Synergistic Trading Newsletter |
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www.TradingEducation.com |
April 14, 2008 |
Good Morning Subscribers!
Major market benchmarks were mixed early Monday as news of a capital infusion coupled with a deep quarterly loss for one of the nation's largest banks was offset by a better-than-expected retail sales report by the Commerce Department.
Oil prices were rebounding this morning on reports that a U.S. oil pipeline was shut for repairs and as the dollar weakened again against other currencies. Light, sweet crude for May delivery on the New York Mercantile Exchange rose $1.02 to $111.16 a barrel in electronic trading by afternoon in Europe. The contract rose 3 cents to close at $110.14 a barrel Friday.
It's our pleasure to bring you this week's newsletter.
Warm Regards,
Lane Mendelsohn
Website Publisher
In
This Issue...
|
Time For A Self Evaluation
by
Van K. Tharp, Ph.D. |
2 |
|
One of My Favorite Trading Set-ups
by
Jim Wyckoff |
3 |
|
Currency/Commodity Markets
by
Kevin Klombies |
4 |
|
U.S.
Stock Market Update
by
Robert W. Colby |
5 |
|
Weekly Currency Wrap-up
by
Darrell Jobman |
6 |
Synergistic Trading Newsletter |
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www.TradingEducation.com |
April 14, 2008 |
Trading Psychology
Time for a Self Evaluation
by Van K.Tharp, Ph.D.
One of my primary roles as president of the International Institute of Trading Mastery, Inc. is to be a coach to some of the best traders and investors in the world. And, just like any coach, I focus on making sure that the people I am working with are following the fundamentals.
In 2008, we are starting the second major downleg (in my opinion) of a huge secular bear market. Real inflation is running over 12% (16% if you use M3, the total growth of money in the country); the U.S. dollar is declining in value; the Federal Reserve commissioned a report that says the U.S. is bankrupt, and we have a monstrous credit crisis in our midst. However, crisis can also mean opportunity. But these are very difficult markets, as are most bear markets, and you must be able to follow the fundamentals of your craft.
With peak performance trading in mind, I decided to develop a quick 15-point questionnaire for you to evaluate yourself. Take it yourself and pass it on to your friends. I’m sure you’ll all get some insights about your performance.
Answer each question with a true or false answer.
| 1) I have a written a business plan to guide my trading/investing. |
____ |
| 2) I have read Safe Strategies for Financial Freedom, the 2nd Edition of Trade Your Way to Financial Freedom and I keep up with Tharp’s Thought. As a result, I think I understand the big picture. (A true answer doesn’t necessarily mean you agree with my viewpoint on the big picture.) |
____ |
| 3) I am totally responsible for my trading results, and, as a result, I can continually correct my mistakes. (If part 2 is false, all of this is false) |
____ |
4) I can honestly say that I do a good job of letting my profits run and cutting my losses short |
____ |
| 5) I have at least three trading strategies that I can use that fit the big picture. |
____ |
| 6) For trading strategy one, I have collected an R-multiple distribution of at least 50 trades (i.e., from historical data or live trading). |
____ |
| 7) For trading strategy two, I have collected an R-multiple distribution of at least 50 trades (i.e., from historical data or live trading). |
____ |
| 8) For trading strategy three, I have collected an R-multiple distribution of at least 50 trades (i.e., from historical data or live trading). |
____ |
| 9) For each of my trading strategies, I know the expectancy and the standard deviation of the distribution. |
____ |
| 10) I know how each system will perform in each of the following types of markets: up-quiet, up-volatile, sideways-quiet, sideways-volatile, down-quiet, and down- volatile. |
____ |
| 11) I have clear objectives for my trading. I know what I can tolerate in terms of drawdowns, and I know what I want to achieve this year. |
____ |
| 12) Based upon my objectives, I have a clear position-sizing strategy to meet those objectives. |
____ |
| 13) I totally understand that I am the most important factor in my trading, and I do more work on myself than any other aspect of my trading/investing. |
____ |
| 14) I totally understand my psychological issues, and I work on them regularly. |
____ |
| 15) I would consider myself to be very disciplined as a trader /investor. |
____ |
| 16) I do the ten tasks of trading on a regular basis. If yes, on the average, how many days per week do you do it? Give one point per day. This one can count up to five points because it is so important. |
____ |
Okay, now give yourself one point for each true answer. And be honest with yourself. Since question 16 counts up to five points, your total score can be as high as 20.
Fill in your score here: _______.
Now let’s take a look at how you rate.
15 or more. You have the makings of a great trader/investor, and you probably are doing very well in the market, even this market.
12 –14. You have a lot of potential, but you are probably making some major mistakes and for many of you, these may be psychological mistakes.
9 – 11. You are way above average, but you haven’t graduated to the big leagues yet. You are like a high school football star, trying to move to the NFL.
6 – 8. You are better than the average investor on the street, but you have a long way to go to hone your skills. You probably need to really work on yourself, on your discipline, and on your trading strategies.
5 or less. You represent the average trader/investor. You probably want someone to tell you exactly what to do and then you expect to make big profits based on the recommendation. And when it doesn’t happen, you look for a better advisor or guru to help you. Guess what? … it doesn’t work that way. But, if you at least answered true to question 12, then you have some potential and, if you are willing to commit yourself to excellence, you could move to the top of the scale in a few years.
Suggestions for Study
I'm not trying to give you a sales pitch here. But for those who will want to know... If you need help with business planning, I recommend the Business Planning CD Series.
If you need help understanding why you are the most important factor in your trading, then I recommend the Peak Performance material, either the home study course or the workshop. If you haven’t done this course yet, I strongly recommend that you do it now. Stop trading and do the course, especially if you are not making money trading. (And it's ok to start with either the home study or the workshop that is just around the corner).
If you don’t understand strategies and expectancy, then I recommend that you do the Systems Home Study Course.
And again, I'm not trying to give you a sales pitch. I just have the utmost confidence that these tools will help you like I've seen them help so many other traders over the years.
Until next week, this is Van Tharp.
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Synergistic Trading Newsletter |
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www.TradingEducation.com |
April 14, 2008 |
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Weekly Futures Market Commentary
One of My Favorite Trading Set-ups
by Jim
Wyckoff,
Senior Editor
A fellow emailed me recently, asking: "Without giving away any precious secrets, could you tell me a way to improve my entries and exits (on trades)? It seems nobody wants to share their system."
Well, first of all, I don't have any trading "secrets." What I do have is many years of market experience, including studying the markets and technical analysis--and listening carefully to the best and brightest traders share their philosophies on successful trading. (You should be suspicious if anyone tries to tell (or sell) you any trading "secrets.")
On better entering and exiting trades, first of all you need a trading plan--before you enter the trade--and you need to stick to it. Your trading plan can have different scenarios and options once you're into the trade, but the key here is don't "fly by the seat of your pants" when you're into a trade. You don't want to let emotions dictate your strategies while you're actively trading a market.
Know how much money you can stand to lose and then place a protective buy or sell stop accordingly, and then don't change your mind when you're in the middle of the trade.
If you've got a winner going, you should also have a plan in place regarding when to take your profits. Again, your trading plan can allow for some flexibility once you are in the trade.
More specifically, I like to "buy into strength" and "sell into weakness." This trading method abides by the old trading adage, "The trend is your friend." Conversely, traders who try to "fight the tape" and be a bottom-picker or top-picker usually wind up getting their fingers burned.
One of my favorite trading "set-ups" is when prices have been in a trading range or congestion area on the chart--between key support and resistance levels--for an extended period of time (the longer, the better). Then if the price "breaks out" of the range (above the key resistance or below the key support), I like to enter the market--long on an upside breakout or short on a downside breakout. A safer method would be to make sure there is follow-through strength or weakness the next trading session--in order to avoid a false breakout. The trade-off there is that you could be missing out on some of the price move by waiting an extra trading session.
If you are long the market, set your sell stop just below a technical support level that's within your tolerance for a drawdown. If you're short, set your buy stop just above a technical resistance level that's within your tolerance for a drawdown. Don't set your stops right at support or resistance levels, because there's a decent chance that those levels will check and possibly reverse the price move--and you'll miss getting stopped out.
If you've got a winner and decide to let your profits run (per your initial trading plan), use trailing stops that utilize technical support and resistance levels.
That is it for this week. You can also visit my daily blog at www.traderblogs.com
Have a great week!
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Synergistic Trading Newsletter |
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www.TradingEducation.com |
April 14, 2008 |
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Commodity, Bond and Currency Market Weekly Review
Currency/Commodity Markets
by Kevin Klombies
Below show the Australian dollar (AUD) futures and the stock price of FreePort McMoRan (FCX).
The simple point here is that the metals and miners trend with the commodity currencies so as long as the AUD is flat to lower the stock price of FCX should be heavy as well.
Moving on we show two charts of cocoa futures and the Nasdaq Composite Index at bottom right. The top chart shows the time frame through 2002 and 2003.
The chart shows that cocoa futures prices have a tendency at times to trend in almost exactly the opposite direction of the equity market. We could have used the S&P 500 Index for this argument but have focused on the Nasdaq instead.
We have no idea why cocoa prices have and are trending inversely to the equity markets but thought it worth the effort to at least point out the relationship. One might argue that this has everything to do with the dollar’s weakness and the push into commodities as a hedge against inflation but that wouldn’t help explain why these markets were doing much the same thing way back in 2002 and 2003. In any event... notice that the peak for cocoa in mid-March went with the lows for the Nasdaq but that cocoa prices were starting to jump higher towards the end of last week as the equity markets rolled over.
Below we show the gold etf (GLD) and the product of crude oil futures times natural gas futures.
At the end of last week the product of oil times gas curled just a bit lower. If it starts making new highs this week then we would have to expect new highs for gold as well. However, since it remains below the March peak with the Nasdaq above the March lows... we will continue to focus on the potential for the commodity markets to complete a ‘crash top’ later this month.
Short-Term Views
At right we show the Nikkei 225 Index and the gold etf (GLD).
On page 3 we suggested that the energy price combination (oil times gas) had yet to make new highs which at least opened the door for the argument that commodity prices have already peaked. The Nikkei is trending in exactly the opposite direction of gold prices so the better it does the more negative the argument for commodity prices and vice versa.
Below we show the Canadian dollar (CAD) futures and the ratio between the Canadian (EWC) and Japanese (EWJ) etfs.
The point here is that the CAD trends with the commodity theme and through last week it was anything but robust as it moved back below the 200-day e.m.a. for the 4th time since January. The CAD has fairly important support between .96 and .97 but if, as, or when this support fails the EWC/EWJ ratio suggests that Japanese shares should finally begin to outperform the commodity price sensitive Cdn equity market. The bottom line is that the commodity trend is still positive although small cracks have been appearing here and there and when it turns negative then it makes sense to like the Nikkei.
Below right we show the CRB Index from the current time period and the S&P 500 Index from 1987.
To really kick in the ‘crash top’ outcome the CRB Index would still have to break back below the 50-day e.m.a. line and continue down to the March lows around the 380 level. Then if the CRB Index were to break to new lows it has the potential to decline by another 20% or 30% into May. This would obviously be a positive for the U.S. dollar and the U.S. equity markets- with an emphasis on the Nasdaq- along with Japan’s Nikkei 225 Index.
Best
Wishes,
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Synergistic Trading Newsletter |
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www.TradingEducation.com |
April 14, 2008 |
U.S.
Stock Market Update - April 11, 2008
Short-term stock market momentum turned Bearish.
The 3-week upward correction/consolidation phase has ended.
The SPY ETF broke down from a Bearish Rising Wedge chart pattern.
Look for a likely test of the lows or new lows.
Energy and Materials Sectors’ Relative Strength Ratios rose to new all-time highs, confirming major uptrends.
Industrial Sector Relative Strength Ratio broke sharply lower to a new 6-week low.
On Friday, major stock price indexes opened lower and continued to work still lower most of the day. Momentum turned Bearish for the short term. NYSE volume rose by 1%.
The recent 17-day correction/consolidation phase, a Minor Ripple within a Major Bearish Trend, appears to have ended. Preexisting Major Trends tend to resume after such short-term correction/consolidation phases run their course.
The “reports” of the day were depressing. General Electric’s earnings fell 8% and management offered a disappointing outlook. The University of Michigan confidence survey fell 9% to 63.2, the lowest level in 46 years, since March 1982. Frontier Airlines filed for Chapter 11 bankruptcy protection.
The main technical trend still appears to be down for the broad-based stock price indexes. From 3/17/08 to 4/3/08, the fundamental worries were temporarily displaced by hopes for some kind of a rescue, from the Fed, the government, or big investors. That hopeful feeling would be dampened by continuing bad fundamental news, which seems likely.
Day to day, the stock market has been quite reactive to the news, rumors, and “reports” of the day, which certainly have been plentiful, although not always accurate. These “reports” strike at any unpredictable moment, like bolts out of the blue, disrupting trends and making short-term trading risky. In such a shifty market, short-term traders need to be nimble, be quick, and control risk. Investors need to be cautious and risk averse.
Spotlight on event stocks: Here is a stock screen I designed to pick out potential “event” stocks, both Bullish and Bearish. Sometimes, stocks with large changes in price and volume are revealed to be deal stocks, sooner or later, or are the subject of some other extraordinary events, positive or negative.
Bullish Stocks: Rising Price and Rising Volume
% Price Change, Symbol , Name
1.52% , MYY , Short 100% MidCap 400, MYY
4.06% , FAST , Fastenal Company
1.82% , SH , Short 100% S&P 500, SH
2.12% , DOG , Short 100% Dow 30, DOG
3.66% , MZZ , Short 200% MidCap 400 PS, MZZ
3.37% , DXD , Short 200% Dow 30 PS, DXD
1.34% , TEVA , Teva Pharmaceutical Industries Limited
1.90% , CCU , CLEAR CHANNEL
1.11% , AES , AES
0.43% , IEF , Bond, 10 Year Treasury, IEF
2.39% , SAF , SAFECO
1.26% , WEN , WENDYS INTL
2.17% , ACV , Alberto-Culver Co.
0.28% , ACS , AFFILIATED COMPUTER
0.64% , EP , EL PASO
0.48% , KSU , Kansas City Southern, KSU
1.81% , UST , UST
1.31% , SLM , SLM CORP
0.71% , MON , MONSANTO
0.44% , XEL , XCEL ENERGY
0.17% , SHY , Bond, 1-3 Year Treasury, SHY
0.33% , VMC , VULCAN MATERIALS
0.23% , WMB , WILLIAMS
0.26% , ATVI , Activision Inc.
0.64% , EWJ , Japan Index, EWJ
0.75% , TIP , Bond, TIPS, TIP
0.13% , IPG , INTERPUBLIC GRP
0.67% , TLT , Bond, 20+ Years Treasury, TLT
1.18% , SGP , SCHERING PLOUGH
0.05% , ITF , Japan LargeCap Blend TOPIX 150, ITF
3.32% , SDS , Short 200% S&P 500 PS, SDS
0.10% , LQD , Bond, Corp, LQD
0.19% , LMT , LOCKHEED MARTIN
0.30% , AZO , AUTOZONE
0.18% , CPB , CAMPBELL SOUP
Bearish Stocks: Falling Price and Rising Volume
% Price Change, Symbol , Name
-1.96% , VCR , Consumer D. VIPERs, VCR
-12.79% , GE , GENERAL ELECTRIC
-1.80% , RFG , Growth MidCap S&P 400, RFG
-2.62% , VGT , Info Tech VIPERs, VGT
-15.66% , PWER , POWER ONE
-1.78% , PWV , Value LargeCap Dynamic PS, PWV
-2.33% , PTE , Telecommunications & Wireless, PTE
-6.41% , HSY , HERSHEY FOODS
-2.82% , DSG , Growth Small Cap DJ, DSG
-2.27% , PXQ , Networking, PXQ
-1.86% , TMW , Wilshire 5000 ST TM, TMW
-1.21% , PBJ , Food & Beverage, PBJ
-1.93% , PHJ , Dividend Growth PS, PHJ
-2.14% , NY , Value LargeCap NYSE 100 iS, NY
-2.74% , IJS , Value SmallCap S&P 600 B, IJS
-1.81% , VFH , Financials VIPERs, VFH
-2.79% , IWC , Microcap Russell, IWC
-4.27% , VIS , Industrials VIPERs, VIS
-2.34% , BDH , Broadband H, BDH
-4.51% , CTAS , CINTAS
-3.95% , PSI , Semiconductors, PSI
-3.88% , IYJ , Industrial LargeCap Blend DJ US, IYJ
-2.93% , PSJ , Software, PSJ
-2.66% , PHW , Hardware & Electronics, PHW
-2.13% , JKL , Value SmallCap iS M, JKL
-3.10% , RZV , Value SmallCap S&P 600, RZV
-6.24% , HBAN , HUNTINGTON
-1.95% , ISI , LargeCap Blend S&P 1500 iS, ISI
-2.67% , XLK , Technology SPDR, XLK
-4.70% , JCI , JOHNSON CONTROLS
-3.93% , XLI , Industrial SPDR, XLI
-1.80% , IIH , Internet Infrastructure H, IIH
-3.00% , PXN , Nanotech Lux, PXN
-1.80% , VGK , European VIPERs, VGK
-1.28% , IXG , Financials Global LargeCap Value, IXG
-2.93% , TDC , Teradata Corporation, TDC
-2.66% , PWT , Growth SmallCap Dynamic PS, PWT
-3.36% , PBI , PITNEY BOWES
-1.94% , PWB , Lg Cap Growth PSD, PWB
-7.72% , CFC , COUNTRYWIDE FNCL
Sectors: among the 9 major U.S. sectors, all 9 fell.
Major Sectors Ranked for the Day
% Price Change Sector
-0.03% Utilities SPDR, XLU
-0.64% Consumer Staples SPDR, XLP
-1.29% Materials SPDR, XLB
-1.31% Health Care SPDR, XLV
-1.40% Energy SPDR, XLE
-1.84% Consumer Discretionary SPDR, XLY
-1.91% Financial SPDR, XLF
-2.67% Technology SPDR, XLK
-3.93% Industrial SPDR, XLI
Looking beyond the daily fluctuation to the major trends (listed in order of long-term relative strength):
Energy (XLE) Neutral, Market Weight. On 4/11/08, the XLE/SPY Relative Strength Ratio rose to new all-time high, confirming a major uptrend.
Materials (XLB) Neutral, Market Weight. On 4/11/08, the XLB/SPY Relative Strength Ratio rose to a new all-time high, confirming a major uptrend.
Consumer Staples (XLP) Neutral, Market Weight. On 3/28/08, the XLP/SPY Relative Strength Ratio rose to new 5-year high.
Utilities (XLU) Neutral, Market Weight. The XLU/SPY Relative Strength Ratio has eroded significantly since its all-time high on 1/9/08, and so Utilities have been slipping in these rankings.
Industrial (XLI) Bearish, Underweight. On 4/11/08, the XLI/SPY Relative Strength Ratio broke sharply lower to a new 6-week low.
Health Care (XLV) Bearish, Underweight. On 4/3/08, the XLV/SPY Relative Strength Ratio made another new 8-month low.
Technology (XLK) Bearish, Underweight. On 2/25/08, the XLK/SPY Relative Strength Ratio fell to a new 10-month low, confirming a significant downtrend.
Consumer Discretionary (XLY) Bearish, Underweight. On 4/9/08, the XLY/SPY Relative Strength Ratio fell to a new 11-week low, suggesting renewed weakness. On 1/11/08, the XLY/SPY Relative Strength Ratio fell to a new 6-year low, confirming a major downtrend.
Financial (XLF) Bearish, Underweight. On 3/17/08, both absolute price and the XLF/SPY Relative Strength Ratio fell to their lowest levels in nearly 5-years, again confirming a major Bearish trend.
Foreign stock indexes have shown better relative strength short-term, since 3/24/08. Intermediate term, the EFA (the EAFE, international developed country stock markets, (ex the U.S. and Canada) has underperformed since 11/27/07.
NASDAQ Composite price underperformed since 11/7/07. The minor Ripple trend has improved only slightly since 3/3/08 and appears questionable at best. On 3/3/08, Relative Strength fell to a new 9-month low, confirming a significant downtrend.
Growth Stock/Value Stock Relative Strength Ratio eased lower a day after making a new 12-week high. The Growth/Value ratio (IWF/IWD) may have ended an intermediate-term correction phase, but needs upside follow-through for confirmation.
The Small Cap/Large Cap Relative Strength Ratio broke down to a new 2.5-year low on 1/11/08. It has been trending down since 4/19/06. The main long-term trend is Relatively Bearish for Small Caps.
Crude Oil futures rose slightly. The short-term trend is still up. U.S. OIL FUND ETF (AMEX: USO) is not a pure play on Crude Oil, although it generally moves in the same direction.
The Energy stock sector has underperformed Crude Oil since 12/10/07.
Gold futures fell again, and the 8-day trend seems questionable. Long term, the 7-year trend is Bullish.
Silver sharply underperformed Gold since 3/5/08. In addition, iShares Silver Trust (AMEX: SLV) has been relatively weak compared to Gold longer term, since 12/7/06. Finally, for the past 28 years, since 1/2/80, Silver has underperformed Gold.
The Gold Miners ETF (GDX) fell hard since 3/14/08. Longer-term, GDX significantly underperformed Gold since 10/31/07. Therefore, GDX trends have been Bearish relative to Gold itself.
U.S. Treasury Bond prices surged above the previous 8-days’ highs. Bonds’ 8-day trend is up. Bond prices benefit from fears of financial crisis, and they correct when crisis takes a back seat to some other news of the day. U.S. governments have been strong ,while corporate bonds have been weak.
The U.S. dollar turned weaker within its sideways consolidation pattern over the past 17 trading days. The minor trend is deteriorating, and the major trend of the dollar is down.
The Art of Contrary Thinking: Traders need to be extremely nimble to keep up with rapid changes in the mass mood of late. The business and financial news has flipped from fear to hope and back again many times in recent weeks, creating an extremely choppy trading environment. Investors’ moods and stock volatility have jumped up and down abruptly with the latest “reports”. When mass psychology shifts so dramatically and unpredictably from hope to fear, without warning, risk control becomes more important than aggressive profit seeking. Stay flexible.
Sentiment/Contrary Opinion: There were 37.4% Bulls versus 38.5% Bears as of 4/9/08, according to the weekly Investors Intelligence survey of newsletter advisors. The Bull/Bear ratio remained at 0.97, unchanged from 0.97 the previous week. The ratio’s 38-year range is 0.28 to 17.51, and the median is 1.47.
VIX “Fear Index”, now at 23.46, is relatively normal by Bear Market standards (around 20 to 40) but relatively high by Bull Market standards (around 10 to 20). Longer term, VIX has been in a rising trend since it hit a 13-year low of 9.89 on 1/24/07. The all-time high was 45.74 on 10/8/98. VIX is a market estimate of expected constant 30-day volatility, calculated by weighting S&P 500 Index CBOE option bid/ask quotes spanning a wide range of strike prices for the two nearest expiration dates.
VXN “Fear Index”, now at 25.54, is relatively low by Bear Market standards (around 35 to 80) but relatively high by Bull Market standards (around 12 to 26). Longer term, VXN has been in a rising trend since it hit its all-time low of 12.61 on 7/29/05. The all-time high was 114.23 on 10/8/98. VXN measures Nasdaq Volatility using a method comparable to that used for VIX.
CBOE Put/Call Ratio is 0.89, which indicates moderately Bearish sentiment. Its 4-year simple moving average and median are 0.62, and its 4-year range is 0.35 to 1.28.
ISEE Call/Put Ratio is 0.93, which indicates moderately Bearish sentiment. It is below its 4-year simple moving average at 1.50 and its 4-year median at 1.47. That means customers opened fewer long call options and more long put options than normal. Its 4-year range is 0.51 to 3.04.
Fundamentals: The 2003-2007 Bull Market was fed by abundant global liquidly, M&A, leveraged buyouts, corporate stock buybacks, and the net balance of positive earnings surprises. The unfolding fallout from the subprime credit market crisis has derailed that engine. Economic statistics and corporate earnings have been weakening.
The Primary Tide Major Trend turned Bearish, and that is a strong force. The Dow Theory confirmed a Primary Bear Market on 11/21/07 when both the Dow-Jones Industrial Average and the Dow-Jones Transportation Average closed below their respective closing price lows of August, 2007. On 11/7/07, the Transports closed below their 8/16/07 closing price low of 4,671.88. Then on 11/21/07, the Dow-Jones Industrial Average closed below its 8/16/07 closing price low of 12,845.78, thereby turning the Primary Tide Bearish.
To discover the next Resistance, traders probably will be watching how the market acts at the following levels for the Standard & Poor's 500 cash index (1,332.83):
Potential Resistance
1,576.09, high of 10/11/2007
1,552.76, high of 10/31/2007
1,523.57, high of 12/11/2007
1,498.85, high of 12/26/2007
1,403.45, low of 1/7/2008
1,396.02, high of 2/1/2008
1,388.34, high of 2/27/2008
To discover the next Support, traders probably will be watching how the market acts at the following levels for the S&P 500 cash index (1,332.83):
Potential Support
1,256.98, low of 3/17/2008
1,224.54, low of 7/18/2006
1,219.29, low of 6/14/2006
1,214.45, low of 11/4/2005
1,201.07, low of 11/2/2005
1,168.20, low of 10/13/2005
1,163.23, high of 3/5/2004
1,159.86, low of 5/17/2005
1,153.64, low of 5/16/2005
1,146.18, low of 5/13/2005
1,139.14, low of 4/29/2005
1,136.37, low of 4/20/2005
Daily Rankings of Major ETFs, Ranked from Strongest to Weakest of the Day:
5.74% Short 200% QQQ PS, QID
3.66% Short 200% MidCap 400 PS, MZZ
3.37% Short 200% Dow 30 PS, DXD
3.32% Short 200% S&P 500 PS, SDS
2.67% Short 100% QQQ, PSQ
2.12% Short 100% Dow 30, DOG
1.82% Short 100% S&P 500, SH
1.52% Short 100% MidCap 400, MYY
0.84% Value MidCap S&P 400, RFV
0.75% Bond, TIPS, TIP
0.67% Bond, 20+ Years Treasury, TLT
0.64% Japan Index, EWJ
0.43% Bond, 10 Year Treasury, IEF
0.34% Oil, Crude, U.S. Oil Fund, USO
0.21% Bond, Aggregate, AGG
0.17% Bond, 1-3 Year Treasury, SHY
0.10% Bond, Corp, LQD
0.05% Japan LargeCap Blend TOPIX 150, ITF
-0.02% Utilities H, UTH
-0.03% Utilities SPDR, XLU
-0.07% Utilities VIPERs, VPU
-0.12% Taiwan Index, EWT
-0.15% Utilities, PUI
-0.15% Utilities DJ, IDU
-0.15% Singapore Index, EWS
-0.18% Pacific VIPERs, VPL
-0.31% Insurance, PIC
-0.36% Real Estate US DJ, IYR
-0.39% Commodity Tracking, DBC
-0.51% Gold Shares S.T., GLD
-0.64% Consumer Staples SPDR, XLP
-0.67% Austria Index, EWO
-0.82% South Africa Index, EZA
-0.85% Consumer Staples VIPERs, VDC
-0.87% Global Titans, DGT
-0.88% Asia 50 BLDRS, ADRA
-0.89% Switzerland Index, EWL
-0.93% Malaysia Index, EWM
-0.95% Consumer Non-Cyclical, IYK
-0.97% Transportation Av DJ, IYT
-1.00% South Korea Index, EWY
-1.05% Biotech SPDR, XBI
-1.21% Dividend International, PID
-1.21% Food & Beverage, PBJ
-1.22% Pacific ex-Japan, EPP
-1.22% Basic Materials DJ US, IYM
-1.23% REIT VIPERs, VNQ
-1.23% Realty Cohen & Steers, ICF
-1.26% Value MidCap Dynamic PS, PWP
-1.27% Energy VIPERs, VDE
-1.27% Belgium Index, EWK
-1.28% Financials Global LargeCap Value, IXG
-1.28% Value LargeCap iS M, JKF
-1.29% Materials SPDR, XLB
-1.29% Pharmaceutical H, PPH
-1.31% Health Care SPDR, XLV
-1.31% Silver Trust iS, SLV
-1.32% Dividend DJ Select, DVY
-1.34% EAFE Index, EFA
-1.35% Materials VIPERs, VAW
-1.35% Telecom DJ US, IYZ
-1.35% Value MidCap iS M, JKI
-1.35% Europe 100 BLDRS, ADRU
-1.38% Growth EAFE MSCI, EFG
-1.40% Energy SPDR, XLE
-1.41% IPOs, First Tr IPOX-100, FPX
-1.41% Value MidCap Russell, IWS
-1.41% Hong Kong Index, EWH
-1.41% Developed 100 BLDRS, ADRD
-1.44% Bank Regional H, RKH
-1.44% Dividend Leaders, FDL
-1.44% Value EAFE MSCI, EFV
-1.45% Value MidCap S&P 400 B, IJJ
-1.48% EMU Europe Index, EZU
-1.48% Energy DJ, IYE
-1.49% Healthcare DJ, IYH
-1.53% China LargeCap Growth G D H USX PS, PGJ
-1.55% Value Small Cap DJ, DSV
-1.57% LargeCap Blend Socially Responsible iS, KLD
-1.58% MidCap Blend Core iS M, JKG
-1.58% Natural Resource iS GS, IGE
-1.59% Latin Am 40, ILF
-1.61% MidCap Russell, IWR
-1.62% Oil Services H, OIH
-1.63% Health Care VIPERs, VHT
-1.63% Europe 350 S&P Index, IEV
-1.63% Emerging Markets, EEM
-1.63% Australia Index, EWA
-1.64% Italy Index, EWI
-1.67% Financial DJ US, IYF
-1.67% LargeCap Blend Dynamic PS, PWC
-1.68% REIT Wilshire, RWR
-1.69% Value S&P 500, RPV
-1.69% Mexico Index, EWW
-1.69% Brazil Index, EWZ
-1.69% Retail H, RTH
-1.69% LargeCap Blend S&P=Weight R, RSP
-1.70% Energy Exploration & Prod, PXE
-1.70% LargeCap Blend NYSE Composite iS, NYC
-1.71% MidCap VIPERs, VO
-1.72% Emerging 50 BLDRS, ADRE
-1.73% Energy Global, IXC
-1.74% Dividend SPDR, SDY
-1.74% Consumer Cyclical DJ, IYC
-1.75% Value 40 Large Low P/E FT DB, FDV
-1.76% Netherlands Index, EWN
-1.76% MidCap S&P 400 SPDRs, MDY
-1.77% Growth S&P 500/BARRA, IVW
-1.77% Value Large Cap DJ, ELV
-1.77% Growth Large Cap, ELG
-1.77% Leisure & Entertainment, PEJ
-1.78% Value LargeCap Dynamic PS, PWV
-1.78% Homebuilders SPDR, XHB
-1.79% Dividend Appreciation Vipers, VIG
-1.80% MidCap S&P 400 iS, IJH
-1.80% Growth MidCap S&P 400, RFG
-1.80% European VIPERs, VGK
-1.80% Internet Infrastructure H, IIH
-1.81% Financials VIPERs, VFH
-1.81% Value 1000 Russell, IWD
-1.81% Growth S&P 500, RPG
-1.82% Euro STOXX 50, FEZ
-1.84% Germany Index, EWG
-1.84% Emerging VIPERs, VWO
-1.84% Consumer Discretionary SPDR, XLY
-1.86% Value LargeCap Fundamental RAFI 1000, PRF
-1.86% LargeCap 1000 R, IWB
-1.86% Wilshire 5000 ST TM, TMW
-1.87% Dividend Achievers PS, PFM
-1.88% Aerospace & Defense, PPA
-1.89% Growth MidCap 400 B, IJK
-1.89% Blend Total Market VIPERs, VTI
-1.89% China 25 iS, FXI
-1.90% LargeCap Blend Total Market DJ, IYY
-1.91% Oil & Gas, PXJ
-1.91% Financial SPDR, XLF
-1.91% Growth VIPERs, VUG
-1.92% France Index, EWQ
-1.93% Biotechnology, IBB
-1.93% Dividend Growth PS, PHJ
-1.93% Financial Services DJ, IYG
-1.94% S&P 500 iS LargeCap Blend, IVV
-1.94% Lg Cap Growth PSD, PWB
-1.94% S&P 500 SPDRs LargeCap Blend, SPY
-1.94% Growth MidCap Russell, IWP
-1.94% LargeCap Blend Russell 3000, IWV
-1.94% Capital Markets KWB ST, KCE
-1.95% LargeCap Blend S&P 1500 iS, ISI
-1.96% LargeCap VIPERs, VV
-1.96% Consumer D. VIPERs, VCR
-1.97% Telecom Services VIPERs, VOX
-2.00% LargeCap Blend S&P 100, OEF
-2.01% Spain Index, EWP
-2.01% Growth LargeCap iS M, JKE
-2.01% Growth LargeCap Russell 3000, IWZ
-2.01% Healthcare Global, IXJ
-2.02% Value LargeCap Russell 3000, IWW
-2.02% Pharmaceuticals, PJP
-2.03% Value LargeCap Euro STOXX 50 DJ, FEU
-2.04% WilderHill Clean Energy PS, PBW
-2.04% Telecom H, TTH
-2.06% Extended Mkt VIPERs, VXF
-2.06% Value VIPERs, VTV
-2.07% Global 100, IOO
-2.07% DIAMONDS (DJIA), DIA
-2.07% Value SmallCap Russell 2000, IWN
-2.10% Canada Index, EWC
-2.12% Value S&P 500 B, IVE
-2.13% Growth Mid Cap Dynamic PS, PWJ
-2.13% Value SmallCap iS M, JKL
-2.14% Value LargeCap NYSE 100 iS, NY
-2.15% Internet H, HHH
-2.15% Value SmallCap VIPERS, VBR
-2.17% Sweden Index, EWD
-2.17% MidCap Growth iS M, JKH
-2.20% Dividend High Yield Equity PS, PEY
-2.26% SmallCap S&P 600, IJR
-2.27% Networking, PXQ
-2.27% Small Cap VIPERs, VB
-2.28% Growth 1000 Russell, IWF
-2.30% Biotech H, BBH
-2.31% Telecommunications Global, IXP
-2.32% United Kingdom Index, EWU
-2.33% Telecommunications & Wireless, PTE
-2.33% Growth BARRA Small Cap 600, IJT
-2.34% Broadband H, BDH
-2.37% SmallCap Core iS M, JKJ
-2.38% LargeCap Blend Core iS M, JKD
-2.39% Value SmallCap Dynamic PS, PWY
-2.44% LargeCap Rydex Rus Top 50, XLG
-2.45% Biotech & Genome, PBE
-2.45% SmallCap Russell 2000, IWM
-2.49% Value Line Timeliness MidCap Gr, PIV
-2.51% Growth SmallCap VIPERs, VBK
-2.53% Internet Architecture H, IAH
-2.55% Metals & Mining SPDR, XME
-2.56% Building & Construction, PKB
-2.57% Technology Global, IXN
-2.61% Growth LargeCap NASDAQ Fidelity, ONEQ
-2.62% Info Tech VIPERs, VGT
-2.63% Technology DJ US, IYW
-2.66% Growth SmallCap Dynamic PS, PWT
-2.66% Hardware & Electronics, PHW
-2.67% Technology SPDR, XLK
-2.70% OTC Dynamic PS, PWO
-2.71% Micro Cap Zachs, PZI
-2.73% Networking, IGN
-2.74% Value SmallCap S&P 600 B, IJS
-2.77% Software, IGV
-2.77% Growth LargeCap NASDAQ 100, QQQQ
-2.78% Internet B2B H, BHH
-2.79% Microcap Russell, IWC
-2.80% Technology GS, IGM
-2.82% Growth SmallCap R 2000, IWO
-2.82% Growth Small Cap DJ, DSG
-2.84% Retail, PMR
-2.86% SmallCap PS Zacks, PZJ
-2.88% Water Resources, PHO
-2.93% Technology MS sT, MTK
-2.93% Software, PSJ
-2.97% Growth SmallCap iS M, JKK
-2.98% Software H, SWH
-3.00% Nanotech Lux, PXN
-3.08% Semiconductor H, SMH
-3.10% Value SmallCap S&P 600, RZV
-3.38% Ultra MidCap400 Double, MVV
-3.45% Semiconductor SPDR, XSD
-3.66% Semiconductor iS GS, IGW
-3.88% Industrial LargeCap Blend DJ US, IYJ
-3.89% Ultra S&P500 Double, SSO
-3.93% Industrial SPDR, XLI
-3.95% Semiconductors, PSI
-4.04% Ultra Dow30 Double, DDM
-4.27% Industrials VIPERs, VIS
-5.37% Ultra QQQ Double, QLD
Best
Wishes,
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Synergistic Trading Newsletter |
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www.TradingEducation.com |
April 14, 2008 |
Weekly Currency News Trading
Weekly Currency Wrap-up
Week Ending April 11, 2008
by Darrell Jobman, Editor-in-Chief
Conditions within the global economy and financial markets continued to dominate market sentiment during the week. The fragile nature of confidence was illustrated by sharp currency moves with spikes down in carry-related currencies.
The US currency overall remained on the defensive following the weak payroll report at the end of last week.
The minutes from March’s FOMC meeting recorded that some members were concerned over the risks of a severe slowdown in the economy. In contrast, another camp was concerned over the inflation outlook, illustrating the difficult task faced by the Fed over the next few meetings.
Markets were split on expectations for the Federal Reserve rate decision with futures markets indicating similar probabilities of a 0.25% or 0.50% cut at the late-April policy meeting.
The US trade deficit rose to US$62.3bn in February from a revised US$59.0bn the previous month. There was a surprisingly strong increase in imports while there was a solid rise in exports for the month.
Initial jobless claims fell to 357,000 in the latest week from a revised 410,000 the previous month which eased immediate fears over the labour market to some extent, although the housing-sector data remained generally weak.
At the latest council meeting the ECB left interest rates un changed at 4.00%. In the press conference following the rate decision, ECB President Trichet took a similar line as in recent meetings with further warnings over the need to control inflation.
He also warned that the financial-market difficulties would last longer than expected which triggered some speculation that the bank was preparing the markets for a shift in policy later in 2008 if conditions failed to improve.
The Euro retained a generally strong tone over the week, although it was subjected to bouts of profit taking against all major currencies. The Euro was boosted by reports of sovereign buying during the week, especially from Asia. The dollar was unable to strengthen through the 1.5610 level against the Euro and weakened to fresh all-time lows around 1.5910 before a renewed correction in choppy trading.
The Japanese currency moves were again influenced strongly by degrees of risk aversion and the yen strengthened sharply as global markets were subjected to renewed selling pressure.
After two rejections, agreement was reached on the nomination of Shirakawa as Bank of Japan governor, although Watanabe’s nomination as Deputy Governor was rejected
At the latest council meeting, interest rates were left on hold at 0.50% while the Bank of Japan downgraded its assessment of economic conditions within the economy.
The dollar was unable to push above resistance in the 102.80 region against the yen and weakened rapidly to lows near 100 on Thursday before an equally sharp recovery back to 101.80. Volatility continued on Friday with the dollar retreating to 101.00.
The Swiss franc found support near the 1.02 level against the dollar and strengthened sharply back to around 0.99 before correcting weaker again. The franc found support close to 1.5950 against the Euro as volatile trading persisted.
The Bank of England cut interest rates by 0.25% to 5.00% following the latest monetary Policy Committee meeting. The bank stated that it expects inflation to fall later in 2008, especially as some spare capacity could emerge.
The bank was also concerned over the tightening of credit standards. The breakdown of the vote will not be known until the minutes are released in two weeks time.
The housing data remained weak with the Halifax Bank reporting that house prices fell by 2.5% in March which was the biggest monthly decline for 12 years. There was also further evidence of tightening conditions within the mortgage market while consumer confidence also continued to weaken.
The visible trade surplus was reported at GBP7.5bn for February from a revised GBP7.9bn the previous month as imports were significantly lower. There was some optimism over investment flows after RWE’s approach for British Energy.
Sterling has remained on the defensive over the past week. The UK currency weakened to record lows against the Euro around 0.8035 and struggled to make any headway against the dollar.
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