Sean asked:


The banks have been betting big on stocks, bonds, commodities and other assets. Trade gains will only last so long.

PeterSchiffChannel asked:

more at financial doom and gloom at : economycollapse.blogspot.com

As traders all we really need to know is when a market is going to stop moving in one direction then turn around and head in the other. The rest is noise. I try to concentrate most of my energy on identifying these times. The day trading information presented here is applicable to longer term position trading. Read on to learn what a market requires to make a turn.

Observations From Trading Notes:

“Previous day’s close in upper range.”

When the e-mini futures market is stabilizing and trying to find its legs, a close in the upper range is positive. (daily chart) It must be viewed in context. It can be bullish if it’s coming off a panic bottom. But it can be bearish if a new down leg has just started. Bear markets have a tendency to get slammed in the day and rally back to the midrange at the close. They then gap down and break into new lows the next day. Know the difference and always look at indications in perspective and context. Patterns mean different things depending on where the e-mini market is within its bottom, advance, top or decline cycle.

Observation:

“A clean-out has occurred in the last 2-3 days on the five minute chart. It broke out of its down channel. This includes a double snuff of momentum. After snuff, momentum gets in sync – all on the last day.”

There’s a few indications wrapped into one pattern. A clean-out is always good, especially if the e-mini futures break out of the normal channel range that you use. Channels are channels. Use whatever contains price MOST of the time and breaks out when a panic occurs. A “snuff” is my unique term for when a normal e-mini futures cycle fails to bottom, and breaks down to go twice the distance in time.

For example, lets say the S&P 500 or e-mini futures contract has been running in 30 minute advances and 30-minute declines over the last few days. Timing will never be perfect, but on average, you can see what the e-mini wants to do in normal advances or declines. The traders using optimized momentum often get ****** into these repeating and smooth reversal patterns and suddenly a large, unexpected move takes place.

Instead of the e-mini market declining for its normal 30 minutes and then rallying, it will decline 30 minutes, pause for 10 minutes and then ***** wide open to the downside in a panic liquidation. The cycle will often become a 60-minute total decline to the bottom and break out of its price channel. This is a so-called “reverse energy” move. It catches off-guard the traders who got use to the repetitive cycle.

To look for snuffs all the time is a mistake. They come only about 10% of the time in normal e-mini markets and maybe 40% of the time in strong trending markets. The key is that they pause and then break the previous low made 10 minutes ago or whenever time frame you are using. They work on all time frames from one minute to monthly. Snuffs are the commodity market’s way of hogging time to accommodate the cycle of next larger degree.

You will find that when a daily e-mini move of say, three days down is in progress, the smaller hourly and 15 minute cycles become distorted and stretched out on the downside. I realize everyone has their own pet theory for this, but whatever one you use, be aware the move is fast and sudden, catching momentum-type oscillator traders off guard. You can make a whole day’s pay in a short time if you recognize what is happening.

Be aware that the e-mini futures market can disappoint many traders by breaking through an important support or resistance. It becomes a doubly important indication if a “snuff” gets involved. It’s something like a chess game, but perhaps more like a detective doing a forensics analysis. You look for many different scenarios that could play out from the evidence presented.

Never get stuck with just plan A; have a plan B also. There’s many times when I’ve worked out a scenario based on current indications only to find that it was a fantasy in my mind. I saw things that I wanted to see. My point is that when the e-mini futures market does the opposite of what you expect, be ready for it. Be quick to change your interpretation to plan B.

These plan B trades sometimes become big winners because they catch other e-mini futures traders who thought like me but were already positioned. I like to think of myself as a sophisticated trader but believe the more “sophisticated” you are, the bigger mistakes you are capable of making due to ego. Supposedly, the most sophisticated traders out there are controlling the largest positions, so things can get out of hand quickly and panics occur.

So when you see a big set up take place with huge buying and that later fails, know there are probably some big guns involved that may end up gagging on thousands of contracts. These are the types of panics you want to be riding on the correct side.

Part Five of Five Parts – Next!

There is substantial risk of loss trading futures and options and may not be suitable for all types of investors. Only risk capital should be used.

By: Thomas Cathey

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bgs_rao asked:


This question can perhaps be better answered by those who hve pecialised in trade and business. Others r also welcome tojoin this.

Nick B asked:


an anyone tell me how companies trade energy? is it like stock? or do they actually move the commodity when they trade it? specifics please. Thanks.

daytradetowin asked:

the Power of Price Action. … “online day trading” “live trading” “live day trading” “online daytrading” profits “at the open” indicators “john paul” daytrade “day trade” “day trading online” “day trading live” “stock trading” commodities commodity “commodity trading” mini “Day trading S&P” “S&P e-mini” “S&P e mini” investing “ninja trader” tradestation ninjatrader “free e book” “candlestick charts” “price action” money day trader “making money” “how to day trade” “day trading the emini …

the real shaz asked:


No, I wasn’t kidding. I went to the market yesterday and found atleast one brand of milk that was $3 a gallon vs. $6, New York steaks for $3.47/lb vs. $8+, strawberries $1/lb vs. $3/lb, bananas $.50/lb. and stock was much fresher than it was 2 weeks ago.
I live in Southern California.

John Derit asked:


Does anyone have any literature on this.

Have you ever heard investors mention speculating in futures of the commodity market and wondered what it they are talking about? While most of us are familiar with investing in stocks, commodities can be an interesting way to have your money make money for you.

But first, you might ask what is a commodity? commodities are goods we are each one portion is the same as the other. For examplee, oil is a commodity because one barrel of oil is the same as the next. Wheat is also a commodity each bushel of wheat is identical to every other bushel of wheat and anyone purchasing them could care less whether they get bushel number one or bushel number two. Gold is another example of a commodity. 1 ounce of gold is the same as the next.

There are some differences in some commodities to external forces such as shipping costs or differences in composition. For example, not all oil sells for the same cost because they may come from different sources were shipping is a consideration. Also they may trade on different markets where the pricing is different.

There are two ways that commodities are traded, in spot markets, or as futures.

Spot markets, refer to trades that take place literally on the spot. The commodity is traded right then and there, usually for cash but also could be for some other product or good. For example, if you want to buy an ounce of silver, you can go right down to the jeweler give him some cash and it will give you so. This is spot trading.

Of course, spot trading can be done in larger volume as well. Some traders exchange millions of ounces of silver or thousands of barrels of oil and then sometime later the actual goods are delivered.

When traders talk about futures or options it is not the actual good that is traded for rather a contract to buy or sell that particular commodity for a particular price a certain date in the future. This is how most commodities trading is done. This type of trading can have huge profits and also huge losses as it involves speculating on the future which can be full of risk and uncertainty.

this type of trading has been around in its present form since the late 18th century . Around this time farming became more modernized which allowed commodity trading to be profitable. Although this is an age-old way of making money, the basics remain the same today as they were in the late 1700‘s.

For example, wheat takes many months to grow. So at the beginning of the planning, the market price when the wheat is ready and speculated on. So if a farmer plants meet in May which will be delivered in September, the price at that time may be four dollars a bushel. If in June the price begins to fall, and the farmer feels the price will continue following, he may offer a contract on this week for the current price (lower than $4.00). Now if someone thinks that the price will go up over four dollars, then this contract will look like a pretty good deal and they may take them up on it.

Since no one knows for sure what that price will be, an actual prices based on such unpredictable things such as weather, this whole process Is called speculation. so now when September rolls around, the farmer delivers his wheat for the agreed on price. Now if the price has actually gone up to over four dollars and the speculator has made a profit. But, if in fact, it is fallen to wander the agreed-upon price he has lost money.

So there you have it, the basics of commodity trading.

By: Lee Dobbins

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