Archive for ‘ES’

ES Emini Day Trading: Pivot-Fed Announcements-Commentary

By , 24 December, 2009, No Comment
ESH0
For 12/24/2009
How To Use
Symbol R1 R2 Pivot S1 S2
ESH0 1119.92 1124.33 1115.58 1111.17 1106.83

Fed and Fed Agency Announcements

Most of the CME Markets close at noon today for the Christmas Break, expect trading this morning to be light as many traders take the entire day off.

Jobless Claims
[Report][djStar]8:30 AM ET

NYSE Early Close – 1:00 ET

SIFMA Rec. Early Close 2:00 ET

Money Supply
[Bullet4:30 PM ET

Relevant Consensus Analysis

Durable Goods Orders
Released on 12/24/2009 8:30:00 AM For November, 2009
Prior Consensus Consensus Range Actual
New Orders – M/M change -0.6 % 0.5 % -1.0 % to 1.5 % 0.2 %
New Orders – Yr/Yr Change -11.9 % -7.8 %
Ex-transportation – M/M -1.3 % 2.0 %
Ex-transportation – Yr/Yr -11.3 % -6.9 %

Highlights
Boeing orders slipped in November but the rest of durables orders look good. New orders for durable goods in November rebounded 0.2 percent after a 0.6 percent decline in October. The boost in November came in below the consensus forecast for a 0.5 percent increase. Excluding the transportation component, new durables orders posted a 2.0 percent gain, following a 0.7 percent drop in October. The weakness in transportation was a huge drop in civilian aircraft orders.

The November rebound in new orders was broad-based outside of transportation. Sizeable gains were seen in communication equipment, up 4.0 percent, computers & electronics, up 3.7 percent; machinery, up 3.5 percent; and electrical equipment, up 3.2 percent. Also posting gains were primary metals and fabricated metals.

Transportation fell 5.5 percent after slipping 0.2 percent in October. Within transportation, nondefense aircraft dropped 32.6 percent in November; defense aircraft fell 3.2 percent; and motor vehicles slipped 0.2 percent.

The outlook for capital goods spending is improving at the core level-although it may be foreign spending more than domestic investment. However, headline new orders for nondefense capital goods fell 1.9 percent in November after an increase of 0.8 percent the previous month. The weakness was in the volatile aircraft component. Excluding aircraft, new orders for nondefense capital goods rebounded 2.9 percent after a 2.0 percent dip in October. These numbers reflect orders from both foreign and U.S. businesses.

Year-on-year, overall new orders for durable goods improved to minus 7.8 percent in November from minus 11.7 percent the month before. Excluding transportation, new durables orders increased to minus 6.9 percent from down 10.5 percent in October.

Overall, today’s durables report shows manufacturing still on a gradual uptrend. Growth in this sector is leading the economy but at a moderate pace.

Equities might be disappointed in the shortfall from expectation other than jobless claims fell more sharply than projected. Equities will likely rise on that report. However, Treasury yields were marginally lower on the two releases.

Jobless Claims
Released on 12/24/2009 8:30:00 AM For wk12/19, 2009
Prior Consensus Consensus Range Actual
New Claims – Level 480 K 470 K 450 K to 475 K 452 K

Highlights
The brightest spot on the economic calendar continues to be initial jobless claims which fell a very substantial 28,000 in the Dec. 19 week to 452,000 — a dip that the Labor Department describes as a part of “long-term trend” of improvement. The four-week average continues to come down, now at 465,250 for a 2,750 decrease. Continuing claims also continue to come down, 127,000 lower in the Dec. 12 week to 5.076 million. Trends for both initial and continuing claims show sizable improvement from November in what will raise talk of a possible gain for December payrolls.

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ES Emini Day Trading: Pivot-Fed Announcements-Commentary

By , 22 December, 2009, No Comment
ESH0
For 12/22/2009
How To Use
Symbol R1 R2 Pivot S1 S2
ESH0 1115.50 1122.75 1106.00 1098.75 1089.25

Fed and Fed Agency Announcements

GDP
[Report][Star]8:30 AM ET
Redbook
[Bullet8:55 AM ET

C

4-Week Bill Auction
[Bullet11:30 AM ET

Consensus Reports

GDP
Released on 12/22/2009 8:30:00 AM For Q3:09
Prior Consensus Consensus Range
Real GDP – Q/Q change – SAAR 2.8 % 2.7 % 2.5 % to 2.9 %
GDP price index – Q/Q change – SAAR 0.5 % 0.5 % 0.5 % to 0.5 %

Market Consensus Before Announcement
GDP for the second estimate for the third quarter growth was revised downward to an annualized 2.8 percent from the initial estimate of 3.5 percent. The third quarter increase, however, appears to have ended the recession which faded with a 0.7 percent dip in the second quarter. With the third estimate for the third quarter, the components facing potentially notable revisions are inventories and net exports. Turning to inflation, the GDPI price index was nudged down to a 0.5 percent annualized pace for the third quarter from the initial estimate of 0.8 percent.

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ES Emini Day Trading: Pivot-Fed Announcements-Commentary

By , 20 December, 2009, No Comment

ESZ9
For 12/21/2009
How To Use
Symbol R1 R2 Pivot S1 S2
ESZ9 1107.10 1111.80 1102.80 1098.10 1093.80

Fed and Fed Agency Announcements

6-Month Bill Auction
[Bullet11:30 AM ET

Highlights
After the boost to equities at Friday’s close from quadruple witching, will the gains reverse as trading returns to normal?

ES Emini Day Trading: The Perfect Day Job

By , 16 December, 2009, No Comment

Day trading allows you to get your life back from the 9-5 grind of a regular job. I get to spend more time with my family and children, along with having time for some of the leisure pursuits I have always dreamed of doing. Trading is not for everyone, but most people can be taught to trade with profitable results, and you only improve as you gain more and more experience.

Read More →

ES Emini Day Trading: Pivot-Fed Announcements-Commentary

By , 16 December, 2009, No Comment
ESZ9
For 12/16/2009
How To Use
Symbol R1 R2 Pivot S1 S2
ESZ9 1114.58 1120.42 1109.92 1104.08 1099.42

Fed and Fed Agency Announcements

Housing Starts
[Report][Star]8:30 AM ET
Current Account
[Report][Bullet8:30 AM ET

Consensus Analysis

MBA Purchase Applications
Released on 12/16/2009 7:00:00 AM For wk12/11, 2009
Prior Actual
Purchase Index – W/W Change 4.0 % -0.1 %

Highlights
MBA’s purchase index slipped 0.1 percent in the Dec. 11 week with the refinance index up 0.9 percent. Mortgage rates remain extremely low, at 4.92 percent for 30-year loans. Housing starts for November will be released at 8:30 ET this morning and are expected to show a gain following a drop in October.

Consumer Price Index
Released on 12/16/2009 8:30:00 AM For November, 2009
Prior Consensus Consensus Range Actual
CPI – M/M change 0.3 % 0.4 % 0.2 % to 0.6 % 0.4 %
CPI – Y/Y change -0.2 % 1.9 %
CPI less food & energy 0.2 % 0.1 % 0.1 % to 0.2 % 0.0 %
CPI less food & energy – Y/Y change 1.7 % 1.7 %

Highlights
The consumer price report for November was calming on most financial markets despite the rise in the headline number. Both the headline and core numbers were much less inflationary than yesterday’s scary PPI numbers. Headline consumer price inflation jumped 0.4 percent in November after gaining 0.3 percent the month before. The November headline matched the consensus forecast. Core CPI inflation-in contrast with yesterday’s core PPI run up-eased to 0.0 percent (no change) after a 0.2 percent increase in October. The consensus had called for a 0.1 percent rise.

The headline number was boosted mainly by a 4.1 percent surge in energy costs after a 1.5 percent gain in October. Gasoline was up 6.4 percent, following a 1.6 percent gain the month before. Food price inflation was soft in November with a 0.1 percent rise-the same as in October.

Within the core, declines in shelter indexes offset increases in costs for new and used motor vehicles, medical care, airline fares, and tobacco. Shelter costs declined 0.2 percent in the latest month, led by a 1.5 percent drop in lodging away from home. Owners’ equivalent rent dipped 0.1 percent. Hotels-including resorts-continued to engage in heavy discounting. High unemployment is keeping rent soft in general.

Year-on-year, headline inflation increased to plus 1.9 percent (seasonally adjusted) from minus 0.2 percent in October. The core rate was unchanged in November at up 1.7 percent. On an unadjusted year-ago basis, the headline number was up 1.8 percent in November while the core was up 1.7 percent.

Inflation is still high at the headline level but it is not as severe as earlier indicated by the PPI for November. A flat reading for the CPI core suggests that a sluggish economy is keeping underlying inflation tame for now.

Housing Starts
Released on 12/16/2009 8:30:00 AM For November, 2009
Prior Consensus Consensus Range Actual
Starts – Level – SAAR 0.529 M 0.575 M 0.540 M to 0.600 M 0.574 M
Permits – Level – SAAR 0.552 M 0.584 M

Highlights
Housing starts looked good for November but most of the gain was largely a comeback and then some in multifamily starts-a volatile component. The single-family component posted only a partial rebound. Construction companies picked up the pace of groundbreaking for new homes as housing starts in November rebounded 8.9 percent, following a revised 10.1 percent plummet in October. The November pace of 0.574 million units annualized came in right at the market forecast for 0.575 million units and was down 12.4 percent on a year-ago basis. The latest comeback was led by a 67.3 percent rebound in multifamily starts, following a sharp 29.5 percent plunge in October. Meanwhile the single-family component edged up 2.1 percent after a 7.1 percent fall the month before.

By region, the November rebound in starts was led by 16.4 percent rebound in the Northeast with gains also seen in the South, up 12.3 percent; Midwest, up 3.0 percent; and West, up 1.9 percent.

Homebuilders are modestly optimistic about ramping up the pace of construction as housing permits in November rebounded 6.0 percent after falling 4.2 percent in October. October’s pace of 0.552 million units annualized was down 24.3 percent on a year-ago basis.

Today’s housing starts report is good but should be seen in the context of October’s weak numbers. The two months together indicate that housing is in a slow recovery. The bad news is that the recovery is slow. But the good news is that the housing construction recovery is slow-anything more robust at this point would not be sustainable.

FOMC Meeting Announcement
Released on 12/16/2009 2:15:00 PM
Prior Consensus
Federal Funds Rate – Target Level 0 to 0.25 % 0 to 0.25 %

Market Consensus Before Announcement
The FOMC announcement for the December 15-16 FOMC policy meeting is expected to leave the fed funds target rate unchanged at a range of zero to 0.25 percent. However, traders will be watching to see if the “extended period” language is qualified with any additional wording regarding the future path of the fed funds rate. Traders also will look for updates on the Fed’s view of the recovery and on the Fed’s plan for unwinding balance sheet expansion.

ES Emini Day Trading: The Basics-Long or Short on Your Trades

By , 16 December, 2009, No Comment

ES Emini Day Trading: The Basics-Long or Short on Your Trades

I often get a chuckle when I see trading programs that claim you can make money in both up and down markets.  Of course you can, when the market is going up you are long a position, and when the market is going down you are short a position.  It’s pretty simple, at first glance.

But how does it really work?

First let me point out that the mechanisms and terminology for “long” and “short” are different when referring to futures contracts as oppose to the manner in which “short” and “long” are implemented in trading stocks.  Though the end result of both types of transactions is similar, the mechanism for accomplishing a stock short and a futures short are quite different.

When traders who speculate go long, they presume the price will rise in an electronic trading exchange.  The idea is fairly simple to explain, let us say the price of the Dow emini (called the YM contract) is trading at 1000 and you buy long, your hope is that the price will go up and you will profit when you sell.

When speculators sell short, they presume the price will fall in an electronic trading exchange.  Again, the idea is fairly similar.  Let’s again say the price of the YM contract is 1000 and you sell short, your hope is that the price will go down and you will profit when you close the position.

So, in essence, in a long position you buy first then sell, and in a short position you sell first then get bought out (called closing out).

We understand now that you can make money buy going long and the market moves upward, and if you sell short and the market moves down.  But this is a good news and bad news proposition.  If you take a long position and the market moves upward, your profit potential is unlimited, and visa versa for a short position.  This makes futures contracts very attractive.  But futures contracts are also a dog that bites, and if you go long and the market moves down, in the opposite direction you thought, your potential for loss is unlimited.  The same holds true with short positions, if you sell short and the market moves upward, your potential for loss is unlimited.

Uh-oh, this doesn’t sound so wonderful after all, does it?

There are measures that all futures speculators employ to limit risk.  These are called stops and we will spend some time in a future article about the methods employed using stops to make sure that you don’t let a loss destroy your account.  Further, proper money management of your future accounts, that is, not taking positions that are inappropriately large for the size of the individuals futures account must be observed to avoid averse outcomes in trading.  The important thing in this final paragraph to understand is that we can trade in up and down markets and all traders employ measures to control risk in their trading.

I endorse a state of the art trading program for beginners at Trading Concepts, Inc It’s an awesome product that will have you well on your way to success. Plus, it has a money back guarantee…you have nothing to lose and thousands to gain.

ES Emini Day Trading: More on the Scalping Style of Trading

By , 15 December, 2009, No Comment

One of the toughest occupations to define is that of a trader.  There are countless variations on methods for trading the ES Emini contract.  Most forms of trading differ in the length of time the trader holds a given contract.  Of course, all traders attempt to accomplish the same goal: profit by moves in the market.  It is simply the manner in which traders quantify moves in the market the delineates them from each other.

Before I continue much further, I should state that I am a dedicated scalper.  I never hold contracts overnight, and my average trade seldom lasts more than twenty minutes.  I am looking to snatch small 2-3 point moves in the market and cash in on them.  Generally speaking, I am unconcerned about the fundamentals of the market and concentrate solely on trading the chart in front of me, with little consideration for what the market is going to do tomorrow, next week or next year.  My time frame in trading is strictly “now.”

Scalp trading is about making many small gains throughout the day and never about trying to hit a “home run” on a trade.  Scalpers also rely heavily upon technical indicators and thus, most scalpers are experienced traders.  Scalp traders risks are minimal and are an effective use of trading capital since this method of trading usually generates more winning trades than traditional day trading.  Scalpers generally run very tight stops and limits and are extremely risk averse.  I would also point out that beginning traders can make use of scalping techniques.  I point novice traders in the direction of scalping because of the lower risks involved with this style of trading.  Still, even Scalping takes a high level of self discipline to be successful.

One component of scalping that is often overlooked is the high degree of concentration that is required to scalp effectively.  The chance to make sizable gains sometimes comes rapidly and the trader has to be prepared to exit his trade when the correct opportunity rises…because you may only get once chance to make the winning trade in a given trading sequence.

The technical indicators most scalpers use vary widely from trader to trader, and are generally not shared with others.  It is sort of like having a great fishing spot and not wanting to share it with an army of fisherman who would fish it out quickly.  Generally speaking though, scalpers use momentum indicators set to very short time periods.  The CCI, MACD, Stochastic indicator and RSI are all common oscillators the scalper utilizes in various capacities.  Of course, support and resistance are among the most important tools the scalper uses, along with pivot points and theoretical support and resistance calculated from the pivot point.

It takes some practice, but scalping can be as profitable as any trading method, and there are a lot less headaches.  You don’t lose any sleep on overnight trades because you never have a trade overnight.  It is my style of choice.

I endorse a state of the art trading program for beginners at Trading Concepts, Inc It’s an awesome product that will have you well on your way to success. Plus, it has a money back guarantee…you have nothing to lose and thousands to gain.

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