Early Morning Outlook
Quiet before the Storm
LLOYD: “I’ll bet you 20 bucks I can get you gambling before the end of the day!?”
HARRY: “No way.”
LLOYD: “I’ll give you 3 to 1 odds?”
HARRY: “Nope.”
LLOYD: “5 to 1?”
HARRY: “Nope.”
LLOYD: “10 to 1?”
HARRY: “You’re on.”
– Dumb and Dumber
As discussed, no surprise with seeing the euro dip bought on Draghi. Again, as we have been going on in our latest weekly outlook video and repeating this all week, the short-term focus is on potential event risk this weekend with developments in North Korea and with Hurricane Irma.
What makes this weekend particularly interesting, is not that we have any certainty that something market moving will happen but that it is anyone’s guess as to how we open on Sunday if something does happen. This means that systems/models are going to have trouble dealing with the kind of aggressive gaps that might trigger moves outside any kind of conventional/forecastable sigma move.
The point is not to over-dramatize the situation but to make sure readers understand the implications and possible consequences of running aggressive positions over the weekend. We will discuss this in detail, along with positioning in today’s webinar session.
Good luck to all and remember that you can use the Tags or Search options on the right hand side of the blog to look up the latest charts you may be interested in reviewing.
Into Labor Day Weekend
“I used to try to will things to happen. My attitude was that I figured it out, therefore it can’t be wrong. What is the ultimate rationalization of an investor in a losing position? “I’ll get out when I’m even.” I became a winner when I was able to say, “To hell with my ego, making money is more important.” – Marty Schwartz
Nothing much has changed as we wait for today’s data points. As we discussed in our weekly outlook video, and yesterday’s post, we’re going to have to see how we trade into the end of the week, without forgetting that we’re going into a 3 day weekend.
We continue to contend the health of this market where we continue to see low liquidity ramps and out of sync intraday moves. However, as we like to say; it is what it is. We have to look for opportunities in the markets that we get, not the market that we would like to get.
Please note that the next weekly outlook video will be posted on Monday and depending on how we close, we’ll also review upside targets for DJI, SPX and NDX.
Wishing everyone a great break!
All About Levels
“The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.” – William Arthur Ward
We continue to focus on the charts and levels as we digest the tragic consequences of Hurricane Harvey and the escalation of the North Korea situation. Naturally, both situations are rapidly developing and will have key economic and geopolitical implications (weaker growth / possible fed on hold and overall risk-off portfolio positioning). However, experience tells us that what these events can do is increase the ‘velocity’ of the moves but that overall, since we are trying to keep this as simple as possible, everything we need to know is already in the charts.
Moves were already in play before Harvey and North Korea, so there is absolutely no change to what we discussed in our weekly outlook video. We don’t have a crystal ball but clearly, it’s hard to see who would want to be aggressively adding risk-on exposure, especially going into the weekend. As we like to say, sometimes the best trade on the board is the trade you are already holding. We continue to focus on long yen, long gold and short equities exposure.
It’s still a little bit early but we would suggest you start to have a look at what those monthly candles are looking like across the board but especially on the equity indices.
Note for active 50Scouts members: make sure you keep an eye on your inbox for a free pass to Friday’s daily webinar session (make sure to check your spam folder too). Furthermore, another great step in the right direction was achieve by the movement this week with a first Darwin reaching 1M Euro AUM.
As always there is no substitute for real-time/live action; if you are interested in attending a daily morning call into NY with a more detailed live discussion on all the charts and ideas we highlight/review in the outlook video and here on the blog, you should check out our Daily Webinar Group.
Early Morning Outlook | 22/08/2017
“The key is consistency and discipline. Almost anybody can make up a list of rules that are 80% as good as what we taught. What they can’t do is give (people) the confidence to stick to those rules even when things are going bad.” – Richard Dennis, on Turtle Trading
Don’t forget that updated charts are posted throughout the day on Twitter and please don’t hesitate to use the TAGS on the blog homepage to find recent posts.
As always, there is no substitute for real-time/live action; if you are interested in attending a daily video morning call into N.Y. with a more detailed live discussion on all the charts and ideas we highlight/review in the weekly outlook and here on the blog, you should check out our Daily Webinar Group.
Where We Stand & Out of Office
Markets love to get interesting when you would least want them to do so… and in classic fashion, things are heating up right ahead of our summer break. We will be out of the office this coming week and posts will resume with a new Outlook Video next Sunday (August 20th) before markets open for the week.
We are starting to see a lot of interesting action across the board and no doubt the talking heads are going to start to focus on what we have been discussing for months now: Dax breakdown, Nasdaq top, weak internals, deteriorating price action in transports/retail, strong yen, continued rotation on euro, impact on commodity currencies and so on…
The weekly close is going to be particularly important and we would expect that the market will not be in a hurry to put on more risk but rather cut exposure as we go into the weekend. As usual for the most part of this year, we have been positioning long bonds and long gold into the weekend (apart from metals swing longs that are still in play).
If you are looking for more details, please look back at the recent weekly outlook as we discuss a lot of these things in detail. Again, don’t forget that updated charts are posted throughout the day on Twitter (there is a good amount of interesting setups that have been posted this week) and please don’t hesitate to use the TAGS on the blog homepage to find recent posts.
In terms of those looking for the end of the world following recent price action, we would like to make two comments: (i) in terms of context, the Dow didn’t even manage to close down a full percentage point yesterday, you haven’t seen any real selling yet (ii) don’t worry about it, if the world is ending, there is nothing you can do about it and your brokerage account is really not a concern.
If you sign up for any of the Premium content, please note that there might be a slight delay in getting your account setup but everything will be up and running by the 20th at the very latest.
We’ll be keeping an eye on the action from a distance and don’t forget that sometimes, the best trades on the board could be the trades that you are already holding 😉
All the best to everyone and see you soon!
Early Morning Outlook | 09/08/2017
“The arrogance of success is to think that what you did yesterday will be sufficient for tomorrow.” – William Pollard
Don’t forget that updated charts are posted throughout the day on Twitter and please don’t hesitate to use the TAGS on the blog homepage to find recent posts.
As always, there is no substitute for real-time/live action; if you are interested in attending a daily video morning call into N.Y. with a more detailed live discussion on all the charts and ideas we highlight/review in the weekly outlook and here on the blog, you should check out our Daily Webinar Group.
Early Morning Outlook | 08/08/2017
All About Follow-Through
“You have to have confidence in your ability, and then be tough enough to follow through.” – Rosalynn Carter