Futures Trading Market Analysis


Futures Trading Article by Jim Wyckoff & Levels 4.09.2014

April 8th, 2014 Filed under Future Trading News, Futures Trading | Comment (0)

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1. Market Commentary
2. Futures Support and Resistance Levels – S&P, Nasdaq, Dow Jones, Russell 2000, Dollar Index
3. Commodities Support and Resistance Levels – Gold, Euro, Crude Oil, T-Bonds
4. Commodities Support and Resistance Levels – Corn, Wheat, Beans, Silver
5. Futures Economic Reports for Wednesday April 9, 2014


Hello Traders,

For 2014 I would like to wish all of you discipline and patience in your trading!

Knowing What You Don’t Know in Trading Marketsby Jim Wyckoff www.jimwyckoff.com  

 

The headline of this educational feature may be a bit confusing, but I will explain what I mean shortly. First, I want to reiterate that trading futures, stock and FOREX markets is not an easy undertaking. It disgusts me that there are a few unsavory people in our industry that portray trading as an easy, get-rich-quick scheme, or as some endeavor for which there are “secrets” to be learned from those who hold “trading secrets.”Folks, the plain truth is that there are no trading secrets and no easy paths to quick success in trading markets. Beware of anyone who tries to tell (or sell) you such.One of the biggest obstacles to success in trading markets is a lack of knowledge and understanding of the process of trading. The “process of trading” includes understanding financial leverage, market behavior and trader psychology. Understanding the process of trading can be achieved with perseverance and a willingness to continue to learn.It’s not coincidental that trading markets is similar to most other human endeavors: Hard work and experience are required to achieve notable success. A person who enjoys classic automobiles would not attempt to tear down and successfully rebuild an engine without having some previous experience, or without having learned about the workings of an automobile engine-including knowing about the tools involved in the operation.I have written numerous times that learning about different trading tools, different markets and different trading strategies provides a solid foundation on the road to trading success.Ironically, I believe a major advantage of being an experienced trader is knowing what you don’t know about markets and trading. Yes, you heard that right: Knowing what you don’t know.

What do I mean by this? I mean that there are certain elements of futures trading about which I do not “know,” and never will.

I don’t “know” what markets are going to do in the future. Some may ask, “How can you be in this business and not know what markets are going to do? How can you be a successful trader and not know where market prices are going?” My answer is that market analysis and trading (at least the way I see it) is not a business of bold predictions, but one of exploring market probabilities based upon market knowledge, price history, human behavior and trading experience. The fact that I “know that I don’t know” exactly what a market will do gives me a trading edge. Why? Because I will exercise more caution and think about and plan for what could happen if a trade turns against me. I know that some trades will indeed turn against me and that I need to have the capital to trade another day, so I won’t “put all my eggs in one basket.”

I prudently place protective buy and sell stops on trades because I do not “know” what the markets will do. I would rather absorb a small trading loss and be termed “wrong” about that trade, as opposed to risking trading with no protective stops and seeing a small loser turn into a big loser–all in the “hope” the market will turn around so I can be proven “right.”

(Do you see what I mean when I discuss human behavior? Most of us don’t like to be “wrong,” and will make decisions so that we are not wrong. In trading, sometimes the decisions traders make to avoid being “wrong” are not prudent decisions for those wanting to be successful traders in the long run.)

One sure fire clue I get that a trader does not have much trading and market experience (and needs more!) is when the trader tells me he or she “knows” a market is going to do something. What can be even worse is when a trader thinks he or she “knows” what the market is going to do, and then makes a trade that turns out to be a winner. That type of psychological reinforcement of a flawed trading characteristic only sets up the trader for a bigger disappointment at some point in the future-likely sooner rather than later.

Traders absolutely must respect the markets. Only the markets are 100% right. Traders who think they “know” exactly what a market will do are not showing the markets respect.

That’s it for now. Next time, we’ll examine another important issue on your road to trading success.

Jim Wyckoff is the proprietor of the analytical, educational and trading advisory service, “Jim Wyckoff on the Markets.” He has a website at www.jimwyckoff.com and his email address is jim@jimwyckoff.com


Futures Market Direction 4.08.2014

April 7th, 2014 Filed under Future Trading News | Comment (0)

Connect with Us! Use Our Futures Trading Levels and Economic Reports RSS Feed.

Like us on FacebookFollow us on TwitterView our profile on LinkedInFind us on Google+Cannon Trading Futures Trading Resistance & Support Levels and Economic ReportsFind us on Yelp

1. Market Commentary
2. Futures Support and Resistance Levels – S&P, Nasdaq, Dow Jones, Russell 2000, Dollar Index
3. Commodities Support and Resistance Levels – Gold, Euro, Crude Oil, T-Bonds
4. Commodities Support and Resistance Levels – Corn, Wheat, Beans, Silver
5. Futures Economic Reports for Tuesday April 8, 2014


Hello Traders,

For 2014 I would like to wish all of you discipline and patience in your trading!

TradeTheNews.com Weekly Market Update: Fed and ECB appear on course but markets left asking for directions

Fri, 04 Apr 2014 16:23 PM EST- Three great hopes helped put a bid under global equity markets in the first half of the week: hope for Chinese stimulus, ECB action and a monster US March jobs report. However in each case, disappointment was the main outcome. In China, the government unveiled a “targeted mini stimulus” with no price tag that rehashed investment priorities laid out by Beijing earlier this year. The ECB took no action at its monthly policy meeting on Thursday, and President Draghi repeated all of his familiar talking points. Draghi asserted that inflation would turn around of its own accord in coming months, although he did begin talking about the theoretical possibility of a quantitative easing program for the Eurozone if it can’t. In the US, the March jobs report was good but not great, with NFPs slightly higher but other weak job trends also still in place. The trade data was sluggish with lower overseas demand weighing on US exports; leading economists to downgrade their outlooks for Q1 growth. In Japan, the government officially raised the sales tax from 5% to 8%, while weak Tankan survey data suggested that Abenomics is facing headwinds. Government bond markets remained firm helped by a confluence lackluster economic data, the belief that key central banks will stay with accommodative policies longer and asset allocation flows away from high beta momentum stocks. The US 10-year yield ended up little changed on the week finishing back below 2.75%. For the week, the DJIA rose 0.6%, the S&P500 added 0.4% and the Nasdaq fell 0.7%.- Coming into the March jobs reports, there was a general feeling that the numbers would outperform expectations. This did not come to pass and both the +192K NFP and +192K private payrolls were a hair below expectations. However the February NFP was revised to +197K from +175K, putting the average monthly growth over the past three months at a healthy +178k. Many analysts were concerned about the flat hourly earnings component (they grew 0.4% in February) and the continuing weakness in underemployment. Both issues were cited by Yellen at her post-FOMC decision press conference as reasons for rates to remain low for an extended period.

– In the first half of the week, Brent crude fell to its lowest level since last November thanks to pressure from the prospect of Libyan oil returning to the market. Libya’s eastern oil ports were seized by rebel groups demanding more political rights and a cut of the nation’s oil revenue. Negotiations with the protesters have gone well and the two sides are close to reaching a deal which will reopen the oilfields and increase exports to 600K bpd from the current 150K bpd. Libya would still be operating below its 1.4 million bpd capacity, however the increase would have a significant impact on markets. Brent traded below $105 on Wednesday, with but climbed higher through week’s end on fears the deal might fall apart.

– There was some calming of geopolitical tensions early in the week on reports that Russia had withdrawn some of the military assets from its border with Ukraine. Russia President Putin told German Chancellor Merkel that he had ordered a partial withdrawal of Russian forces from the border area. This news was disputed by western military figures, including US Defense Sec Hagel and NATO Chief Rasmussen. On Friday there were reports that the Pentagon was looking at the possibility of sending two combat brigades to the Eastern European NATO allies, most likely Poland.

– The “momentum stocks” got hammered again, particularly late in the week. Declines in high-profile tech names, selected biotechs and frothy recent IPOs drove the Nasdaq down nearly 3% on Friday alone, undercutting overall risk appetite. Tesla and Facebook both lost 8% a piece on Thursday and Friday, Netflix dropped as much as 6% at its worst on the two days and Amazon lost as much as 5%. Smaller tech names had an even worse time: recent IPO FireEye sank as much as 20% in the Wednesday-to-Friday period, while Splunk and Palo Alto Networks dropped 14% a piece over the same period.

– Auto sales in January and February were sluggish and the major manufacturers claimed that intense winter weather had kept traffic away from dealerships. The March data out this week seems to confirm the industry’s excuses, as industry SAAR surged to 16.4M units, beating last year’s 15.3 million mark. Analysts highlight that the industry increased incentives to lure more traffic. Fiat’s Chrysler posted the largest sales increase, +13% y/y, the firm’s best March since 2007. Jeep and Ram truck brands saw sales increases of 47% and 26%, respectively, making for Jeep’s best sales month of all time. GM’s sales were up 4%, although bad press from CEO Mary Barra’s hammering on Capitol Hill over the ignition parts scandal obscured the firm’s results. Ford sales were up 3%. Toyota March sales grew 4.9%, while Nissan sales grew 8.3%.

Read the rest of this entry »


Knowing What You Don’t Know in Trading Markets

November 9th, 2011 Filed under Future Trading News | Comment (0)

Jump to a section in this post:
1. Market Commentary
2. Support and Resistance Levels – S&P, Nasdaq, Dow Jones, Russell 2000
3. Support and Resistance Levels – Gold, Euro, Crude Oil, T-Bonds
4. Daily Mini S&P Chart
5. Economic Reports for Wednesday November 8, 2011

1. Knowing What You Don’t Know in Trading Markets

The headline of this educational feature may be a bit confusing, but I will explain what I mean shortly. First, I want to reiterate that trading futures, stock and FOREX markets is not an easy undertaking. It disgusts me that there are a few unsavory people in our industry that portray trading as an easy, get-rich-quick scheme, or as some endeavor for which there are “secrets” to be learned from those who hold “trading secrets“.

Folks, the plain truth is that there are no trading secrets and no easy paths to quick success in trading markets. Beware of anyone who tries to tell (or sell) you such.

One of the biggest obstacles to success in trading markets is a lack of knowledge and understanding of the process of trading. The “process of trading” includes understanding financial leverage, market behavior and trader psychology. Understanding the process of trading can be achieved with perseverance and a willingness to continue to learn.

It’s not coincidental that trading markets is similar to most other human endeavors: Hard work and experience are required to achieve notable success. A person who enjoys classic automobiles would not attempt to tear down and successfully rebuild an engine without having some previous experience, or without having learned about the workings of an automobile engine-including knowing about the tools involved in the operation.

I have written numerous times that learning about different trading tools, different markets and different trading strategies provides a solid foundation on the road to trading success.

Ironically, I believe a major advantage of being an experienced trader is knowing what you don’t know about markets and trading. Yes, you heard that right: Knowing what you don’t know.

What do I mean by this? I mean that there are certain elements of futures trading about which I do not “know,” and never will.

I don’t “know” what markets are going to do in the future. Some may ask, “How can you be in this business and not know what markets are going to do? How can you be a successful trader and not know where market prices are going?” My answer is that market analysis and trading (at least the way I see it) is not a business of bold predictions, but one of exploring market probabilities based upon market knowledge, price history, human behavior and trading experience. The fact that I “know that I don’t know” exactly what a market will do gives me a trading edge. Why? Because I will exercise more caution and think about and plan for what could happen if a trade turns against me. I know that some trades will indeed turn against me and that I need to have the capital to trade another day, so I won’t “put all my eggs in one basket.”

I prudently place protective buy and sell stops on trades because I do not “know” what the markets will do. I would rather absorb a small trading loss and be termed “wrong” about that trade, as opposed to risking trading with no protective stops and seeing a small loser turn into a big loser–all in the “hope” the market will turn around so I can be proven “right.”

(Do you see what I mean when I discuss human behavior? Most of us don’t like to be “wrong,” and will make decisions so that we are not wrong. In trading, sometimes the decisions traders make to avoid being “wrong” are not prudent decisions for those wanting to be successful traders in the long run.)

One sure fire clue I get that a trader does not have much trading and market experience (and needs more!) is when the trader tells me he or she “knows” a market is going to do something. What can be even worse is when a trader thinks he or she “knows” what the market is going to do, and then makes a trade that turns out to be a winner. That type of psychological reinforcement of a flawed trading characteristic only sets up the trader for a bigger disappointment at some point in the future-likely sooner rather than later.

Read the rest of this entry »

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