a few friends still that trade institutionally, one for Millenium Management. All he trades is WTI Crude for his desk, that's it. Day in and day out, crude oil, crude oil and you guessed it crude oil. Retail traders, for whatever reason, chase too much and tend to rarely focus on one thing.
I'll pose this question to you: What does it matter what earnings are for Apple if the price chart tells you what to do? The answer is that it doesn't. It's one thing to want to learn to be knowledgeable but it's another thing to sit down and ask yourself one thing: Are you in this to make money or are you in this to know it all?
I hope this helps.
Joel Greenberg, Instructor: Advanced Options & Income Options
Most people need money and most of us get it through our work. Whether you are just out of school, mid-career, or around retirement you will continue to need money to live and to enjoy life. Most of us would like to get ahead of our expenses and save for the future with bank accounts, IRAs, 401Ks, and CDs. Recall 2008. That put an end to banks paying interest so most of us turned to the markets and “Financial Advisors” who invested our money for us. These advisors were paid handsomely by us even when our account sizes were getting smaller and smaller. Individuals and many 401Ks also suffered from the same problem. When you think about a market you have to always remember that there are two sides to every trade and you need to understand both sides, yours and the “other side” of your positions. The bottom line is this: If you are losing money; someone else is making it! I got tired of paying professional financial advisors to lose my money. Mine clearly did not understand how the markets worked so I fired them and used the money I saved in fees to take classes, learn to trade and manage my own investments. I need my money to work for me and GROW. No one cares more about my goals than I do so I’m the best person for the job. For example, two of my positions hit their predefined 50% profit targets this morning on the open. These option PUTS were sold for $860.00 each and I bought them back this morning for $430.00 each to close both positions. The net result was $430.00 X 2 = $860.00.
That’s just one example of my trading methodology. To see exactly what I do, when I do it and why it’s done, join me on October 28, 2017 in our Income Generation and Wealth Building Class. If you have any question please email me at email@example.com.
Daniel Bustamante, Instructor CFOT
We are now in 223 days without a 3% or more correction in the S&P making it the longest market streak since 1995. This will never last and there are a few things I want to discuss trade-wise in regards to this.
We rely on numbers as investors; Whether it's real estate or financial markets. Usually the "I have a gut feel' style of investing never works out, regardless of what you may tell yourself. In fact, this weekend I just finished Ray Dalio's book, Principles. I had read something similar to this before from him when I was in college and the main take away for me was to always question your perspective. For us as traders, the perspective we take is that of price charts. What are they telling us? Then from there we can add on light fundamentals and then current market sentiment.
As of right now the market sentiment is sketchy at best, but again this is perspective. North Korea tensions are high and the statements from them this morning helped this market to sell off. However, the price charts, without this news, already told us to be short or risk-off in the markets. That being said let's take a look at a few key charts.
Notes: The Yen is usually a great market indicator. It is inverse what the S&P 500 says and right now the chart tells us that this is setting up to be a bullish move higher which is bad for stocks. In my opinion, we could easily see $92.00-$92.50 on this shortly.
Notes: The interesting thing here is that this index made an all-time high today while Nasdaq and S&P futures sold off. From a traders perspective this is 'lagging' which means it should soon follow it's counterparts. As a retail investor or someone new to investing looking at this chart below you may ask yourself; "Why would I bet against this" - Well the best investments are usually counter to what the market is doing (Think BAC stock in 2009 or housing during the crash). I'm already short this using options.
WTI Crude Oil
While I believe oil trades back into the $70's within the next 6-9 months, the short-term chart tells us that a move lower is in the cards. As we approach EIA on Wednesday we're going to look for the $52.00-$52.25 area to be an opportunity to sell.
That's going to do it for this weeks outlook. Don't forget to tune in to the radio shows this week.
The Financial Review: Tuesday at 4:20 pm MST
After The Closing Bell: Thursday at 2:30 pm MST
You can stream them live online by clicking here
2017 has surely moved by quickly and now that we head into the final quarter of the year the question that many investors should be asking is....
Well, there's problem a lot of them, right? But the one that comes to mind is "Will this market turn over?" Obviously we've been in an incredible run since last November but with tensions again rising with North Korea and the debt ceiling they could be the 'headlines' that we need to get his market to come down a bit.
Non-Farm Payrolls last Friday were essentially a non-factor. This Tuesday and Wednesday we have some data that could be relevant but really, as always, we want to rely on the story the price charts are telling us.
Overall market sentiment right now is "mixed" considering we rallied after the North Korea rally test last week and then again last night. However, to see this going much higher without a pullback is something to consider.
Let's dive into a few key charts for this week.
We sold off last week and instantly found support at $5780 with a subsequent rally to $6019. This rally was pretty much uncontested by the bears and we believe overhead resistance is near: $6100-$6130/40, regardless, it's close. What we could end up seeing is a blow-off top here met with a strong reversal. $5900-$5860 is support but the long-side trade here on Nasdaq or equities does not look that appetizing.
Last week during the rallies the stock had a tough time 'getting it going', even with the news of the new iPhone. Will it be a great phone? Probably, they never seem to disappoint and what better way to improve your selfie game with a new, updated iPhone camera? We all know price is what matters here and price is telling us to pump the brakes. $166-$168 could be a reversal on this stock. If we break $162 then it could really get ugly, think $150.
The notorious metal, gold. You know, the one that everyone on financial radio and TV tells you to stock up on in case things hit the fan. Because, you know, in times of crisis the thing I really want to own are gold bars and coins. On a serious note, we did rally on the name last week and got close to T2 (target 2 - here is last weeks chart) - $1350-$1360 here looks like resistance, which, is a strange signal considering that Nasdaq looks to be a short soon. So that being said, a pullback before a long entry is a possibility.
WTI Crude Oil:
This market is a favorite for Landshark Futures traders. It moves $1-$2 a week and it tends to have some great action. This week the chart is a bit mixed. $47.50-$48 is a very important large time frame price area. Above that $50-$50.50 should be a breeze to get to but the part is, we need to get above that. Below that a re test of the rally from last week at $46 is viable. So that being said it could be a sideways week on this commodity.
So there we have it. When the markets tend to look 'good' it's always an important reminder to look both ways before crossing the street and at this intersection we're currently at the sign says caution.
Enjoy the trading week and be on the look out for the radio show recordings that will be uploaded here beginning this week.
The month of August has been generally slow with sideways market action and headline news concerning the current Presidential office and key members leaving. The rally that we've had since the November 2016 elections has been of epic proportions and mainly built on the idea that the President was going to have key reform in the way of banking and taxes which has proven to be tough.
As with every first Friday we have NFP (Non-Farm Payrolls) data that traders rely heavily on for market sentiments. Usually this can begin to cause portfolio shifts and volatility and with the market at current highs and sideways it is, in my opinion, looking for any reason to sell off a few points.
Let's dive into a few key charts & data below starting with the Friday economic calendar.
The indices have been very sideways. The path of least resistance at this point is lower but it won't be easy. Key support levels lay just below.
S&P E-Mini Futures:
$2450-$2460 looks to be key resistance as we've tested the area three times and found sellers. A break of $2420 is key to get a flush lower and unlike the Nasdaq support is a bit lower and could be a smoother trade.
The weekly chart looks great. Short term resistance is at $1305-$1320 but bids above that should be free to run all the way to $1360-$1380.
The Powershares S&P500 High Beta ETF is a great way to track the momentum sector as a whole. One thing that was particularly interesting is that the trading range this year has been minimal. Since the Novemeber 2016 rally we've effectively traded in about a $3.00-$4.00 range. Could this be a sign for some of the high beta sector? Possibly and enough to mention in this weeks outlook.
The consensus is that markets here seem to be running out of steam. Now whether not it's a pullback to be bought can be discussed when we arrive but for now the upside opportunity on equities is not that appetizing. The positive is that the options and futures markets allow us as active-traders to capitalize on the market whether it goes up or down so bring it on.
Enjoy the trading week and be sure to subscribe on the right.